Are the Markets Officially Bearish? | Technically Speaking: Trading Stocks & Options

[Music] [Music] good afternoon everyone welcome to our webcast technically speaking trading stocks and options i'm connie hill we got to combine some of my favorite things in this session that is looking at the charts seeing what the technicals are showing us or trying to indicate to us as well as placing trades ball stock trades and option trades i'm happy that you would join me here today for those of you that might be a little bit newer this is an intermediate level class which means i'm going to make some basic assumptions that you know things about some strategies and trading stocks and some technicals on the chart although i'm hoping to enhance that as we take a look at things here today we've got some friendlies out there that want to welcome you back appreciate you being here week after week we have joining us in the chat my good friend barb armstrong in fact i got to see barb yesterday which was so nice and and the rest of our coaches we had a little get together in any case barbara has such a wealth of knowledge and is so helpful as you have questions chat him in she'll help me answer those questions if you're listening to this on the recorded version you too can get your questions answered just go ahead put them in the comments section and i'll go and review those throughout the week so that you get your questions answered quickly here as well now i'm on twitter my handle is at chill underscore tda barb's on on twitter as well she does a lot of tweeting she is b armstrong underscoring tda and we'll post educational content things that maybe we're seeing out in the market that we think you might find useful that we found to be interesting we're going to pass some of those little tidbits onto you and so it's really a nice thing if you're able to follow us on twitter so take advantage of that well what we talked about today is intended for educational and informational purposes only it's not intended to be a recommendation of any security strategy or account type options are not suitable for all investors as the special risks inherent option trading may expose investors to potentially rapid and substantial losses probability analysis results shows for example probability of an option expiring in the money is theoretical in nature it's not guaranteed and does not reflect any degree of certainty of an event occurring while this webcast discusses technical analysis other approaches including fundamental analysis may serve very different views past performance of any security strategy does not guarantee future results or success please remember investing involves risk including the risk of loss please no soliciting no photography and so forth well you guys let's get going here i've got a full agenda for us today and man i am hoping that we can get to everything i mentioned it that this is an intermediate level class and so i may go a little bit quickly for some of you if i do just know you're going to have the recording to go back to following any technical issues that should get posted hopefully this afternoon but take advantage of that now i want to show you you've heard us talking about getting an appointment with a think or swim platform specialist barb and i aren't available to hang out with you unfortunately and so we want you to be able to get more versed on thinkorswim some of you have mentioned in our sessions that you have taken advantage of it and it's been a good experience for you the one i remember from yesterday was crazy foxy spoke up and said yeah i did that it was great so i'm going to show you how to actually do that we're going to take a quick look at what the markets are doing i think you have a good flavor for that already i want to show you a scan i want to show you from that scan maybe a couple of results of some potential trading off paper trading opportunities that we could use and we have a couple of things we need to follow up from in our accounts so let's let's march on here now in your chat area i've already posted the link for this now barb will probably help me out by posting it again throughout the session but what you can do is click on the link or if you want to just copy it you paste it off to the side what it'll do is it'll bring you to this page here this is what it'll look like you just say yeah i'm interested in this i agree and then it says i'd like to set up a demo of the of the thinkorswim platform this is your opportunity to ask questions about setting it up they may ask you if you're not really sure what you want they may ask you what kind of trading or investing you do because then that can assist them in helping maybe train your thoughts to go a particular way so 30 to 45 minutes hit continue oh what did i do wrong i think i had to click on it first okay then continue and then it's going to bring up the current calendar it's going to be showing in your own time zone i'm in the mountain time zone it'll pull up your time zone pick a date pick a time whatever is convenient to you i'm going to go to this last date out here two weeks in advance there are 43 appointments available starting at 6 a.m which is good for you on the east coast that's really about 8 a.m and then 4 30 p.m

all right that's about 6 30 p.m on the east coast okay so lots of opportunities for you to do it take advantage of it you will i can't promise you won't regret it but i think you will really get some benefit out of it we'll we'll leave it at that point all right let's look at our next agenda item which is see what's going on in the markets you know it was really interesting yesterday chairman powell talked and as he was talking what did the market do it rallied we're looking at the vix here what did the vics do man it really dropped down in fact it got down it closed around 25 which is a little bit lower than where it had been the previous days but what's happened today it's kind of like all the euphoria people had while uh chairman powell was talking has kind of worn off and the reality of what he was saying was you know we're in a little bit of a difficult circumstance it's uh not all roses although the fed thinks they can handle it now there are some people that don't think they can and that's okay but that's kind of what his message was and so i think maybe some of that is clicking into investors today if i change this over that's the the vix so we know the vix is going up today what does that mean that's happening with the markets yeah they're definitely down um some of them i think as a combination of the market as a whole this is probably the worst down day that we have seen in some time okay i want to say all of this year but i'm not positive about that but yeah the indexers are down major three percent move on an index is huge okay basically it's wiped out for the most part yesterday's rally and what's it doing it's coming back down here to kind of a support level you know my initial line i had drawn here at 41.57 and then we got a little bit of price action here in the last week or two where it went a little bit lower so maybe this area 4112 maybe it's a little bit lower on that range of the support area it was interesting yesterday because we had a hammer candle which many times will indicate if it's a support may indicate a reversal doesn't mean the whole trend is going to change but at least the price action for a particular day right it might indicate and so we had a couple of nice two day run here but yeah we can see the white it's wiped out the index has wiped out most of its gains that it had now we're off our nose today all right so things are not as bearish looking they're not as grisly looking as they were were a little bit earlier but as i pull up a couple of these charts i want you to know the s and p how much it's down today or not today since the peak do you guys know how far it down it is from its peak and a quick way to calculate that i'll show you using our charts i've got the trend line selected pick whatever day is up here that's the highest and and maybe i'll just zoom in a little bit here make it a little bit more precise and i'm going to go from our current price of the stock so about where we are on this candle right now let me click trendline again and there we go you follow that box and i'm going to take this up to where my eyeball is seen where that high price was and so it's showing we're down about 13 now it might be a little bit more it might be a little bit less but that's the range we're looking for if you've been wondering are we in a bear market now how do you measure that you measure it by the top point to where the low point is right now where the current price of the market is right now when it's down 20 or more now you're thinking this has been painful this has been horrible and we're just showing a thirteen percent reading well it is painful during that period of time five percent we expect ten percent you know five to ten percent will say that's normal okay just expect that in whatever happens in the market but some of the indexes are actually built lower than that okay so there's the spx i'm going to show you the dow jones as well it is not as painful either from its peak uh this was actually back in january 5th that's where we are now it's only down about i'm going to say 10.6 percent might be a little bit less than that from when i measured it earlier hopefully you got the idea of that click on that trendline it will do that calculation for you make sure you have enough room above it so that you can see what that value is but now i want you to look at something that maybe is a bigger drag on the overall markets uh tim i want to repeat your comment here tim when we're talking about what's going on with the market he said that cannot fix the supply chain energy or political issues it can't it's out of its control completely and i think some of the reality of that kind of coming back to that uh is kind of what investors are looking at right now okay get rid of the dollar sign here and the x let's look at the nasdaq from its peak point so we see if you've got those little bubbles turned on it'll show you where that is so here's our peak day this is actually back in november the 22nd so pretty close to thanksgiving and i'm gonna come from that peak point here and i'm gonna start drawing now it doesn't really matter if you start at the top or the bottom but if it's your point you're starting from is a little too high you might not see that entire box so this is showing the dow down about 22 23 right not the doubt the nasdaq down about 20 to 23 percent so is it in bear market territory yeah it is now i recognize all of the indexes are pulling back to those main support levels they had including the nasdaq but that's where it stands would officially say okay as of today we're back in bearish territory after yesterday's rally i think it nudged us just a little bit above being down 20 so maybe poked its head out of there for just a moment yeah uh only 30 of the 500 stocks on the s p 500 currently are up on the s p today i think that's a note from barb yeah definitely uh interesting to know okay quick look at the russell 2000 our small cap stocks probably not going to be too big a surprise just visually you can see on the screen uh their peak was up to november 5th it's really struggled it's really struggled to gain some momentum i have it breaking down past kind of passed where that kind of intermediate support area was around 1927 went a little bit lower than that uh and uh was getting close to being that low again here today so it's a little bit lower the russell is down about 24 so the russell and the nasdaq are the ones that are in bear market territory all right i have atr on this screen here today we're going to use this for some examples we're going to look at some of you may wonder what is atr means average true range which is what is the range that the stock has been trading or the index in the case we're looking at here this one's over the last 14 days that's the default that's what welds wilder intended it to be if you needed a short or wanted to go a shorter time frame uh his uh suggestion was to do it in seven period multiples so if you wanted it shorter you could maybe do it at a seven day period rather than 14 typically i'll just i'll just stick with the 14. and it gives us an idea well has it been ranging from big moves to small moves or what's been going on so as we look at say the russell we'll use it as an example when the atr went high here this was about one of its highest trading ranges over the last 14 days and it peaked here about looks like that value's about 58.

that means from high point to low point over the last 14 days the average was about 58 points now today we're seeing a big movement in the wrestle right uh it's showing about a 75 point move so we're seeing that atr edge up here a little bit because we've had some real wide trading action over the last few days all right uh lori said what three percent ouch yeah three percent uh definitely now it's the naz the nasdaq at one point when i was looking at it earlier let's see where it is right now on the ndx yeah i think i saw it down okay now it's it down even further when i saw it it's down 4.66 this is a very heavy selling day in the market now sometimes when that occurs we may have a situation where maybe the market feels like or people feel like the market is overreacting we'll see here in the next few days if the market is overreacting because we're going to see whether it sticks with these support levels or if it continues to go down a little bit more now one of the things i wanted to okay uh 514 says i'm still in my puts from the days before so you're getting a wash okay since claiming claiming that territory again now the next thing on our agenda i put down i wanted to show you a scan now i have showed you this scan in the past it's been a few months since i've showed it to you but i'm going to show it to you again because it's so appropriate and can be so useful in the periods of time that we're in plus not all of you got to see it and maybe not all of you memorized it i don't know there could be some stars in our class we definitely have some superstars in our class maybe you memorize this or you're using it but let me show you due to the fact that we're looking pretty bearish on the market let's show you a bearish scam now i think i forgot to clear it out so let me come over here to scan and hit reset real quick before you memorize it i want to walk through it with you all right we're starting over here we're going to build a scan that basically is looking for weakness technically speaking and picking on those entities that have been weak versus picking on something say for example say an energy stock energy has been really strong oh it's having a couple of down days now we're not going to go looking for those types of stocks now when i told you it's going to be a bearish search and in a bearish shirt i like to have the price start at 40. why is that i want that stock to have room to fall yeah if it's already down at 20 sure it can fall some more but maybe a lot of it's already been priced right maybe it's already had a lot of the fall but i like there to be some to still have so we're going to say last price of this stock is going to be 40 bucks so here's our last all right next thing uh the percent change i want it to be down today so we'll use this percent change that it's sitting us here with and i'm going to put a range in here uh i don't want to be too far but i am looking for those that are making some moves so we're going to say down ten percent to down minus one and a half percent okay one and a half percent isn't a huge move ten percent is a pretty big move but it's nice to see what those are they're in there and then we're going to get rid of this middle piece here we're going to put some other parameters in here now these came these variables came from the stock filter we're going to go through a couple of other filters now we're going to put on the screen this is a technical technically speaking class we're going to use technicals here i'm going to select on the add filter we're going to pick study three times and my warning to you is this so listen listen because there's always comes up it was a question somebody's trying to follow me and they kind of forgot to listen to this part the uh study index does not work with your paper side okay this study filter that we just added here now i'm covering up here a little bit they only work in paper money okay so you have to create the scan run it in paper money bring your results on over okay so just wanted to make that super clear to everybody all right now we're going to choose some study filters here first thing we're going to do is volume we did have a volume up here but it only referenced today's volume so we're going to come down here to volume we're going to say average volume we're going to the default is a million shares over the last 50 days i'm going to shorten the time frame here we're going to go 30 days do you want to go shorter you go 10 days or 20 days whatever you might like if you want something uh that's responding uh maybe to higher volume in the last little bit uh we're going to also look for something that helps us with trend now trend really is the price of the stock changing for us right a trend of going higher high of going up is higher highs and higher lows the trend of going down is lower lows and lower highs so we're going to make the system go look for that for us so we're going to put in here price performance or a price change rather under the price performance and then we're going to go again price performance price change there we go and we're going to look for short-term trade changes and intermediate trend changes so first thing we're going to look for is that short term or well we'll look for the intermediate we're going to look for the stock to be 25 less default here's greater we're going to change it to less in a number of trading days now trading days i went back and and got this very specifically because it sometimes falls in a little bit of a range we're going to go with 62 bars sometimes in the past i've used 63 all the way up to 65 i might have used 66 before at times but we'll go ahead and we're going to use 62. uh let's see brampton says can you repeat what you said it only works on paper money or real time the scan itself only works in your real account okay so if you were to try to build this in your paper account you'll come up to this filter that says study and it's not going to work for you okay so i'd like you to know that up front not get frustrated trying to make it work so very good oh barb's answering that for uh us as well thank you as well as ap okay this is our intermediate trend we wanted to be on 25 which is kind of a chunk and i have played with this variable a lot sometimes i'll put it at fifteen percent okay maybe when we're at the beginning of a pullback and market hasn't adjusted so much well we've had some major adjustments so i'm gonna leave it at 25 i know we have plenty of results because i already ran it and then we're going to look for shorter term trend here we're going to just look for it the stock being down 5 it's going to be less than the last uh 21 days which is about a trading month right it's about a month's worth of trading uh one thing i didn't answer here was about the volume if you're somebody that's trading stocks and you're not into options yet you might adjust that to maybe 250 000 like you do when i teach in the stocks class i'm going to use something higher today because many times people that are trading to the bearish side they are simply working with option strategies shorting stock can be risky and so that's why anytime we're doing something on a bearish mode in this class i'm going to teach you with option strategies okay we're not going to short the stock all right that is the scan now i'm going to show you if you want to save it say you go oh this is connie's scan that she likes when the markets are on the bearish side and it's one of them okay it's not the perfect scan you might alter it somehow go ahead give it a good name don't call it connie scan unless you say connie's bearish early morning movers scan because that's what i call it okay when i'm looking for stocks that are moving at the beginning of the day and i want to already have a bearish trend so give it a good name i'm not going to name it again because i already have it and i'm going to change the results here to 200 i don't think we're going to get 200 but we're going to hit scan oh holy cow what did i do oh we lost our price up here let me go back we lost our 40 price that we shouldn't have that many okay we're going to run it again oh goodness that's not right let me see if i did something incorrect here so we've got not 400 okay how about just forty dollars okay really i like 40.

that's more like it 35 all right that's plenty of stocks to be able to work with what do we know about them they're downward trending they're down today they've been out on over the last month and over the last quarter okay they've got bearish uh written all over the charts let's take a look at what some of these are now i'm going to come over here to my charts i'm going to switch over here as i'm switching because i'm going to do something here with the the scratch pad i want to invite you to join our traders talks investor insights channels if you turn on your reminders that'll allow you to get notified when we're having sessions and different classes that sometimes you might miss if you aren't subscribed to it okay so it helps you kind of keep on track keep track of the classes that you want to join more frequently kind of give leaves you know it'll also alert you i'll tell you this as well it'll also alert you to things that maybe aren't in our regular schedule all right our regular schedule being you know when we teach classes 7 30 to uh whatever it is six eastern uh it'll show you some things brent morris has been working on and there are several of you who have indicated interest in the thinkorswim platform or rather the thinkorswim web functionality brent is doing some tutorials out there on the trader talks showing you how to use that think or swim on the internet i know some of you have an interest in that so uh whoa that was a wild ride sorry about that okay i'm gonna still i'm gonna collapse our scratch pad here i'm gonna come up here to our watch list and i have here the name of that scan i i told you i call mine the early morning movers bearish and that's my abbreviation for it i have two of them i like this one the best okay gives us more results more consistently and so we've got a boatload of stocks here now i have them in alphabetical order here you don't have to have them in alphabetical order i've also got them showing here how well they've done the last month the last three months the last six months those are think scripts i've chatted those out in the past i will chat them out to you again uh yeah lori says that's what i'm worried about that the stocks in the indexes might rebound tomorrow well just because we've seen it you know several days in a row yeah and sometimes if that when that's the case if you're not sure what to do either you don't have to play any tr or place any trades nobody's saying you have to do that you might decide to practice some trades in your paper money account that you don't feel confident enough to do in your own own account or maybe because some of these strategies are new and you really need to learn them well yeah and it allows you when you when you kind of say hey self i don't have to make a trade today it will allow you to be a little bit more objective and just kind of see okay during times of volatility because that's what we're seeing right the vix is up we're seeing some you're getting some whiplash here and the price action yeah you absolutely don't have to do anything and you can just practice and observe cash is a position okay cash is a position uh from here what i wanted to do is look at a couple of the charts of some of the stocks we're looking at now i'm going to start up here with amazon on amazon you guys know they announced their earnings at the price of the stock right now is at 23.40 it was up higher it was up what past i don't know i think it got up to 3 800 ish several months ago but it definitely has been having a correction this is my 30 period moving average we can see on its average two range look how much that popped on that huge drop yeah from its earnings announcement it's disappointment now amazon is sitting maybe it's a support area we'll have to see but it's kind of bottoming out here possibly but it doesn't seem to be having much of a bounce like some of the rest of the market is now today's range on that atr well the average atr is 136 136 points a day just on this stock alone today that range has been kind of in that neighborhood it's been almost at 155 dollars today so it's a pretty good size range that amazon moves in now i'm going to take you over to the trade tab we're going to do a couple of trades here that one's going to be a little bit more aggressive one's going to be a little bit more conservative okay knowing amazon's bearish it's a stock that you know twenty four hundred dollars stocks there may be some of you that go i'm working with a smaller account i'm not gonna buy a put or a call on a 2400 stock i don't even have the capital for one little contract because they're big size contracts that's when spreads can be so useful you can take advantage of the price action but in a totally different way so we're going to go to the trade tab here on amazon typically it has a lot of trading activity i've got the june options opened what we're going to do here is going to be a little bit more aggressive because implied volatility is just up right now that sometimes helps you favor some selling in your strategy and not just only being a buyer so that's the the lens we're going to look through that tm says yeah that etsy had a big drop so did shop uh during their earnings yeah a lot of retailers are getting kind of a big big little kick right uh we're gonna like i said something more aggressive we're actually gonna use this may time frame if you don't feel comfortable doing a practice trade with us here in the may timeframe you feel more comfortable going out to june go to june the weeklies in between don't have a lot of open interests okay so that's why i'm not picking one of the weeklies all right so here we're going to do a couple of different trades one is if you think maybe amazon's going to continue to move a lot that atr is pretty high uh it can be higher it also drop a little bit lower but in this case let's look at doing a put spread a long vertical long debit spread current price of the stock is 23.33 and so it's kind of straddling an in-between zone here the strike prices are in twenty dollar increments okay uh so we're just going to go here with the buy the 2340 and sell the 23.20 so we're kind of

picking our at the money they're closed out the money we're going to say buy a vertical here and i'm going to lock in this price oh i like that we'll lock in 908 actually to make the numbers easier i'm going to go to 910 okay make it a little bit easier on us in a spread like that for one contract we're going to spend 910 on this vertical the put spread is 20 bucks and so we know our max out of pocket is going to be nine dollars and 10 cents what's our max potential loss going to be it's going to be 20 minus 910 so that's going to put us at what uh 1190 is that right 1090. it's going to put it as a 1090. it's going to be the opposite numbers of this yeah a little bit uh let me collapse our watch list open up our scratch pad here for a little bit so we're going to say on this vertical on amazon we're going to say that's our max potential loss okay if everything in the world goes wrong with this trade yep we're going to be out 910 bucks uh our max potential gain that's going to be our mg is going to be equal to what i say 10.90 that means in this particular case we're risking a little bit less than what we have to gain that's percentage-wise is going to give us a kind of a juicy number juicier than what i had planned on initially when i was playing with some strike prices so you don't have to be quite this aggressive because we're going to say all right stock you've got to stay below what 23.20 that means it's got to do some moving about 16 away where it is right here but if it moved 57 today that doesn't seem like something so unreachable or if the average true range is uh 136 points oh it was 157 i think i said 150 or i think i left off the one there yeah but if the atr's 136 points 16 doesn't seem so outlandish okay when we're talking about stocks that have a small price tag absolutely that could be pretty big now i'm going to change this to a first trigger sequential and we're going to put in an opposite order here we're going to say create an opposite order and on the opposite order we're going to say go buy it back when it gets the majority of the gain we're going to suppose that we're going to be positive on this trade it is a hedge position and so some people when they're putting on a hedge position don't like to put in the downside of things they like to keep an eye on it instead you can do it however is comfortable for you if you want to put a stop sign on it as well and say hey if the spread gets down here so that it's only worth say i'm going to pull a number out of the air say five dollars then you might say okay that's enough for me but we've got a short bit of time here we've only got 15 days and that's another reason why this is quite aggressive so that's what we're looking at here i want to show you the probabilities of this right mouse click analyze trade and i'm going to get rid of this credit spread because we might take a look at it next that's my intent anyway set slices to the break-even points on options expiration if you're not as familiar with the risk profile tab i do a tutorial on this on our class called exploring thinkorswim in the notes uh in the description of the class in my post-production work i'll put in there a link to that particular webcast that we did it's i'm going to say it's about three weeks ago that we did that where we went over how do you look at the risk profile tab some of you this might be a fresh look at it and i have no clue connie and there might be some of you they're like yeah i'm starting to get the hang of it so i may talk about some of those of you that maybe haven't seen this before in any case what it's showing us here is kind of visually our probabilities so it may say something like sorry something came up on my screen that i didn't want okay uh it's basically showing us it has a 49 chance of being right smack uh a 23 31 41 or higher and a almost a 51 percent chance that it would be lower than that now theoretically we want this to we want the stock to continue to fall we want it to be on this side of the graph but like i said this one's a more aggressive setup it's kind of like a 50 50 chance you don't have to build it this way you can build it more conservatively you want to build it more conservatively you might come here to the trade tab and you might go well let me start down here at 2360 or something of that nature that maybe it's a little bit easier to stay below right because our short leg's at 23.40

2340 i drew it in here you guys probably didn't notice that i drew it in here oh let's see here 20 i put a wrong number then that should be uh 20 uh 2240 uh or 2340. in any case this is where the short leg is right here at 23 20. let me check make sure that's right 23 20 is where that law or that short leg is we want it to go past that point it's you know part of the distance there but uh not considerably so so again you could do it a little bit more conservatively if you wanted to but we're going to put this on we're going to say if we get a let's say 85 percent of our 910 credit so we're going to get say times 0.85 we're going to add 773 to 9.10

we're going to look to buy this back at 16.83 so we're just going to pop it in here right now and when you do a trade like this that has a very low time value or a long a short time frame before expiration you're going to notice time value eroding more rapidly and that could be one thing that maybe that's what you want to do with this trade is just have an observation okay and when you have uh something to observe you can kind of watch in the on the monitor tab and you can watch uh the time decay working very quickly all right we're gonna make this good till cancelled we're going to send it off and we're going to put on another trade that's a little bit more conservative some of you might feel a little bit more comfortable with this we are still let's put this in our account yeah trading stocks and options and we got filled on that all right that's good we've got our positions here and our exit order what would be more conservative here one being more conservative could be doing coming out to june giving yourself a little bit more time here that certainly would be more conservative doing a credit spread certainly could be a little bit more conservative here as well and so what we want to do get rid of that uh let's look here and see where what kind of opportunities we have sometimes people want to sell a 20-something delta or a 30-something delta because they want it to have a high probability of expiring out of the money now i this this column here that says prob o means out of the money and so we can see down here as we start getting to the 30 deltas yeah we're getting 68 71 74 okay for our purposes today let's go ahead and do um [Music] on this one i think i didn't write the strike sound i think what i wanted to do was this one with the 32 delta so that's going to be 2460. so we're going to say cell vertical right here 2460 and now it's spread out by about we can see 20 bucks here okay so a little bit bigger than maybe something you're used to dealing with this is going to say all right let's lock this in here oops okay we'll lock it in at 6 10. if we have the most to make in this trade with one contract is 610 what's our max loss well it's going to be 20 minus the 610 which should put it at what 1390 you guys correct me if i'm wrong uh and i'm gonna put that is our max loss so we're going to be risking more or risking a lot more than what we have to gain of 610 but what's the probability of our sort like expiring out of the money it's about 71 percent right now that's those are higher probabilities okay so it's helpful to kind of have uh something to relate that to going back to our trade tab let's bring our order back up we could look at getting out of here at 80 percent of the max gain or 90 or whatever percentage you're comfortable with again because we're on a very short leash 15 days we should see time decay we should notice it's going to decay very quickly versus if somebody wanted to go out and do the junes and jews are just fine somebody could do that as well for our purposes here today i'm going to put this in and then later i'm going to go back and i'm going to put in an order when we get eighty-five percent of it okay i'll plug that in for now we know our max potential losses or max gain is six ten six hundred and ten dollars we'll put it in our trading stocks and options as well we're going to send it on its way now i wanted to save a couple of minutes to show you how some of our trades fair last week you may recall we have earnings on apple and we did a really aggressive trade we used the options that were going to expire the next day so last friday we got in the trade let's spell apple right release the stock we got in the trade here and it expired here i wrote down our two short strike legs as we put together an iron condor which is a short call spread and a short put spread and the expectation or what you're wanting from the stock is to stay in this range and these were the ranges that the implied volatility was saying this is what the market makers expect the move to be and so we sold something that would be just a little bit on the other side of that well what happened the next day price of the stock gapped up some of you that may have been watching this in pre-market or post-market or right when the market opened it gapped up there was a positive reaction to the earnings it didn't last long and it continued to fizzle throughout the day but we made our max gain here we received a credit of 66 cents on this and so that works out with a a two and a half dollar wide spread that turned out to be about a 35 percent return for a couple of days of sweating it out some people might not feel comfortable with that i told you from the get the go that it was going to be quite aggressive now another one here that i really want to bring up because it has a decision to be made let's see airbnb a b and b there we go let me run it out here a little bit this is not some of the travel started to come alive some of the airlines some of the travel stocks were starting to come back alive and so we entered into a just a stock trade on eb and airbnb later we sold a call against it okay well what's the stock been doing since then yeah lower high lower high lower high it's really been struggling that call has helped well how much has it helped it's helped in the neighborhood of about five hundred dollars we brought in five dollars and five cents if we want to go buy it back right now just be done with the position which is what we're gonna do uh we're gonna have to buy it back for seven cents not a big deal but the position is down so much and it probably would have meant different exit conditions already had we still been in the trade so ideally you'd want to go close out the call go buy it back first and then step two is to go sell the stock you don't want to sell the stock because then you're sitting there with a naked call and if you're not approved for naked call privileges your broker's not going to let you do that anyway okay so that would be the proper steps i'll do that when our time when after our class is over in the interest of time right now let's see ap says you can't miss out if the price is moving far amount you have to come back and redo sometimes yeah if it's moved a fair amount uh yeah but the the idea here would be it's not looking like a bowl of stock right now we're in a bearish situation it's one we haven't attended to for a little bit so that's why i wanted to make sure we touched on it here today we're going to close down that trade again i'll do that when we finish here now let me see if there are any questions that we haven't addressed here yet um there was a question here for from lori that i miss laurie oh the log price keeps the price from floating with the market uh once you hit that lock button and yes the limit price once you you click on that if it's a limit order yeah it'll just lock in whatever that limit price was at that point in time yeah so i think you're i think you've got it there yeah the lock very good all right barb's letting us know james boyd is gonna be up next for trading the trend we really went through a pretty big agenda here today guys uh you stuck with me really good i appreciate that uh i would encourage you to maybe rebuild that scan on your own out in your live account but then practice in your paper money side if you decide to do any paper trades there and look for your own opportunities i want you to really focus on what's aggressive what's conservative the main trades we're doing today they're aggressive uh they might not always be appropriate okay and so i want you to kind of get used to sizing your own trades up about why is something more conservative why is something more aggressive and us using that short time frame that's one reason we can say that was more aggressive and then follow up on those trades that you do now i do not believe we had a survey here today but if you found this helpful go ahead and hit the like button if there was a survey that i didn't notice barb will post that in again for us but i don't believe that i saw one here uh as we wrap up here just need to remind you what we talked about today was for educational and informational purposes only not considered to be a recommendation of any security strategy or account type have a great day everyone will follow up on both those trades that we put in here today we'll do that next week hey thanks everyone we'll see you then thank you barb for your help i appreciate it bye-bye everyone oh it looks like there was a survey oh i miss that all right please fill out the survey for me i will say that that helps us out as coaches gives us some feedback i've modeled classes around some of the comments people have made before and they say hey could you touch on this could you touch on that and incorporate some of those questions into our next webcast so i'd love to see what's on your mind if you fill it out for me i promise i'll read every single one of the questions our managers do as well they like to know what's on your mind all right we'll turn you loose now hey thanks everyone have a great day bye [Music] you

2022-05-09 14:20

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