Exploring Probabilities Using Spread Hacker | Technically Speaking: Trading Stocks & Options
[Music] [Music] good afternoon everyone welcome to our webcast on technical speaking trading stocks and options i'm connie hill i'm happy to be with you here today you know it's a brand new year brand new day we're going to do something brand new we have not done before in this webcast you know it is called technically speaking which means we really consult the charts a lot today we're going to take a little bit of a sided step back we're going to look at some other factors people might consider when making a trade all right instead of only focusing on the charts we'll look at the charts here as well i want to wish uh all of you a nice hello uh out there we've got vijay krishna buyback sarah sol monique ganesh wayne tony and we also have our own mike fairborne uh he's my good friend and coach he is i'm happy that we have him out in the chat area because he's always so good to help out with questions that you might have and help me along the way let's grab one other thing here there we go i do want to point out here my twitter handle i am at chill underscore tda and throughout the week and throughout the trading day as coaches will post educational content that you might find interesting if we think it's interesting we think you might find it interesting too mike fairborne posts a lot of really interesting information i like to follow mike as well his his handle is at m fairborne underscore tda we'll have uh might type that out there so his his spelling on his name is accurate for you so that you can follow him as well well let's get started here let's go through some some important information we'll lay out the agenda and get to work what we talked about today is intended for educational purposes only should not be a considered recommendation of any security or any strategy or the account type options are not suitable to all investors as the special risks inherent option trading may expose investors potentially rapid and substantial losses while this webcast discusses technical analysis which we do a whole lot other approaches including fundamental analysis may assert very different views past performance of any security or strategy does not guarantee future results or success all investing involves risk including the risk of loss uh please no soliciting no photography no recording of this presentation but you are very welcome to take a ton of notes take all the notes that you would like to now our agenda today is going to be this we're going to just take a quick look at the markets not spend a ton of time there but just want to have that at your front of your mind because that's how we interpret different trades many times depending on what is going on in the overall market in fact as a newer trader that was something that i did not pay as much attention to as i do these days i want to show you how to use the spread hacker effectively and then we're going to look at some of the examples that come up in the spread hacker and see what kind of example trades we might consider using from having used the spread hacker all right let's get down to business here i should say as well hello to melanie and bill walter frank joan visach rk uh tuana i hope i said that correctly welcome to all of you here as well if i skipped your name i apologize don't get too mad at me okay all right so let's take a look at a quick markets item number one on the agenda i've got our s p chart up here and and hopefully you guys just kind of take a look at it every day get a feel for where the market is get a feel for the market what's it doing on a given day and what is the overall trend i've got a six month chart up here you could use a longer chart if you wanted and then drill into shorter time frames i'm going to highlight this we're going to zoom in it was only just what tuesday that the s p hit a new high again right making higher highs and higher lows so it shouldn't be too surprising to us to think the market overall is in a bullish pattern does that mean every single day it's going to be bullish no but overall is that what we're s p 500 can be a good gauge of of the overall market now let's take a look at the dow jones dow jones industrial average kind of a similar thing i should tell you my red line is a 30 period moving average my blue line is a 10 day simple moving average and so the 10 periods obviously is going to move around a little bit more quickly and react more so the recent price changes than older input so so we do see yep it has a nice stiff up trend right here but the 30-day moving average is gradually sloping up so maybe the intermediate trend is becoming a little bit more bullish than it was but the short-term trend still is quite bullish let's look at the nasdaq oh ndx actually oh it didn't uh it kind of got up here to maybe a potential area um maybe of some resistance it actually didn't make a high higher than the previous high right here so is it showing a little bit of weakness yes or some of the tech stocks getting hit yeah there are a handful of them that are getting hit that is causing the overall index to be down but today it looks like it might be bouncing a little bit here maybe at this 15 670 area looks like a little green candle here it hit here lower but seems to be staying in that range of support and so we could see the nasdaq be uh even though it's in a sideways trend taking a nice little bounce here as well now the weakest index that we've been observing is going to be the russell 2000 that's our small cap stocks and the russell 2000 seems to be caught in another trading range here in fact i'm going to just kind of draw it out here on the board and this has been since about november uh it's not doing what i wanted it to let's try this again oh my drawing tools don't want to work so i'm going to get rid of them here and we'll be bring them up fresh when we're ready for them here again but we can see maybe 2281 seems to be a resistance area for the nasdaq and the support area getting a little let's go over here to my camera and kill it and okay the camera has gone away we'll see if that helps oh and and excuse me i do have kind of a bad cough that's lingering from an illness so hopefully my voice will hold up for us here i think i've got the connection back i'm getting some response here that it's doing better so that's great okay we have an overall of the markets i apologize to you i have a lozenge in my mouth to help try to keep my throat lubricated and trying all those little tricks that we can try doing the best to make it hang in there so hopefully you can hear what i'm saying yesterday i taught a class on exploring think or swim we talked about how to use the scan tab in dynamic ways we're going to try this one more time i want to show you how you can use spread hacker here on spread hacker gives us a way to put in the things that we might be looking for for certain types of traits we're going to highlight this one and set it up to look for spread traits now those of you that have gone through spread trading and are acquainted with it great if you're somebody that doesn't know man this is bumpy this is like riding a mule instead of a horse a well-trained horse this spread hacker can allow you to find some variables that you like to see on spread trades if you're not a spread trader yet we're going to look at this from a bullish angle and so you could substitute a stock in there without doing a spread that's where it's going to fit in for you now i apologize i didn't think it would be this bad i thought i could just have a quick clear the throat and go on our way well watch me as i set up this scan and rest my voice okay i'm not going to point everything out to you and we're going to look for a minimum price of 40. we're going to explore some probability of profit and i should say when you start the scan up this is what it looks like it just doesn't look like that that's okay you can change it we'll come up here to the top and hit reset it'll start a blank with these three fields now the probability of profit is the probability of having success in a trade now in short verticals we like this to be sort of high it can't be incredibly high because that's just not realistic but if we do something say for example from 60 to 85 plug that in and then our max profit you know we're not looking for pi in the sky numbers here we're going gonna put max profit from a thirty percent return to less a forty five percent return somebody somebody mentioned something about having some ginger tea man i need something don't i and yes i'm hitting some resistance in my voice you're absolutely right okay so we have some parameters set up there let's look at a little bit more we're going to add two more filters here and i want you to know there's not a lot of filters you can choose from here if i click on the down arrow you will see what i've got going on here there's not a lot really we can add things that help from an and an analytical basis not a technical basis there's nowhere in here to put a trend or a moving average or anything like that or just simply looking at the numbers and that's what this setup does is it just looks for numbers it doesn't go out and check some other things that maybe in the technical analysis world we really like to check for example i'm setting up a bullish trade i am interested in figuring out and finding out if the stock looks like it's an uptrend or not and with this scan it will not do that so i want you to know it's just by the numbers now let's add a couple of things in here let's put in our delta range here because we might be interested in selling deltas in a particular range on short verticals a range can go anywhere from say 0.3 to 0.4 maybe 0.45 some people might be accepting if delta is a little lower than that for our purposes here today we are going to go a tad lower because some of you don't mind that range it is a little bit more conservative we're going to go from a 20 to a 50 delta and remember delta is a rough approximation for likelihood of this exp option expiring in the money then we have our last variable days to expiration now i'm going to take a little bit of a pause here we're going to go look at something i'm going to come over to the trade tab we're going to look at apple if apple will come up you know i just realized since i took the camera off you are not going to see me dabbing my eyes as they close which makes me so happy you're not going to see all my smeared mascara okay and as we look at the chain here we can see yeah there's a lot of different series we could look at ones that expire in a couple of weeks from tomorrow and some that expire weekly right maybe it's it's next friday maybe it's three fridays out we could have this and a lot of stocks do have a lot of open interest here but not all stocks do that i'm using apple as the example because many times it will have a lot of open interest okay so look at this one 22 days out we've got lots of open interest here on the call side we've got lots of open interest here on the put side a trader could feel fairly comfortable just focusing on certain deltas on the weeklies with apple but if i were to bring up something else i'm just going to bring up a stock here cve so smaller cap stock it doesn't have weeklies available uh afford it it just has the monthly expirations available that is just fine we can still use that but what i want to show you on our scan is we're going to target to get back some strike prices that fall within this october 18th expiration so as we come back to the scam we know it has 43 days so on days to expiration we're going to target those we're going to put 42 to 44. okay that encapsulates that little that really small tiny range that will eliminate the weeklies for some of you you might like that for some of you you might not like that okay so that might be an adjustment that you want to make to this scan i'm going to say bring us back 200 and his scan it's brought us back several now i've been playing with the results of the scan earlier today right that makes sense for me to be able to take a quick peek in there see what's going on so i've kind of cherry picked here a little bit and some of these sticker symbols that are coming up now did not come up earlier this morning even though i put in the same criteria so this is a really dynamic scan there is no way to save it all right i've got to tell you that because that's going to be a question that comes out is going to say why i created the scan here connie why why can't i save it and it just doesn't give it to you as an option to do okay so you got to take good notes if you want to recreate it again the good thing is is you probably won't create a ton of spread hackers all right you might create one or two maybe three that you use for your purposes over and over again it doesn't have as many variables in it and it's not like the stock hacker where we can save but you can see we have a i have a multitude of saved searches with this all right i've got i don't know how long that list is let's say it's 20 and 20 here and 20 here okay i've got a lot of them on the spread hacking you probably aren't going to have that many variations that could be and i don't know because i'm not programming on it but that could be one of the reasons why there isn't a saved uh functionality right now and i don't know if there ever will be okay so just take some good notes on what you might want in there now i do want to point out what we're getting we are getting on here uh let's look at through some of these columns uh so guess what we're seeing on the expiration date did that target those expiration dates i wanted it to yes do you have any weeklies in here no do some of these stocks trade weeklies yeah probably so i think if uh fcx does it's moving around here on us that probably trades weekly options there could be some of these that don't and maybe there are some of these that you don't even recognize you don't know the ticker symbol so uh but look at these columns here we get basically what is the value of that spread that we might want to go get into we see the probability of profit now it should fall in this 16 to 85 percent range if on the second that i clicked the scan button there was a combination that met the criteria it will come up but it may not be reflective of it maybe it just barely hit our criteria and then it drops out of the criteria so we might get a few little loose ends in there don't worry about it there's our probability of profit screen here's our max profitability screen or column i should say i was saying screen really meant column our profit loss uh this probably says um profit and loss margin column okay so it gives you a lot of good data here even shows us our delta and it'll reflect the delta that's being sold it'll reflect the first one in this combination here now there were some that i took a look at before our class started here and one of them was fcx so we'll start with fcx i'll first of all want to pull up the chart fcx now as we look at the chart is it generally in an uptrend yeah it is isn't it so we see the nice upward trend it's above the 30-day just dipped a little bit below the 10-day so trend-wise it's giving us the idea that yeah just making higher highs and higher lows yesterday it hit a new high again is it meeting the criteria that some might look for for an entry on a short vertical well some people might look at it and say well i don't see a kaholt i don't see a close above the high of the low day i don't see a support bounce whether the support balance is a moving average or something horizontal now we could maybe say well maybe there's some old resistance here that's acting as new support would be the case uh but it's very limited in terms of how many times it's really touched that area so you may see some results from the scan that technically are not supported right because is there anywhere in the scan to put a moving average no is there anywhere in the scan to put a trend no okay these are just some straight numbers but what we're going to do today is we're going to use this as an example to say maybe we want to do the trade anyway even if this chart doesn't look like it if we're just basing it off of the numbers and the probabilities all right uh so let's take a look at fcx here this particular little trade looks like it's looking here at the 40 35 put and it's saying it'll generate a credit of about a buck 51. now let's go see if that's the case i will tell you earlier in the day it gave me a couple of different strike prices here that it used well let's jump over uh keep in mind we're doing the 40 35 is what it is identified we're in the series of february so we're just going to open up february they were puts they didn't point that out to but they were puts and they were 40 the 40 strike and the 35 so there was separation here by five strike point prices now do they have open interest oh baby yeah that's a lot of open interest right you could feel comfortable swimming in this pool because there's lots and lots of contracts out there so uh we could take the one that it suggested to us on the screen results we could do the 40 35 spread we could also say you know that was kind of nice that it pointed that out to us but maybe i might be just as happy with another spread selection so let's do this we're going to do a cell vertical right here we're going to set it up the way that it's said that it came back in our results and again they're suggestions they're not you know what comes back in a search is like i said it's just the numbers that's all we're seeing is just the numbers and it doesn't necessarily mean it would be successful it doesn't necessarily mean it could be bullish you know it's just calculating some numbers there for us now i'm going to lock this in here uh at a buck 54 for this credit and i have a blast all in here i changed it from a single to a blast all so that i could compare a couple of different ones if we wanted to so for example this is the one that showed it said it was about a buck 54 credit and yep right now it's a buck 54. so we're seeing it we could also say let's do some analysis here what if you're a person that likes to maybe not sell that quite high of a delta that's a 43 delta what if you are more comfortable with something in the 20 or the 30 range could that be a possibility here as well it could be what if we were to say let's look at selling say the 38 it has a 31 delta let's say if we did the 38 35 that's only a three dollar widespread let's see what that might look like so we're going to say sell vertical here's our 38 we're going to change that 37 to a 35. let's see what kind of a
credit we get back here and i'm going to go ahead i'm going to lock both of these in that was a penny lower i'm going to lock it in there just so we have some even increments that we can work with in fact i'm going to make that up there to 75. now if we were to do some math here some of you in your process of setting up um spreads might say well i want to make sure i get at least a blank return on the one that it gave us the 4035 it said our maximum profitability on this trade no it's down there is about 60 anything that is 60 or higher might be considered high success rate now could the system have brought back a a ton of different combinations on this fcx it could have it could have gone to other weeklies it could have gone to other monthlies but we've firmly targeted the ones that were the february monthlies just so we just had some basics to work with here and it could be that somewhere in this search and i'm going to scan down here and see if it appears the fcx with different strike prices could very well appear okay here it is down here a little bit lower it is saying hey you could do a oops at 35 39. yeah that's a possibility as well the one we're looking at is a 38 35 is our second one up here so which one is best okay is the best one the one that the scan came back with the spread hacker or is the best one the one that meets your rules well let's test out what a couple of rules you might use let's go calculate the return say on this first one our first one the max gain is a buck 55 the max loss is what it's gonna be five dollars minus a buck fifty five so we're gonna be looking at here three dollars and 45 cents we open up our calculator here kind of use our space a little bit better here if we say max gain of a buck 55 divided by max loss of 345 gives us about a 45 return is that healthy yes would some people say you know it doesn't have to be quite that aggressive maybe we could step it back a little bit and that's why maybe the 38 35 some people might be interested in that because that gives us a little bit more leeway instead of having the stock make sure that to get a max gain out of it we need it to stay above 35 what if we only needed it to stay above 38. that gives us a little bit more weight there doesn't it so say on the 38 and let's let's uh calculate what that would be the max gain here is going to be 75 cents the max loss here and i'm writing these numbers down in the scratch pad in case you're not seeing it you're not seeing me point to it all right the max loss is going to be the difference in the strikes three dollars minus 75 cents so we're looking at what 2.25
is what we'd see there for the potential max loss so this one we already calculated it gives us about a 45 return this one if we say max gain of 75 divided by max loss of 2.25 so i must have hit something wrong there let's let's calculate it cleanly again 0.75 divided by 2.25
okay gives us about a 33 percent return i wanted that to come out a little cleaner there okay so i'm curious uh uh for those of you out here that are listening to this live which one do you think you would prefer do you think you would prefer the 38 35 or the price of the stock uh the strike that we sell uh needs to stay above 38. and i misspoke a little bit earlier here i was saying it had to stay above 35 it was really this 40 strike okay the 40 strike is the one we're saying it has to stay above in this first one so uh that certainly is a lot closer to the current price of 4068 it only gives it 68 cents leeway versus 2.68 leeway right by by taking a slightly different strike prices and now all of them aren't going to have this all these choices like fcx is all right uh the question here says well actually let me just go up a little bit higher and see the comments a test says if you're buying a long call option that costs 50 cents could i say that they're that it's like buying the stock for 50 cents a share no option contracts are completely different than than the stock okay it would be unusual to have a forty dollar stock that has a five cent strike price or 50 strike price i should say uh thank you mike for helping me out there as well curtis wants to know if i'm on paper money or life the data feed is live but it is a paper account as coaches we have kind of what's called a uh demonstration type account that mixes some of the qualities of paper with the live data so we're seeing live data here uh if you're looking at your live data they should be pretty dang close to each other and curtis says well you've tried both of them i'm not sure what uh [Music] the question is for you if your numbers are coming back different that's what i'm going to guess that it is uh okay so monique says i would prefer the 3835 so does jr and nydia and leanne and it gives us some details lower max loss is nice a lower max loss number yes it could be lines so that's why somebody might be more interested in doing this second one that we put together rather than the first one it doesn't mean the first one is junk or that the scan returns junkie option so possibilities as it is so much guess what it gave us a good start good it gave us a good start going down the line of what we might consider and we saw further down the line yeah it did pick a different couple of different strike prices for fcx but i had it sorted uh i think by the the maximum uh potential return on it i think how i had it sorted so for our purposes this is what we're going to do we're going to get rid of the more aggressive one because our class voted here and some of you said no i like this other one better so we're going to delete that one but we are going to trade this one here we're going to put some comments in here and actually i'm going to do a first trigger sequential we're going to create an opposite order to go out and buy back the spread if it needs uh like we've been able to capture the majority of it all right so 75 cents if we capture 85 percent of that only 15 percent is left so i'm going to multiply that by 15 percent 0.15 that says go buy it back at about 11 cents you know if you put in 11 or 12 you know it's something in that ballpark whatever you feel comfortable with we're going to go with the absolute calculation of 11 cents we're going to say good till cancelled in our class we typically don't want to risk more than 750 dollars per trade in this particular trade uh the max loss per one set of contracts is 225 so theoretically here we could do three of these spreads couldn't we without exceeding our risk so we're gonna do that we're gonna go one two three and we're gonna go one two three make sure those match each other as we come to the confirm and send after you've selected good tilt cancel that lasts about six months these options are going to expire well before six months is out there just review it make sure it makes sense as far as what you want to do notice we've got multiple contracts so we're going to have multiple conditions all right plus we've got two legs so we've got 65 cents times three and then we've got another three here okay so we've got six that we're multiplying that by that's how it gets up to that six uh well that's how it gets up to this 390 right here in the commission area okay looks good we are going to do this we're going to put in our trading stocks and options and i'm going to make a note here that says not a technical entry oops i didn't mean to have my caps on but i'll just leave it there and then we're going to go ahead we're going to hit send off it goes we got filled immediately we got a couple more cents out of it we put it in for 77 cents it filled us at 75 cents sweet let's take a look at what else might be on this little spread hacker here that we might be interested in uh so we we saw fcx here at the beginning and i'm going to see if the ones that popped out to me earlier are still popping up here one of them was tjx let's see if tjx is here well tj actually used to be on here the other one i was looking for here is intel now both of those had come up earlier and were some examples that i was running with and i am not seeing either of them here as an entry in our list of possibilities okay let's suppose it did come back underneath the possibilities tj maxx it came back it was saying hey look at the 70 75 strike prices on tjx and it was up here as one of the returns that met the criteria it was quite high oh here's our intel this is the intel i was looking for i think uh where did you go intel you moved around on me 5250 75.50 yeah this is the one that it came up earlier saying it has about a buck 34 credit on that two and a half wide spread or five dollar spread probability of profit it's above 60 right it's 62 percent as of right now so would that meet some people's roles yeah it might does it meet your roles i don't know right maybe you like to have a higher probability of potential success on a trade maybe you like the number to be 68 or 65 or something like that maybe you would like it to be higher and that's fine but let's go ahead with this and i know it's kind of moving them around a little bit uh so let's go find it the 5250 and the 4750 on intel again we're still in in the february options and what do we say we said the 47 let's see 52.50 which is right down here
and the 47.50 right there that it spreads it out by five dollars if you wanted it to be a 2.50 spread and do the 50s you could certainly you could all right now some of you might not feel as comfortable with this delta of a 40 because it's kind of on the higher end of the delta range that we might look for but we're going to use it for our example here anyway and so we're going to go 5250. i'm going to say cell vertical it's just going to grab the next one in sequence the one that it pointed out to us to do was this 4750 here okay either one is fine you can run the numbers and see which one you're more comfortable with if we go 4750 here spread it out a little bit more the credit is bigger but our risk is a little bit bigger as well okay we're still wanting the stock to stay above the short strike price of 52.50 and we haven't even looked at the chart yet because this one we're doing just by the numbers whatever those numbers calculate for us even though maybe there's not a basis for it on the chart all right let's just take a quick peek at intel [Music] all right is it an uptrend yes is it that support not necessarily is it looks like maybe it bounced off support three days ago four days ago and it looks like it's quite a bit higher than the 10 moving average here which can be very bullish and positive okay but it's not like it's like a hole it's not like it's a flag breakout i would say as well it probably isn't doing a resistance breakout either so from a technical basis we might not see it in the chart but for probabilities we're going to go ahead and do it for our purposes here today so let's do this we're going to do the one that it suggested the 5250 and spread it out a little bit wider by five bucks for a buck 35. let's kind of lock that in that's going to be our max gain here so let me i'm just gonna make a new one here okay this is gonna be for our intel okay so our max gain is a buck 35 we spread it out by five dollars so five dollars minus a buck 35 should be what 3.65 right
3.65 is going to be our max potential loss let's see what kind of a return we have on it so we're going to say max gain is about 30 oops about 35 divided by a max loss of 365. i put a wrong number out there you guys correct me you're usually pretty good at that it says hey that gives us about a 36 return some of you might be happy about that you might say yeah the delta is a little bit higher than i want but have we done say a 50 40 750 the percent return might not be in a range that you're happy about doesn't mean you couldn't do it doesn't mean it's a bad idea uh it just might be lower well it would be lower okay if we did the math on the 50 40 750 here now we're going to do the same thing here where we're going to say let's go put in a buy back order you can be out having lunch walk in the dog whatever it is you like to do wow and let the system capture for if it gets to that point so we're going to say create opposite order and then when we get a majority of it again let's use 85 percent it could be 90 it could be 70 percent you decide what that number is okay again we're going to say 85 percent of the max gains we're going to put in a buck 35 if we've got 85 then we're left with 15 and so that equates to about 20. so we're going to just pop it in here we're going to say okay system this spread gets to a point that we can buy it back for 20 cents do it and of course we're going to put a good tell council these options aren't gonna last forever they're gonna expire in february we're gonna hit control or we're gonna hit send just review it make sure it represents what you want and i did forget to position size this here didn't i with a max loss potential of 365 per contract uh that if we do two of these that's going to keep us within our risk tolerance we really wouldn't want to do more than two because that puts us over our 750 that we might be worth or that we might be interested in saying hey i'm willing to risk this x amount but i don't want to exceed it here all right so here's our max loss potential seven dollars or 730 dollars that keeps us below our threshold here again we're going to send this to trading stocks and options and i'm going to put on here a non-technical entry but we're going to watch it and see how it works we're just doing it based on the numbers let's go ahead and send that in and we're going to track this as we get together next week we're going to track it even though we didn't see a flag even though we didn't see any ka holds on these we're just going with the percentages now let me see if there's any questions that i need to make sure that i mean do the answering i appreciate mike helping out in the chat and answering questions as we go here mike does such a great job in fact he teaches some of these strategy classes during the week as well not the verticals per se although he steps in and helps out with that class quite a bit uh let's see here taz was saying oh okay you guys are just having a little bit of a conversation between yourselves uh money said if if the strike i choose uh close to at the money the stock will be assigned to you okay let's talk about that because that is one of the risks of this trade is the possibility right if we sell like we did here we sold the 5250 the price of the stock drops down below 52.50 is it immediately going to be something that's assigned to me no not necessarily if it's the day before options expiration date or options expiration day yeah that's a much higher pop possibility right we're several days out from options expiration so it is not as likely to happen but sure technically it could happen and it could also happen um you know if the stock uh goes well beyond your strike price then you're going to be kind of in a situation where it's more likely to happen that if it just kind of barely got to it and then moved around maybe bounced back up okay so it's not an automatic thing that happens until you get closer to options expiration date says well why are we using 80 profit gain but in the scan we have profit going to 45 percent but that's a good question let's come back here back on our scan here we said we want the profit the basically our return on the trade to be somewhere between what between 30 and 45 percent now it could have been when i ran the scan it met the criteria immediately and so i we jumped on it we're going to use it and maybe the numbers have changed a little bit if the price of the stock has changed this range here the 60 to 85 percent is what's the probability that that option that we sell is going to expire out of the money and that's the one we said well let's make it between 60 and 85 percent and if i come back here to our our 5250 here right now uh the numbers have changed a little bit now it's only a 55 probability that it would expire out of the money even though our initial threshold when we submitted the scan was 60 it mattered at that time but as these numbers changed so quickly that percentage can change a little bit on us but that's good for you to notice uh where do you set a stop loss on spreads some people and we didn't do this in ours and we're going to have to wrap up here on ours that we did some people might say well if i close two times the credit the opposite away maybe that's where they draw the line you could build that in we could make it an oco order that says hey if you go two times the credit the opposite direction go buy it back would rather take a partial loss than a max loss and you certainly could build that into your equations okay and monica answered your question about the stock if it uh closes between the strike prices yeah it kind of depends which one it's closest to all right but yeah if it closes uh so that your option is in the money even by one penny it's very likely that it will be exercised on you okay i can't promise because i'm not the person that does it uh but it is fairly likely okay so in terms of what we talked about we went through what the market looks like how to use spread hacker we looked at a couple of possible trades that came out of that spread hacker scan and i'd encourage you to create your own spread hacker and then review the results that you receive and see if there are some good candidates on there that you like again for those of you that are not option traders that are stock traders you might look at this as an opportunity to see hey does the stock look like it's a bullish dock does it have an entry that i would like if it doesn't have an entry you would like you know maybe you take no action on it until it actually meets something that you would like as i mentioned i did teach a class on this exploring think or swim last night at 5 eastern and that recording should be out there i haven't checked it before at class but it should be out there if you want a kind of more in-depth understanding of how to use the different tools in the scan tab if not if this is a little over your head maybe go to mike fairborne's class tonight at five eastern where he talks about getting started with thinkorswim it's a little bit lower pace not quite as intense information in it now as we wrap up here i just need to remind you that what we talked about today is for educational and informational purposes only should not be considered investment advice or a recommendation of any security strategy or account type coming up next we've got trading the trend barb armstrong is going to step in today for james boyd he had something come up and she said i am happy to help out so go check on barb's class that's going to start at the top of the hour all right thank you everyone and we'll track these trades next week bye-bye you
2022-01-08 08:07
