Total Alpha Online Workshop Notes
Jeff Bishop : Well, hello, hello, hello, everyone. Welcome. We are going to go over the state of the market, do some live trading, share a lot of tips today. It’s going to be a fun time. Why don’t you guys type in, “Yes,” if you can hear me. Real quick, just do a quick sound check, make sure you can see and hear me. We always have a few tech issues, so I want to make sure it looks good today.
All right, great. Well, thanks for coming out. I know it’s lunch time for some people. It’s breakfast out in California, so we don’t normally do a noon session, and I never do a session like this. So this is the first time I’ve ever put this together.
I’m just going to go over some thoughts on the market, where they are right now, and where we’ve come this year and just where I think some of the future trends are going to go, some stocks and how we can capitalize off that, and share some trading tips and ideas, then get right into live trading.
So there’s a lot on the plate today. I’m really glad you showed up. You are not going to regret this. It’s going to be a good afternoon. So thanks for coming. Let’s go ahead and get started.
All right, so this is the state of the market. I like this nice little graphic here. It reminds me of something from North Korea, actually. What about you? I don’t know if our graphics team was thinking of that or not, but there we go.
The first thing I want to start with is the evolution of the options market in the last year or so. We have never seen so many option traders out there as we do today.
I mean, if you’re here right now, there’s a good chance you are an option trader, or you want to be. And a year ago, it was much less. So we’ve seen a steady increase over time.
I think with lower commissions, easier technology and more education out there, we see more and more people coming to the options market. So it’s a fantastic thing.
I love options. It’s my favorite thing to trade and do. I’m glad you guys are here, and we’re going to talk a lot about that today. So options are just getting more and more in favor with the mainstream.
E-Trade recently said about 25% of all their accounts … It’s the biggest online broker. 25% are now option cleared, which, that is a new thing. That’s not been that way in their history. So I think it was like 15% a couple of years ago, and 25% today. That number just keeps climbing. So there’s more and more options out there.
One thing I think that people make a mistake on, is they become too comfortable in buying only. So people become comfortable only buying options, when they need to be focusing on selling. So as a seller, you have, usually, about a 60% chance or better of winning
your trade. As a buyer, you have just the opposite. It’s about a 40% trade.
So more and more investors are now trading options, but not enough are focusing on selling options, which is where they really need to be focused on.
You need to be able to take advantage of both sides, but being able to be a seller of options more than a buyer is going to put the odds in your favor more often than not.
All right. One of the first things here, you need to be ready for an economic downturn. So we’ve been in a 10-year plus bull market at this point. Everybody’s a genius. It’s easy to buy stocks by the dip. They go higher. You don’t really lose on some of these short corrections, and they are short.
Every correction we’ve had in the last few years is bought up with just a week, or so. So we haven’t had any real fear in the market. And even today, we’re back at near all-time highs once again. So this market’s been incredibly resilient. Every dip is bought.
But what happens when it’s not? What’s going to happen when we see the next prolonged downturn in the market, and how are you going to be positioned? If you are only trading one side of the market where you’re only buying stocks or buying options and you’re never selling or shorting against the market, then you’re leaving yourself exposed.
You’re only doing one side of the trade. And when everyone gets on the same side of the trade, when that thing reverses, it’s big trouble. So I really think that the market is poised for a pullback sometime. Ask the question, do you think the market is going to go 10% higher or lower from here? What’s the next move?
I don’t know. I personally think it’s going to be lower. Maybe you think it’s going to go higher, but the next question would be, what if you’re wrong? I don’t know where it’s going to go. I think it’s probably going to go lower from here, the next 10% move.
But if it doesn’t, I’ve got to be prepared, either way. So we’ve got to be able to take bets on the market on a direction and be ready to change course if it proves that we’re not right.
Now, options give you a great ability to do that, but we need to be nimble as traders and not be so sold out to our positions where we’re blindly going to stick with one side of the market or the other.
Another huge event that’s transpired this year is commission-free trading. This is a groundbreaking thing that, in the history of trading, I never thought it would get here. I thought we’d get lower and lower commissions, but I never thought we would get to $0 commissions.
In fact, there’s rumors of commissions where the broker will actually pay you, coming up; that your order flow in your account is so valuable that they will actually pay to have you trade. We’re not quite there yet, but that could be the next evolution. Much like 0% interest rates and negative interest rates were never a thing in the past. Well, they are today. So commissions have been lower and lower.
Commissions on trading are just a friction in the market. And as a trader, it’s a tax on you as a trader. If you’re a fairly active trader. So maybe you make one trade a day. I know a lot of guys who make 20 trades a day, but maybe you make one trade a day. There’s 250 trading days in the year. The average commission was $10 per trade, in and out of a stock. So that’s $20 each time, times 250 days a year. That’s $5,000 in commissions, if that’s what you were doing before.
Now, maybe you had a great deal, maybe you’re paying $5 commissions before. Well, that still would have been $2,500 a year, if you’re making one trade a day last year.
This year, it’s going to be zero, going forward. So just think about that. That’s money that was going to be put in Ameritrade’s pocket or E-Trade. Well, it’s now going back in your pocket, so that’s going to make every trader a little more profitable. It removes a little more friction. I think it’s going to bring more and more people to the market, also.
So overall, I think it’s a fantastic thing for the markets. I really did not expect this to come so soon. Robinhood has put so much pressure on the other brokerages, that they had to do this. They were losing market share. They had more and more people coming up into Robinhood. And TD Ameritrade and E-Trade, all these guys had to bend. They had to say, “Well, we’ve got to follow suit.”
So now, that just took the legs out of Robinhood. I don’t think they have a superior trading platform, but we’ll see how the growth is. But at least now, everybody’s on equal footing. It shows how fast an incumbent can rise up and cause a big disruption in the retail space.
Again, this is a great example of a disruptor coming in and changing a market really quick. Robinhood, for example, saw a need in the market. They addressed it with the free trading. They built a huge following, no profits, no care about that; all about growth.
And they disrupted some industry leaders who have been here over 20 years, now; E-Trade, Ameritrade, Fidelity, these guys. These were the original online brokers, and they’re now forced to change their business model.
I think this is a trend that we’re going to see more and more in the markets every day. We’re already seeing it, and we’re going to see it happen more and more. So as traders, we got to be prepared for these kinds of trends. You don’t know exactly what Ameritrade is going to go to zero commissions like they did.
That was a huge smack for the stock, but I think there’s stocks out there that you need to be looking at that are going to be disrupted. They’ve been the disruptor in the past, but they are in jeopardy of being disrupted, themselves. By that, I mean their whole business could change overnight. And the competition’s getting so fierce for these guys that they’re going to be forced to make big changes or have lower margins on their already unprofitable businesses.
I have some examples here, like Netflix; Uber; Beyond Meat, even, fake meat. They’re not the only ones who can make fake meat. There’s lots of companies. GrubHub, Zillow. Netflix, in particular. I think this is one that just has a big potential to be disrupted.
We see so many online people already come on with streaming services, and it’s already taking a big chunk of their model and it’s going to get bigger and bigger over time. Disney is going to take a big chunk of that. We’ve seen it with Hulu, we’ve seen it with HBO. Everyone’s deciding they can have a streaming service, too. They’ve got their own content.
They can go, not head-to-head with Netflix, but they can definitely be a competitor. They can complement it well, they can take a piece of the market. That’s forcing the pricing on Netflix to go lower over time. At the same time, they need to spend more and more money on content.
So by having slower growth, lower margins and higher content costs, that’s not a good mix for a stock. So that’s what I mean by a disruptor being disrupted. And we’re going to see that across the board in all kinds of industries.
As soon as Amazon, Google, Apple, these guys come in and they smell a profit or they see something that they can come in and innovate that has already been established by someone like Netflix who has spent billions and billions of dollars in 10 years building a market; well, Apple can come in and say, “You know what? We can do that, too. In one year, we can do that and do it cheaper,” and come in and be a competitor, at least. And you’re going to see that in every market.
Beyond Meat. You think they’re the only ones that are going to make fake meat out there? Well, they’re not. I tell you what, there are companies right now and nipping at their heels already. They’re not public, but Beyond Meat has got a huge headwind of companies coming after them for their market.
Uber, you think Uber’s got anything proprietary there; they have maps and they have cars, they have services here, but there’s a lot of pressure. Don’t think that Tesla couldn’t go after their market or Apple couldn’t go after it. There’s all kinds of possibilities where any of these guys could be disrupted.
The big tech giants realize this, too. They’re always trying to protect their core business, but these guys have big moats around it. There’s no one who’s really going to dethrone Facebook tomorrow, with social media. There’s no one that’s going to dethrone Google with their search capabilities and their advertising. These guys have huge moats around it. There’s no new iPhone coming out tomorrow, but these guys have the wherewithal to take over any kind of business out there where they can come in and make a few bucks on it, so be aware of that. There’s a lot of industries out there that are just prime to be taken over by other disruptors.
All right. Another big trend that we’ve seen this year is the collapse in interest rates. I think this is only going to get lower. We’ve already seen rates go down quite a bit, but I think they continue to go lower and lower. One of the big reasons is Trump wants it. If your President is adamant about seeing lower interest rates, then interest rates are probably going to go lower. He’s going to keep pressuring the fed to make lower and lower interest rates.
So as investors, we can’t fight that. We’ve got to get on trends. So how do we make money off of that? The rest of the world, they’re at zero or close to zero. A lot of them are negative interest rates. I mean, big countries. We’re talking Switzerland, Germany, these countries.
Can you believe that they are actually paying people to buy their bonds? That’s ridiculous. In all my years of economic theory when I was in school, that was never even a thought. We always had this lower bound of where interest rates could go: at zero. That was the lowest point rates could ever go. And even that was just a theory; it would never actually happen because who would ever give someone money for 0% interest?
There always had to be some interest rate there. Well, things are changing, and now you can have actual negative interest rates in the market.
I don’t think America is headed there, at least not anytime soon, but I certainly think we’re headed lower. So where rates are now, I think that there’s a good chance that they could be a whole half, maybe a whole point lower than where they are today, on the 10-year and the 30-year notes.
So I think those could easily go lower, and probably will. So in my trading, I’m thinking about how I can position myself on trades like that and make money on those bets.
One thing I like to look at here are companies at the most risk, and something that comes up really quick is the net interest income. If you’re a company that makes a lot of money off net interest and interest rates are going lower, you’re probably going to make less money. So some of the big ones out there: Schwab, Ameritrade.
Just look at this list. These kinds of companies, they are going to be under interest rate pressure going forward.
So it’ll be interesting to see how they deal with it. A lot of the brokers, if they’re now having zero commissions and they’re dependent on interest income and interest income is going away, that’s a problem.
So it’ll be interesting to see how they deal with that. But those are bets that I like to bet against, those kind of companies. I don’t know if they’re going to overcome it or not, but it’s certainly not in their favor right now.
Some one of my top ways to play are lower interest rates. We’d be going long TLT. So TLT is a proxy for the 10-year, or maybe 20-year note. Interest rates and price of bonds are inversely related. So as interest rates go lower, the price of the bonds go higher to offset that. So they’re inversely related. That always holds up. So as rates go lower, the price of bonds goes higher. So by buying TLT, you’re essentially buying that bonds are going to go higher.
So if I’m right, that rates are going lower this year, TLT will be going higher. How do you play that way? You can buy calls, you can flat out buy TLT. I think the best way is to be selling puts on TLT. So only look for put-selling strategies, where I can sell premium to someone else and collect premium over and over again.
So you’ll be seeing me do that more and more in Total Alpha. As I’m trading, you’ll be seeing me sell puts on TLT quite a bit, mainly using spread so I can limit my risk, but I’ll be showing you how to do that all the time.
I also believe that XLU and IYR, these are the utility index and real estate. Those are two industries that are really going to benefit from lower interest rates. So we’ve already seen a big run there. I don’t think either one of them is a great place to buy right here. I kind of like XLU, personally, if I had to pick one.
But I think both of those are great to look to buy on the dips. I’m going to continue to look to add those to my own personal portfolios, I can, because those are going to benefit as rates go lower. These are very capital-intensive, interest rate-sensitive businesses. And as rates go lower, both of those are going higher. So that’s what I’m looking to get into.
And stock buybacks. I’m going to talk about this more in just a minute, but stock buybacks have been fueling a huge amount of growth in the market, overall. We all know that. Stock buybacks are massive. They’re only getting bigger. And with lower rates, I think we’re going to see them continue to escalate higher and higher.
I don’t even think it’s that dependent on the strength of actual earnings themselves. Companies are going to use them as a way to finance and just take out more loans to buy back stock. So it’s a really interesting phenomenon on the market and we’re kind of an uncharted territory, here.
Look at this chart real quick. This shows you the amount of buybacks in the market over the last few years.
So if we look at here, for example, look at how big this has gotten. These are all billions of dollars. So we’re talking at $800 billion a quarter, that’s a lot of money. We’re talking nearly a trillion dollars in buybacks, there. This is unprecedented territory. When this kind of buying is in the market, how can stocks stay down too long?
So we want to think that market’s going to correct, all time’s going to go lower. It makes it tough, no matter what the economic situation is, when companies are buying this kind of stock in the market all the time. I mean, that’s just a ton of money always supporting a bid. It’s always buying stock. That’s a lot out there. It’s a tough trend to go against.
So while we want to think that the market’s got a lot of issues; that unemployment could creep up, maybe interest rates are making you nervous, maybe growth’s making you nervous. There’s a lot of things that could make you nervous about the market, and I certainly think it could pull back, but I don’t think it lasts long.
Mainly because of things like this. There’s an enormous amount of ammunition out there with stock buybacks, just waiting to happen. And with lower interest rates, I think you’re going to see only more and more buybacks, there.
So some of my buyback bets finishing out this year, especially are Cisco, Google, Visa and Lowe’s. So take a look at those four stocks. Those are ones that I personally want to be buying on dips. Number one, they’re fantastic companies. They’re great, well-run companies. They’ve got a lot of ammunition there, on the buyback side. These guys are loaded with cash. They’re ready to buy stock. They’re going to get out there and support their stock anytime they can.
So when there’s a dip, they’re going to be a buyer on it, and that’s going to be providing natural support out there. So these guys are buying it, I want to be right there with them. I’m going to be looking for dips and opportunities when I can come in and buy the same stock.
It makes you also wonder how far can this go? How far can companies go with buybacks? I mean, theoretically, a company could buy back all their stock. They could finance enough debt to buy back all their stock. They could have zero stock out there and be all debt. And if they could borrow at 2% interest, maybe it makes sense to buy all their stock back.
That would be a huge prediction. I don’t know if that’ll happen anytime soon, but I could easily see more companies taking themselves private, essentially, because of low interest rates and the amount of cash they already have on hand and the ability to borrow in these markets. So not outrageous at all, I think that could happen.
We’re seeing more and more buy backs, so keep an eye on that. That’s a big trend in the market, and I think it only gets bigger next year.
Another big support to the market right now is actual cash coming in from retail people. You, me, everybody else out there; if you’re watching this, you’re a retail investor. And if you’re putting money in with your 401k, or you’re writing a check to Vanguard, putting money in; automatic money coming out of your check to go in the market, that’s showing up here.
You’re opening up a new brokerage account and funding with it money, that’s showing up as you buy new ETFs. This is a lot of money in the markets all the time. So beyond stock buybacks, which are separate, we’re also seeing retail investors continue to pour money in the market.
We all want to talk about how overvalued the market is and how lofty it is and how scared we are of investing in it, but more and more people continue to put money into it, and it’s going to continue to put a bid under the market and support it. So keep an eye on this. I mean, until this trend changes, I don’t see how we have a prolonged dip in the market.
So we have buybacks, we have retail investors continuing to funnel cash in. You can see bonds were a big one this year, but we’re going to continue to see more with bonds next year. And stocks. I mean, until you see that flip, where people are pulling money out of stocks … If they’re putting money in both stocks and bonds, they can both go up. So keep an eye on it.
And perhaps the biggest gun of them all, the fed balance sheet. So when you think about things that can support the market, the fed getting out there and putting their balance sheet to work by buying … They’re not buying stock, but they’re out there buying bonds like crazy when they need to. So you can see this big dip, here.
They topped out at about four and a half trillion dollars on their balance sheet, about a year and a half ago. 2018 is when it started to really dip. All the way back down, and then you can see recently, it’s made a big jump. So the fed is there. They’re saying, “You know what? We are willing to step in and buy, too, when needed.”
So now we’ve got billions and billions, almost a trillion dollars of buybacks in a year. We’ve got $100 billion or so of fresh ammunition and cash coming in the markets. We’ve got the fed on the sidelines. They want to sell, they want to get out of the market, but they’re also there ready to buy back if they need to. And they can buy whatever they want.
So you can say they were at four and a half trillion dollars, they took it all the way down about three and a half, to a little bit above that. But they cut about a trillion dollars off their balance sheet.
They’re buying a little bit back now. We’ll have to see if that trend continues. Now, if the market really wants to see them continue to build their balance sheet, I don’t know. I don’t think it’s a great way to do it. But they are there to support the market.
So you’ve got three legs here. You’ve got stock buybacks continue to increase, you’ve got retail investors continuing to put cash in, and you got the fed balance sheet continuing to expand when needed. That is a tough thing to bet against. So you’ve really got to have some bad economic conditions for that to go away.
All right. What are some things you really should be looking at, as far as economics? Well, how about let’s take an eye on corporate earnings. This is a big one. Corporate earnings are starting to get soft, and Q3, which is where we’re at right now, we’re expected to decline about 4%.
113 of the S&P companies pre-announced, “we’re going to be lowering our expectations on top of what we lowered already.” So we continue to see lower and lower expectations from companies. That’s not good.
You’ve got to keep an eye on earnings, here. We are looking at an earnings recession, here. Earnings recession – that means that we’re having earnings lower this year than last year. Maybe that gets you a little worried, like, “Hey, maybe the economy is not as strong as we thought it was. Maybe that’s a smoking gun out there, that earnings are decreasing when they should be increasing.”
Well, there’s a lot of reasons that could happen. One big note, here at the bottom is there’s 2.8% growth in top line revenue.
That’s a big one, actually. So think about the bottom line earnings maybe lowered a little bit, but the top line earnings are continuing to grow, sine not as fast as it used to, but they’re still growing. Until we see a top line contraction across the board, I don’t really think you worry too much about the earnings.
Because for one thing, we are comparing the earnings this year to last year. And last year, if you remember, we had a huge tax reform. So Trump put in tax reform and instantly boosted the earnings of all the companies. So every company suddenly had more cash on hand. Accounting rules made it that way. All their earnings look fantastic. So we had a really, really strong year last year, and now we’re trying to compare against that.
So I don’t think it’s actually a big deal that earnings are down 4% this year, because we’re comparing it to an aberration last year. That was a one-off event.
So to me, I think corporate earnings are still really strong. And when you look at America compared to other countries out there, we are doing fantastic. America looks great. I keep saying it is the best pig at the ball right now.
It’s the best place you could put money. You may not want to, but it is the best market and that’s what the whole world sees, also. So they want to put money into the US. American companies are still really strong. You would not see the same chart with European companies. Those earnings are not looking good.
Okay. Another thing that we need to take into consideration, especially towards the beginning of next year, is the threat of a Democratic President. Okay? The front runners of the Democratic Party right now are not business-friendly.
So I’m not here to talk politics. I don’t really care who’s president. Doesn’t matter to me. But the Democrats are definitely not looked at as favorably for business as Republicans. So the market is going to price at a discount, the more likely it is a Democrat comes into play.
And not only that, but some Democrats are more hostile to Wall Street than others. Just the way it is. So if you bring in a hostile President to Wall Street, Wall Street’s going to react with lower prices. They’re going to be taking profits off the table. They’re not going to be investing as much going into that presidency until they see the results of it.
So the market’s going to price in that event really soon. The more likely the Democrat President is, and which one, the more of a headwind you’re going to see in the market. So keep that in mind, especially next year, and especially towards summer of next year, as that election gets closer and closer.
So the market is going to price that into it. That makes a great trading opportunity for next year, coming up. Again with options, especially, it doesn’t matter which direction. We’re going to make money whether things go up or down.
All you have to do is have a direction and stick to it. There’s plenty of ways you can make money if things go down. In fact, you can make the most money when things go down, so that’s my favorite time to profit, actually, is when things decrease.
Another interesting one to me right now, is the pot stocks. So if you can see here, pot stocks were 50% higher just about a year ago.
That’s amazing. Look at that drop to where we are today. I really think that we’re near a bottom. So I know valuations are a little high. Even with a 50% haircut, things are high, but I think you’re going to see consolidation.
I think you’ll see these guys ramp. I mean, I think legislation across America and the whole world, really, is going to get better, and it’s going to become more conducive to pot. And these companies, I think will find a bid again. They’ve been really, really oversold. I think this is an ideal time to be looking at the pot stock market.
This is tracking the ticker symbol MJ, Mary Jane. Clever little ticker symbol, but it tracks some of the biggest pot-related companies out there. So in one trade, it’s an ETF that trades the pot stocks in general. So that’s what I like to trade a lot when I’m looking to trade in the pot sector. I want to trade MJ.
This is the where it’s at right now. I think it’s poised for a big move into the end of the year, and probably all through next year. We’ll see where it goes, but I think it could easily be 50% higher, or so, from here. So that’d be a move from about $20 to $30. Not making its all-time highs again, but just from $20 to $30 is a 50% move, so that would take us right back up there.
There are two kinds of traders out there on Wall Street. Right? I found there’s really two kinds of people there. You’ve got your Main Street traders, and Wall Street traders.
That’s how most people think of it, at least. But honestly, that’s not what it is.
Just because you’re watching this, you may not be a Wall Street trader. Don’t discount yourself because you’re a Main Street trader.
Wall Street wants you to think that you can’t use same the techniques they do, and you can’t profit the same way they do, because you’re on the other side of the wall, or you don’t have access to the same information. You know what?
We have seen such a radical change in the markets that you have actually got an edge over Wall Street in so many ways. I think that all of our traders at Raging Bull prove that if they’re profitable traders. And so many of them are making well over a million dollars a year, that should not be possible. But it is! It’s actually happening.
And that’s because there are inefficiencies in the market that Wall Street cannot capitalize on. By being a smaller trader and now having lower commissions, better access to data, better training, there are ways that you can be more nimble and you can move faster than bigger Wall Street firms. So being a smaller account, a smaller trader is actually an advantage if you know how to play it in your favor.
So I look at it not just Wall Street, Main Street; but an Alpha and Beta.
Alpha is the alpha dog. That’s the one that’s out there going to eat what he kills. He’s getting his meal no matter what. That’s what I want to teach everyone to be, is an alpha trader. Like, you’re out there eating what you kill, you know how to get what you want and you go after it and attack it.
And that’s what every single person can be doing and should be doing right now. No one’s out there looking out for your money. You’ve got to be out there taking the moves and make it happen. I’m here to help you do it. I’m going to show you everything that I’m doing so you can put it to work, too.
I don’t want you to be a beta. I don’t want you to be the guy out there that’s just waiting for someone else to feed them a stock tip 10% later or lead them into bad trades all time. I’m going to show you exactly what I’m doing and how I’m finding trades and how you can be doing it, too.
There’s two ways to describe alphas and betas, here. Alphas have a proven system. They profit when stocks are up or down. They work smart, not hard. I like to tell people I’m a lazy trader. They’re like, “Oh, what do you mean you’re a lazy trader? That sounds awful.”
You know what? You want to be lazy in the markets. You truly do. You want to make the most money with the least amount of effort possible, and an alpha trader will do that. An alpha trader doesn’t necessarily need to spend 10 hours a day pouring over research reports and charts. Once you define a system that works, you refine it and you stick to it and you stay disciplined, you truly become lazy in the process.
You’ve got to keep maintaining it, but you’ve already taken so much work and moved it in such an easy, digestible way to make your trading happen that a lot of traders only spend 30 minutes or maybe an hour a day, and they’re outperforming the market with just that.
So it doesn’t mean you need to be full-time. It doesn’t need to mean you’re at the screen all day long. Alpha traders have a system, and it’s repeatable. That’s the key. It’s a repeatable system that they can use over and over again.
A beta is not. He’s taking ideas from Chad, or the taxi driver, or someone at the supermarket. They’re addicted only to markets going up. They only buy stocks. They are buying long and hold, and that’s it. They’re never positioned for a downturn. That’s just the old school way of thinking. That is how you earn less than a market return. I don’t want that. That’s awful to me.
So Wall Street wants you to stay as a beta. That’s a given. They make their money by you staying a beta; so you just take their advice, you do what they say, you just keep shoveling money to them. They are totally happy to do that. I’m not.
It took me years to get my mindset out of doing that, into how I could become an alpha trader. That’s what my service is all about. Total Alpha is taking all the things I’ve learned over 20 years of trading and applying them in the options market. So everything I do is options-based, now. I love it.
I feel like I have a great control of risk. I understand my risk-reward and there are some huge upside potential that’ll be happening. I see big trades happen all the time. So I love being an alpha trader and that’s what I teach in Total Alpha.
Wall Street does not want that for you, though. They want you to keep feeding your money to them so they can manage it and tell you it’s all going to be okay, and you should be content with your 4% or 5% a year return on investments and they can justify their jobs.
You know what? They can not justify their jobs. There’s no reason that any of you need to be out there entrusting your money there, because you could be managing on your own much better because you care about it more than your broker does. I guarantee you.
Okay, I got to admit, I still have broker. I got a lot of money I don’t personally manage all the time. I’ve got a broker for connections more than anything. My broker gives me connections to people I need to meet.
When it strictly comes to managing my money, he doesn’t care. He wants to have as little risk as possible so I can make some money and be happy enough, but he’s making way too many fees and it’s a total joke, honestly. Okay? If I didn’t need him for other things, I wouldn’t have a broker manage any of my money. So I manage a lot of it. I continue to manage more and more.
I just encourage everyone to get to the place where you feel comfortable doing the same thing. Who’s really the beta trader? I think the Wall Street guys really are. Those are the ones that are sloppy. They have a routine that doesn’t necessarily work, but they would keep perpetuating it and try and get you to do it over and over and over and get you to stick with the story and keep doing it. I can’t do that.
That’s not for me at all. They want you to think there’s some magical mystery out there. Then have you ever noticed that they just totally will go silent when the markets are down? I do. I notice it all the time. They love to cheerlead when things are going good and tell you what a good job you’re doing and markets are up, blah blah, blah, dah, dah, dah, dah, dah, dah.
But when things go south, they’re not there for you. They don’t care. They just tell you to buy the dip. Well that can usually work for a while until buy the dip doesn’t work. But you’ve got to be prepared.
There’s so many strategies you could be putting into play that are outside the buy the dip and just add money to your account over and over again. That’s what total alpha is all about. I’m on a mission today. All right? Everyone, if you’re here, I’m on a mission.
Maybe you’re already in my service. Maybe you’re not. But I’m on a mission. I want to make 100 new alpha traders this year. We’ve got a few months left this year.
I want to make 100 brand new traders. It starts today. If you’re here right now, you could be one of these next 100. I’m going to open enrollment back up into Total Alpha for a very short window of time.
I want 100 new traders to join. Okay? We’re going to close it back down after that. I don’t open enrollment very often. If you’ve noticed, it’s been down for quite awhile. I’m going to open it right now until I have 100 new traders and we’re going to wrap it back up again.
I don’t want to work with a ton of people. This is my most exclusive service and I want my attention focused on the most dedicated, committed people out there. That’s 100 new people here.
I hope you’re one of those people. Total Alpha. Options can seem really complex. I get it. They are complex. I won’t lie. Options are complex, but there are so many ways to make them easy to understand and practical for everyone to use.
If you’re here, you are able to log onto a computer, you were able to show up today. You can trade options. All right? You’ve got a brain. You can do this. It’s not very complicated. I can show you what I took me 10 years or more to get through to get to where I am today. I can speed that up for you really quick. I look at guys like Jason Bond. He was coming on board as I was finally catching onto the market.
I was finally making things click. It took me 10 years. I taught him within a couple of years. He was really, really a good trader. Now Jason’s teaching people and they’re becoming really successful, multimillion dollar traders in a year or less. Now we even have guys that we’ve trained become trainers.
This is a chain that happens and the learning curve gets faster and faster. I can teach you how to become a successful trader in a shorter period of time than ever before because the education’s better, it’s faster, the skill sets are getting better and the strategies are getting more refined all the time.
Think about this one. When is the last time you made a 100% gain on anything? Okay. If you don’t trade options, you may have never made a 100% gain. If you only trade stocks, there’s a really good chance you’ve never made a 100% gain.
It happens to me all the time in the option market. I make 100% gains all the time, like on average more than once a week.
On average more than once a week I’ve been making 100% gain.
(Jeff looking at portfolio on side monitor) I’ve got a stock right now that is up 80%. I made the trade about two or three days ago. It’s actually betting on a stock going down.
At any given time, I’ve got options in my portfolio that are 100% or close to it or maybe well over 100. These kinds of things happen all the time and this is how you really build an account. I don’t take 100% losers, but I have trades that go well over 100% very often and the math just works. When you don’t have 100% losers and you have 100%, 200% plus winners, the math just works. You make money, your account builds over time.
I’m going to walk through some quick examples with you. I’m going to show you what I’m looking for in trades and what happened with them exactly. This one is CRON. It’s Kronos, one of those pot companies I was talking about. This was earlier in the year.
I look for these breakout lines to happen. This is a big thing that I use in my trading all the time is a breakout line. What I’m talking about there is a stock in a clear up trend. My charting, by the way, you can write this down. I’m looking at the 13 and the 30 hourly moving average. So the 13 and 30 hourly moving average, not daily, not minute, hourly moving average.
Those are my charts. As a swing trader, I find that gives me a good level of comfort. It’s a good support level of those hourly lines. So keep that in mind. After we’re done here, go test it out in your own. See how it works for you. Go look at some stocks. But this is CRON. It’s in a clear uptrend. I missed several opportunities to buy it on the uptrend. Now we never know where, but one thing I’ve found that works for me a lot is buying a previous high when it breaks out. So you see it topped around $15. It dipped. I don’t know where to buy the dip honestly. It’s hard.
But when I see it come back to that previous resistance and then break through it, that is the ideal time to buy for me. That’s what I want to see happen. On this one, I missed it. I missed this buyout here. I was not going to miss the second one though. I saw a new high. It consolidates. I wait for the next breakout to happen.
That netted me about $17,000 in two days. It’s not a very big move. Let’s look at that. This move right here, less than 10% but that netted me over 200% on the trade or $17,000 in two days. A 10% move on a stock would have been $100. A 200% move on the option was over $2,000 in profit in two days. Do the math. Options are superior in a lot of ways.It makes money betting on things going down, too.
This is one of my favorite patterns. It’s called the money pattern. When I see this, it is money. What I’m looking for, I get this question all the time, the 13 and 30 hourly moving averages again. I see an uptrend for two weeks or more and those two lines do not cross. Look. These two lines stay separated for over two weeks. When they cross, that is a great signal you’re about to see a trend reversal either from the bottom or the top.
So if a stock’s been going up for two weeks and you see a cross, well it’s likely topped out or it’s going to go lower. If it’s gone down for two weeks and you see a cross, it’s likely hit a bottom or it’s about to bounce higher.
So either one of those, it gives me an edge as an option trader. If I have a high conviction on which way a trade’s going to go, I can take a bet to make it happen. This one, I got a money pattern. It looks like it’s going to dip and sure enough, the cross does signal a dip happens. Make a quick trade.
That ends up being over 100% in six days. That netted me $21,000 on that trade. Okay.
These are all real money trades in my real money accounts here. These aren’t like paper trades made up. These are real money trades that everyone gets to see. In my account, you can always see every trade I’m making. There’s no smoke and mirror. There’s nothing you can’t see. In fact, now you can always see every trade I’m about to make. Here at my desk I’ve got my live streaming account. It shows you every trade I’m about to make so you can even see all the trades in my portfolio before they happen. You can see everything I’m doing as I’m doing it. You can see here clearly buying the puts on the stock was way better than trading the stock itself.
Look at this one, one of my favorite stocks, Five Below.
We’ll managed, great company, my kids love this thing. Awesome company. But awesome companies go down sometimes. Again, do you see the money pattern here? Do you see it rising for over two weeks? Yep. You see that, right? The you see the crossing pattern. That is a signal of a trend reversal probably about to happen or at least the stock hitting a wall. It’s not going higher. Either way, I can make money on that.
If it’s about to hit a wall, a good strategy is selling calls, so sell spreads, sell a call against that, collect premium. If it’s not going to go higher, all you need to do is find a stock not going higher and you can profit. Doesn’t matter if it goes lower. In this case, I decided to buy puts so I was betting it was going to go lower. Sure enough, it gets a small dip. It doesn’t crash, it doesn’t collapse. When I say money patterns show up, it doesn’t necessarily mean a stock is going to crash. It just means it’s likely to take a break in the future and that’s all I need. That’s all the edge I need in the market.
You can see right here, 175% on that small dip. That was a small dip actually. Only a 6% move in the stock. So again, $1,000 trade there. Make 60 bucks in profit if you traded the stock. On the option though, it netted me over $12,000 in just two days.
Shopify. One of my all time favorite retailing stocks. Again, clear uptrend.
This thing’s always on fire. It won’t take a break. So I look for an opportunity to buy it. When do I know? I don’t know when the dips, I don’t know how low the dip is going to be. What do I look for? I look for breakouts.
So again, we have this breakout again. We had a previous high at 315. Draw a simple line. Everyone, you can draw a line. You look for a previous high and then for a consolidation and then it breaks the new high again. That is a simple breakout.
And momentum stocks, that’s what you’re looking for, stocks in a clear up trend. How do you know if it’s an uptrend? Well, I look for the hourly lines moving higher and I look for the 200 hourly moving average.
That green line on my charts, that’s the 200 hourly moving average. Stocks that are trading above that line and the green line is sloped higher, that is a clear uptrend. That’s an easy way to find an up trend. So you’re not sure if it’s a bullish stock? Well, is it above the 200 hourly? And is the 200 hourly upward sloping like that? Then you’ve got a bull trend.
So on those stocks, I want to buy breakouts. They tend to break out higher and higher. I don’t know how high they go. All I’m looking for is a high probability short term trade. I don’t want to be in a trade long. I want to be short. I find a breakout above that 315. Boom, buy it. Look at that. It shoots up to 338. I don’t capture the whole move even.
That’s 300%. That’s a 300% move in three days on a short little move in the stock.
Options are where it’s at, guys. I’m telling you. I’m telling you. I’m telling you. It’s where it’s at. Again, clear uptrend. How do you know?
Well, you’ve got the simple moving average moving higher, the 200. You’ve got the hourly indicators moving up. You’ve got the stock trading above the 200 hourly. That’s an uptrend. That’s a bullish chart. I want to buy breakouts there.
Sure enough, Roku, another favorite stock of mine. It consolidates at 100. Actually in this case what I’m looking for here, I bought this stock in the low 90s. The reason why here, I’ve got the bullish pattern. It’s trading above the hourly, starts to break out higher. When it starts to break above the hourly, that’s a signal to me that we’re likely about to make a move up.
And stocks that trade in the $90 range, go look at how often they trade to $100 after that. Okay? It’s very unusual a stock gets to $94, $95 and then falls and never touches 100. I don’t know the odds, but they’re high. They almost always go to $100 at some point.
So as a buyer, I’m looking for an opportunity I can buy something in the 90s, sell it in the 100s. Simple enough. That is a quick, easy trick to use all the time. Same thing with stocks at $9. They tend to hit $10. Simple things like that. They work all time. So go back and look at that.
But here you go. Makes the move from 90. Makes the move to 100. Great.
The stock moves about 10% but the options move 300% or more in a short period of time. The options are always going to outperform the stock. Just the way it goes.
There’s more leverage and it gives you more potential to profit. So learn to trade the options side of things. It’s going to make more money if you hit the trend correctly in the right time. So look for short term opportunities where you have a slight edge. All you have to do is have a slight edge where you think the market’s going to go in a short period of time.
Here’s a great example. This is Alibaba from earlier in the year.
This one is a money pattern to the bottom. Can you see the money pattern here? Can you see the two hourly lines that don’t cross for over two weeks? Well, there it is. You see them cross and that’s my signal that it’s about time to make a move higher. This stock is really beat up. The market hates it. This is when market’s were really throwing away Chinese stocks. They just want to get rid of them. So of course stock’s going lower. I don’t know where the bottom is, but I know when to look for the money pattern and it shows up.
Then I get a slight bump up. I call that the fake out before the breakout. You get a slight bump and it retraces and that retracement is what I look for. The retracement now shows me a line that I can put a stop limit in. So if it goes against me, I have a stop to get out, but it gives me a high probability the stock is going to move higher.
In this case, it made a nice move higher right after I did it. 25.
Over $80,000 total on that trade in just a few days. Incredible. Over 400% on the last piece of the options that I ended up having. Overall, I’d say about 300% but still the stock made a 10% move. The options, once again, 300% you just can’t argue the numbers.
The options are always going to be superior. So learn to trade the option side of things more than the stock side. There’s more potential there. Just got to limit your risk and find situations where you have an edge.
Okay. All in all, $475 in profits if you trade the stock at $1,000 in positions. That’s pretty awesome. That’s really good. If you had $1,000 and took it to about $500, that’s a 50% gain almost. That’s very respectable. No one would be upset about that.
On the options, $28,000. Okay, so there’s the math. That’s why I do what I do. I’d rather try to make $28,000 than $500 for the same amount of capital. There it is.
I just picked out a few testimonies I want to show you. I got literally hundreds and hundreds of people that have been in the service that love it. I get testimonials all the time about how much they’re learning, how much it’s changed their life by learning to trade options in a new way.
A lot of people had a bad experience with options in the past. I did too. When I first got started, it took me like five years, it took me about 10 years to become really proficient. I had a ton of bad habits to break. I had to learn things. I didn’t have a teacher. I didn’t have anyone out there who was showing me their portfolio, who showed me how they’re trading, who was showing me what they’re doing and not doing.
I was at it on my own. It took me 10 years and a lot of misery to get to where I am. It doesn’t have to be that way for you. I’ve got the roadmap laid out. I know the steps. You can easily follow it and leapfrog so many years ahead like so many other people have done already.
Here’s some more Alphas out there. Social media too. I’m not a big guy on social media at all, but I do get shout outs here and there from people on social media. Love that.
But I just want to encourage you that look, this happens for everyday people all the time. We always think that oh, it can’t happen to me. That’s for someone else. They’re smarter than me. He’s got more money. He’s got more time. He’s whatever.
Put those excuses away. This is for you. Okay? This is absolutely you. If you made it here today, you managed to login. You are smart enough to do this. You can practically put these into play mainly because you don’t have to invent the roadmap. I already did.
I already know the rules. I already know how this works. It’s like learning to drive a car. Okay? Maybe the first time you drive a car, if you don’t have an instructor, it’s dangerous. You might drive in the ditch, you might crash into something. Well, it is a dangerous thing to do. But if you have a teacher there with you to show you what to do, driving a car is a very natural thing. You can learn really quickly.
Same thing with options. You can learn to do something very quickly if you have the right teacher with you. I want you to be the next Alpha. You could be. You can join with me.
Here’s what the total Alpha bundle looks like. It’s got the alerts. When I make a trade, you can see an alert happening. You can get my watch list of stocks I’m looking at every day. You get commentary before the market opens each day on what I think is going to happen in the market.
I put out great lessons all the time about how to trade, little tips, little techniques, little tricks that I’ve learned over the years that you can put into play. I share those every single day. It’s a great thing to wake up to, get that before the market opens. Got a great educational suite. I’m adding to it all the time. The value of this is almost $5,000 bucks when enrollment’s opened.
Usually you can’t even get in. This is an elite crowd. I don’t open this often. You can see my actual real time E-Trade portfolio streaming and see what’s going on at any moment. In fact, here it is right here. You see it?
I actually keep it running during the day all time on a laptop so it’s always streaming. You can see. You have access to it anytime you want during the day. You can see what I’m doing at any time during the day and also the orders coming up.
It’s not like I’m in there just typing orders all day and they get executed. I type orders in the morning and the afternoon a little bit. You can see what’s happening all the time even before it executes. So you can see my price and what I’m looking at even before I make a trade. That’s a pretty rare thing.
But of course, wait, there’s more. I’ve got two more special things today. You guys showed up here. It’s an afternoon. I know it’s a lot of your time. I’ve got two special things for you today. And by the way, we’re going to trade some stocks after this, so hang in there. I’ve got some stocks I’m going to talk to you about.
Today only, so not only am I opening enrollment back up, but if you join a lifetime with me, if you join lifetime in the service, I’m going to give you two special bonuses today.
The first thing is a $500 gift card that you can use on any upcoming Raging Bull service. And trust me, we’ve got some great things coming out at Christmas time. We’ve got a few products, some you don’t even know about yet.
They’re going to be fantastic and you’re going to want to get in those things and you’re going to take $500 off that coming into Christmas time, the lowest price of the year. You can also take $500 off on top of that. If you make a purchase today, you’re going to get that.
Also, you definitely want this one. You want to get a VIP pass to our Orlando event next year. It’s in February. It’s going to have all of our option traders there.
Everyone who trades. Myself, Kyle Dennis, Jason Bond, Nathan Bear, Davis Martin. Jeff Williams. The whole crew is going to be there. It’s going to be fantastic. You’re going to love the thing. I get so pumped up for these.
We’ll have a special speaker. We’re not going to announce who it is yet. Last time it was Terrell Owens. So you get to meet whoever the special speaker is, do a meet and greet, get photos.
Most importantly, get to meet like a thousand other members out there who are elite members, who are bettering themselves in the market, who are learning and becoming more educated and learn their strategies. That community is just awesome. I love getting to meet these people. It makes me a better trader. It fires me up. So you get special access to that event.
Those tickets, when we sell them, they’re over $1,000. But I’m going to give you one today if you buy a lifetime Total Alpha membership. I have to tell you, man, that is awesome. That’s one of my favorite times of the year. I really hope you take advantage of that. Get into that event.
There’s also going to be a guarantee on this one, a guarantee like never before. I’m not going to guarantee my performance. I’m going to guarantee your performance on this.
If you don’t see a 100% trade in your account on average over the next year, we’re going to give it to you for a year. If you buy lifetime, we’re going to revert it back to the annual price. But I guarantee it’s going to work for you. You’re going to see it happen.
With the patterns I show you and the system I reveal on how it works, I just don’t see how it can’t work for every single person. I’ve seen it work for hundreds and hundreds of people. I know it’s going to work for you. I’m going to guarantee that you’re going to see at least one triple digit winner every single month this year.
Here’s the Total Alpha package. Real quick. You get the alerts. No better education than just seeing when I’m trading and what I’m doing and why I’m doing it. There is no better education than that right there. That teaches you everything.
But I put on a daily watch list, great commentary, great tips and techniques that you can put to practice every single day. I spent a lot of time on this. This is my gift out there to my community. I spend a lot of time putting together that daily email so that you can get so much value out of it.
You can see the live portfolio anytime during the day. Your lunchtime, come look at the live portfolio. Come look at it anytime you want. It’s online all day long.
Access to education suite. You’re not sure about how to trade options. You’re not sure what spreads are. You’re not sure about certain terms or how to make trades like I do? Great. 24/7 video on-demand live sessions already recorded very similar to this. Live sessions I’ve recorded. You can go watch them anytime you want and that portfolio gets bigger and bigger.
Plus performance guarantee. Not mine. Your performance. We’re guaranteeing your performance on this. It’s going to work for you. You’re going to make this happen.
All this for just $1497. Okay. A full year of this for $1497. Put that into perspective for a moment. $1497. That’s peanuts!
Let’s be honest here. Think about how much money you waste on other stuff out there. Movies, Netflix, junk that won’t ever get you ahead in life. You probably spend more on that on a gym membership. I’m all for that gym membership. Be healthy. Make yourself better. But this is much more valuable.
We’re talking about life skills that you’re going to learn in the next year that you’re going to take with you for the rest of your life. No matter what, you’re going to apply what you learn in the next year to trading for the rest of your life. I guarantee it’s going to make you better.
There’s no way, no way my service does not make you a better trader in the next year. I’ve learned what 99.9% of traders need to know out there and it’s all served up for you.
No matter where you’re at right now, if it’s brand new trading, you are going to get incredibly better this year. If you’re already an options trader, you’ve been trading for quite a while, my ideas and my techniques, they’re going to ratchet it up for you. There’s no way that does not work.
Think about whatever you spent on college. I went to college like 20 years ago and I think back then a course used to cost me around $1400, $1500.
This entire program is $1500. So that philosophy of French Literature I took, I spent months of my life on it, $1500. That got me nowhere. I can’t tell you anything about it. Never advanced my future.
But you know what? I wish I had this package. If I spent $1500 right here, I would’ve been able to forget all that. I would have a life skill that I really would have put into play forever.
Everyone here, I’m telling you, if you’re here, this is for you. And I’m only taking 100. So if you’re here and you want to commit, I’m taking 100 traders. You’re going to be Alpha traders this year. Follow me, work with me. You’re going to become better at it. I guarantee it, man. It’s got to work for you.
All you have to do is put in a little hustle, do some homework, watch what I’m doing, learn from it and put it into play, man. You can totally do this. Everybody can do this. So step up. Be one of the first 100 people.
Let me get the chart set up real quick. I love trading. I love teaching. I love the community we’ve got. So it’s fantastic. I get fired up doing this. I’ve been doing it a long time, but I still get fired up in the morning.
Like I said, I get out there and bang out that morning email. I like to see where the markets are at, what’s happening. I’m sharing those ideas every day with you. Those are not for the general public. Those are only for my most elite members and I’m sending them to you every day.
All right. Here we are back at stock charts. Let’s go over some trades, all right? It’s been a little over an hour. I hope you guys got something out of that presentation. Those were some good predictions of where the market’s going to go.
But how about some predictions on where the market’s going to go today. Let’s see if there’s some ways we can make money today on something. All right. I’m not necessarily a day trader. In fact, I’m not a day trader. But the stocks are moving all the time.
Let’s look for some breakouts that could happen and let’s see if we can go through some stocks and I’ll share with you why I like or don’t like stocks. Then we’ll have to make some trades. So I’ll go through a list here.
One of the first ones here, IWM. I talked a little bit about breakout stocks earlier in the presentation. This is looking like a breakout stock.
I know it’s below the 200 hourly moving average. One thing about the 200 average is that it becomes a point of resistance a lot. Let’s update this now.
So it becomes a point of resistance. On the initial hit to the 200 hourly, I like to sell calls. I want to sell premium. So really quick if you’re new to options, there’s two option trades you can make. There are calls, which are our bet somethings going higher and there’s puts, a bet an option is going lower.
You can also sell or buy either one of those. You can buy a call or sell a put. You can buy a call, sell a call. Buy a put, sell a put. Either way. You can make money either way.
Like I said, the seller has the odds in their favor because they’ve got premium that they can collect. I’ll talk more about that later. It’s a little complicated, but if you’re selling options, you are more likely to win. You have a high percentage. The percentage you can win isn’t as big, but the percentage you will win, or the number of times you win, is higher.
So learn to sell options. The easiest way I tell people to do this is just learn to do spreads. Spreads are really easy to set up. I show you exactly how to do it and how I do it in my own portfolio all the time. I’ve probably got five or six different spreads set up. I’ll show them to you in my account here in just a moment. But you can see what actually a spread is and how you can take advantage of moves in the market like that.
When you see a point where there’s resistance … how do you know where resistance is? Well, the 200 hourly moving average is a good idea where resistance will be. That’s a good place to sell calls, on the first bump.
Now we’re hitting a second time. Now I’m starting to think it’s going to break through that resistance.
We’re hitting it, we’re grinding against the resistance. I think the next move is probably higher. I’m looking at ways here that I can sell puts or maybe start to buy calls upside. Selling puts would help me capture the premium on the downside.
So betting that it’s not going to go lower. But calls will give me a profit potential if it does move higher. That’s what I really like to see happen. So IWM is on my list. That’s one I definitely could be looking at buying calls or selling a put spread. We’ll come back to that one.
Now looking at Beyond Meat. This is one that I’m looking at selling puts on right now or buying calls the upside. The reason why, I know it’s in a downtrend but we’re about to see an hourly crossover. We’re seeing a very oversold condition.
There is a ton of shorts in this one stock. This stock has so many shorts. When it starts through reverse, there’s a lot of shorts that want to cover. That means there’s people who have bet against it who have sold the stock and they are forced essentially to buy it back, so they’re going to buy it back at a higher price and capture a profit.
A lot of short interests can give you a lot of support and make … When a stock moves, there’s a lot of buyers there. So I look for opportunities like Beyond Meat here. It’s a small move today. This could be the fake out before the breakout, like I just talked about. We’re seeing a low here. I think I would sell puts at that 120 level or look to buy calls out pretty soon. So that’s my other thing I could do. One thing I always look to do here is … let me go to tip ranks here.
Before I buy a stock or an option, I always want to know when the earnings coming out. One of my favorite sites to do that is tipranks.com. So I would go look at Beyond Meat. It shows me that November 4th is the earnings announcement for that. So I’ve got a few weeks before earnings.
I don’t like to hold options into earnings, they’re just too volatile. And if you don’t get the move right, you can lose a lot of money really quick. So, even if you do get the move right, you have to really be right. So, it’s really hard to make money in earnings.
So I want to be out of that before earnings. But, there’s a really good potential buying into that. So, that’s definitely high on my list. I might sell puts on that one today.
All right, this is on my short list. This one, nice, nice uptrend. So this one, I already have a put spread sold on. I’m looking to see if I want to buy calls on it though. It’s making a nice move up. I would probably buy calls on this one and to move back to around 130.
It’s been really strong, I do like the move. Around 130, I would be a big buyer here. So I like the trend up. It probably hits resistance around that 200 hourly moving average, like I talk about all the time. But if it breaks above that, it could really pop higher. So, that’s what I’m looking for.
In fact, let’s look at the accounts, see what looks like here.
All right. Pretty good day. I made about $11,000 while I was on camera. That’s good.
All right. What is working today? Something’s going up for me. Anyway, here’s the Disney spread. We see these things right here. See these two trades right here. I’ve got a put at 129 sold, and then I’ve got to put at 28 bought. So the same stock, the same expiration date, two different options. And you can make these in one single trade, so you can do that one trade.
What it’s doing is the 129 put is more expensive. It’s got more premium. So I want to sell that one and try to capture the premium. But if I sell it, I’m on the hook for a big loss if Disney goes much lower. So to limit my loss, what I do is I also at the same time, I buy a put at a lower strike price. So I sold the 129, this about a week ago. I sold that 129 right around here.
But then I buy the 128. So that limits my risk. So no matter what happens at Disney. I have a hundred contracts there. So one contract is a hundred shares of stock, a hundred contracts is 10,000 shares of stock I control. So that’s a big position.
If I sell that short at 129 and Disney drops to 119, it makes a $10 move lower. Well, $10 times 10,000 shares, it’s a lot of money. That is a $100,000 move I’d be responsible for. That’s not really the kind of risk I want. So while I might capture all that premium, I could walk into some times when I do take a big loss.
But if you do the spread, a spread’s a really simple trade. If you buy the put below the one you sold, you can still capture premium and you have a limited risk. So you can’t… Even if it drops to 119 or 100, wherever it drops to, you’ve got a fixed amount of risk you’ve got. So I like those kinds of trades.
And Disney, you can see the difference here. What you do is you look at the difference in the total gain and the total profit, from the total loss and profit. So when you’re selling and buying two contracts, you’re going to lose on one and hopefully you make more in the other one.
So in this case, I made $11,000 this week on this one contract at 129, and I lost $9,600 on the other one. So the difference there is the money that’s a credit to me right now. I could close this trade out, be done with it, and then I can capture that premium.
So that was a way for me to sell premium to someone else, capture the premium without having a lot of risk in the table. So I limit my risk. I have a small amount of premium I can collect, and all that has to happen is Disney trades above 129.
It’s been a nice uptrend. The reason I made the trade here is that we had a nice downtrend on a fantastic stock. Disney is a great stock, great company, had a downtrend and started to bottom out.
How do I know? Well, it made a low and then it retested the low without going lower. And the hourly lines flattened out. That is a great opportunity to have a bottom in place.
So that’s what I’m looking for. I’m looking to sell premium. I’m looking for places where it’s not going to go lower most likely. And Disney was a great example of that.
So sold the 129. It’s been creeping higher. The ones I sold look really good right now. Now I’m thinking about buying the calls. I really think Disney can make a $2 or $3 move higher here pretty soon, so I’m really inching this one.
Well, let’s look at Stone. This is the one that’s been my list for selling puts on recently. I like the stock a lot. It’s a really high growth Brazilian finance company. You can see this chart is hanging right around the 200 hourly, and the indicator is just clinging to it here. It’s just moving right in, holding it nicely. I love that pattern.
So that’s one I would like to sell puts on betting that it’s not going to go lower. So for this one, I think 33 would be a little aggressive. Selling at 32 puts. That’s a pretty nice trade to me. So, I’m going to look at that one. That’s a definite possibility. I’ll make a note on that one.
This is WYNN. My favorite casino, one of my favorite stocks. Love trading this one. This one’s gotten a little too extended to the upside. So I’m thinking that this might be a great opportunity to sell calls on this one. Or I would buy puts if I got the actual hourly indicator.
So I think it’s a little bit early to buy the puts on it. Because when I make an option trade by buying calls or puts, I need to be right in a short amount of time. I don’t have the luxury of waiting a long time like a stock.
So stock you can be in for a long time and you’re not losing, I mean the stock itself can lose money, but with options you’ve got time value and you’ve got volatility premium that are consistently falling. And as a buyer of an option that’s costing you money every day, you hold a stock option.
So if a stock doesn’t move in your favor, it’s costing you money to hold that every day. That’s why it’s better to be a seller in general. But if you’re correct about the move and the timing, buying the options makes the most sense.
So in this case, I would love to see an hourly indicator show up right here where the cross would happen. We’re probably two or three days from that happening, so it’s on my watch list, but I think it’s a little bit early here, but when that happens, I’ll be looking to make a bearish bet. I’ll be looking to buy puts on that one.
For now I think it’s probably a good spot to sell calls against. We have the RSIs at a very overbought level. RSI kind of shows that it’s moved up too much, too fast. So it’s not likely to move much higher.
Those are the kind of odds I look for on selling calls. I’m selling premiums to somebody. So I might look at selling the 115 or 116 calls on that. We’ll take a look.
But I’m going to wait like two or three days for that crossover to happen and that’s when I look to by puts on it, on the downside. But it’s too early for me right now.
Let’s see what else we’ve got here on the list. Oh, you know what? One that I do want to trade is UVXY. This one is volatility basically. So it trades off of VIX. Look at this real quick. This is the volatility index. This is basically the fear gauge for people.
This shows you how much fear is in the market at any given time and essentially is how much do people want to buy puts on the S&P 500. People only want to buy puts when they think the markets are going to fall.
So if people have no fear of the market falling, they do not buy puts, the price of puts plummets, the VIX plummets. That’s essentially how it works. On this, we’re seeing the VIX at a really low support level. So 13s I’ve been historically, it’s been a really low support level. UVXY doesn’t follow that exactly, but it comes close.
So UVXY and VIX will double bottom out around the same time.
I also want to point out VVIX. This is something that most people don’t even know about, but it’s the volatility of volatility.
It’s kind of a strange concept, but it’s showing you the degree of movement in volatility. It’s kind of how much people are worried about volatility moving. If you want to think about it like that.
This also shows me that VVIX is at a really low level historically, and it can make a sharp move higher anytime. I think the markets are poised for bad news at anytime right now more than they are for an upside. So it makes sense to look at selling puts on UVXY or maybe even buying calls. Maybe.
I think it makes a lot of sense right here to be looking to sell puts on UVXY around $22 for this week or next week.
So that’s definitely a trade I’m going to make. In fact, let’s make that trade right now. I know I’m going to make that one. So this is my E-Trade account. You can see the live streaming version of this all day as a total alpha member.
But what I’ll do, I go to options, trading options, of course. I type in the ticker symbol. UVXY. I’m looking to do a put spread. So I’m looking to sell a put spread.
Okay, now it’s going to give me the expiration date for this week at the $22 price level. But it’s something I’m going to buy to open. So on a spread, you can either buy or sell it. Either way. I like to sell spreads to someone else and try to collect premium. I’m essentially hoping that spread goes to zero and I’ll be able to collect whatever money they pay me for it. As a seller, that’s what you can do. So that’s what I’m looking for. So I’m going to look to sell to open the higher strike price and buy the lower one. So I’ll look at the 21s.
Okay, so for this, I’ll explain this real quick. So for this week, for around 37 cents, I have a $1 spread on UVXY. That means that UVXY stays above $22 I get to collect the whole 37 cents per contract and I keep all of it.
If UVXY goes to $22 and then subtract 37 cents from there. If it goes to that price, then so $21.63, If it goes to $21.63 I break even and anything below that I lose down to $21. So UVXY could collapse to $10 and I have a fixed amount I could lose because I can only go to 21, is my low point there.
So the one that I buy is the one that is my insurance and that’s my risk. That’s the one that I cannot go below.
So it’s easy to think there’s a $1 spread, you know that because there’s a $22 put and a $21 put. So the difference there is $1, it’s a $1 spread. And then if I collect 37 cents, there is 63 cents of downside.
So that’s about two to one. I collect one, I could lose double that, but the odds of it going higher, it’s already in my favor.
So I like the bet. So I’m going to take this one, I’m going to sell, I usually sell a hundred contracts at a time. It’s my risk tolerance. So for me, you can tell the trades moving a little bit here, but you select if you want market, that’ll give you not the best price in the world. I always like to do a credit. A net credit. That’s how much money I’m going to collect right now if I sell this to somebody else.
So that also sets a limit. So it means it’s not going to get filled unless they can sell a spread for 37 cents. So I will take that 37 cent spread and then you select “Good For Day” or however long you want it to be in place. But I’ll take mine for the day. So right now the low was about 34. The high is 38. Mid is 36. So 37 is kind of right in the range where I want to be.
I want to be a little bit above the mid but below the ask. So that’s typically where I set my options at. So right there, 37 that’s right in place. Place the order. Bingo. We’ll go back and see if that fills later.
There’s one trade I definitely want to be in. I easily could see buying calls on UVXY also. I don’t think it goes down much lower from here at all. I think it’s got a lot of upside potential. I mean you can see the range it’s had recently.
They can move up quite a bit, so there’s a lot of range for this one. It easily can move up, but you’ve got to be right on timing and UVXY you just never really know the timing and when it moves up and you’re losing money every day as the option buyer. So I’ve had a lot of experience with UVXY, it’s tricky.
When I say make a little move higher, I’ll try to buy calls. The best strategy for me is selling calls all the time. So I wait for a little rise in UVXY, if I get three days in a row I’m absolutely selling calls on it. Out of the money a week or two out. And I’ll do that over and over and over.
That trade almost always works. I capture premium, I’m limiting my risk. If it blows up, I’ve got a fixed amount of risk I can lose, and I’ll just do the next week. And UVXY will not stay up for many weeks in a row. It naturally decays over time, so you naturally will win if you keep selling calls over and over on it, again.
I don’t really want to sell calls at this level but when it gets higher I will definitely be a call seller, but right now I’m going to sell puts on instead.
I hope it makes sense. This is one of those things you can go back and listen to it later. Just kind of have to digest sometimes. You have to listen to it a few times, get the handle on it, kind of walk through what I just did, listen to what I was talking about with selling puts and calls and all that stuff.
It doesn’t make sense at first. I mean if you’ve taken a foreign language, it didn’t make sense the first time, but if you digest it a few times, you think about it, you go over it, it makes sense.
I do these kind of trades all the time. I show you exactly how to do it and how you can put it into play. So it makes it really easy for you. But just to do it a few times and paper trade man, always paper trade first.
If you’ve never traded options or if you’ve never traded spreads, just paper trade. Ameritrade’s got a fantastic option trading platform for paper money. So you can make the trades, you can copy every trade I do if you want to or make your own trades, and not risk any of your own money.
That’s the best way to go about it. Make these trades with no money risk and see what happens. You can’t lose, you can’t make money either, but you can see what happens. Get comfortable with it, and once you’re comfortable with it, start putting into play.
Do small amounts. See if a small amount works for you. If you could replicate it the same way you did with paper money, great. If once it’s bigger and bigger, you become more and more confident then you can take bigger and bigger positions.
So that’s how I always suggest people get started trading. First study. Do paper trading for a while. Once you consistently make money paper trading, then trade your own real money and you’ll find yourself so far ahead of the game because you’ve already learned some mistakes paper trading, you’ve been treating it like real money, and then you take the step.
Once you are successful in that, then you’d take the steps where you start trading a small amount. I’m talking maybe one contract at a time. A small amount where you can’t lose very much money because you’ll treat that like real money.
You’ll treat that absolutely like real money because it is real money. So there’s a big difference between paper and real money and when you actually have some skin in the game, you will treat it like real money. So always do that.
Got a lot of questions piling up. So I’ll do some of those here for next few minutes before I get back some trades.
All right. Rhonda says, “I’ve never done this. No idea, but I’m interested.” I hope so. Rhonda, this is very interesting stuff. This changed my life. It’s changed lives for tons and tons of people who are learning to do the same thing and you can do it too.
Like I said, the fact that you’re able to log on today and do this and show up here means that you can do this. You’ve got a brain, you’re not dumb. There’s certain things that you can put into play and start doing it. So you can do this.
You start with paper trading, go through education, start learning the process, learning the terms, and you will be amazed at how quickly you will grasp it.
I’ve already taken out all the roadblocks, I’ve taken out all the stuff that doesn’t matter. You can go online right now and you can go to an Investopedia. You can go to some website out there that has a hundred hours of education on what options are. If that’s your thing, go do that.
But you know what? I filtered it down to the most important things about options and what actually matters the most. And you can learn those in a matter of hours. I’ve filtered down to what’s most important so you can put it into play right away, and that’s what needs to happen.
So I take all the fluff, all the noise out, and give you exactly what is most important so you can get up to speed really quick. That’s my whole goal.
I’m glad you’re interested. It is really interesting. I think you’ll love it once you get into it. I find that women are really great traders, honestly, because they seem to be more disciplined. They like to follow rules and they stick to the rules.
And as a trader you’ve got to do that. So I really encourage you to take the step and make that happen.
Joe says, “Are you worried about beyond meets earnings coming up?” Yeah, so like you said, I saw the earnings date coming up and before I make an option trade, I always know the earnings date. I don’t want to walk into something where earnings are happening tomorrow and I didn’t know about it, and then I get stuck in a trade I didn’t intend to have that risk on.
So I always want to know when the earnings dates are and I might buy options past that date, but I’m not going to hold them to the earnings date.
You understand what I mean? So maybe the earnings date is November 1st, I might buy options that expire on November 7th for example. But I’m going to be out of those option contracts before November 1st. Before the earnings date, I’ll be out of the contracts because I don’t want to hold them through there.
So I feel there’s too much risk by holding, the volatility gets so big going into earning events and you just don’t need that as a trader. I like to trade them after the earning events, the volatility compresses option prices get much lower after that, and then I like to make my trade. I don’t want to trade going into earnings.
Dana says, “What’s the difference between buying and selling a put?” There’s two sides to every coin. There’s always a buyer and seller. The difference with a stock is you can use the selling stocks, your buying stock and selling it. On every side of that trade there was a buyer and a seller too.
When you bought the stock, you bought it from somebody who sold it to you. So you bought a share of Apple. Well, someone sold you that share of Apple, so he gave you that share. You gave him his money. There was a transaction.
Same with the option. The thing with options though is that you don’t have to own the option to be able to sell it to somebody else. It’s weird. You can just create it out of thin air. You make a new contract happen and you sell it to somebody.
So in that Disney contract, for example, where I sold the 129 puts, I basically pulled out of thin air a 129 put. I sold that to somebody. I took their money. At the same time I bought a 128 put under it to protect myself.
I bought that from somebody. Now maybe somebody already owned that 128 or maybe they created it out of thin air and I bought it from them. But by selling it, you’re selling someone else that same options.
So someone had to buy it from me. So they bought it. I collect their money, and then I took another trade against that. So that’s how the buying and selling works. With options, you can always be the buyer or the seller of contracts at anytime.
So that’s something I talk about all the time. There’s always ways you want to be sellers. There’s ways you want to be buyers.
In the market it’s really important to understand your odds. And right away selling options has the best odds. It just works out best. The percentage of winning is already in your favor, and options are structured so the seller can win.
So it’s much like an insurance company. An insurance company would never sell you insurance if the insurance policy was in your favor. Geico would never sell you an auto insurance policy if the odds of them paying money out was higher than the amount they’re collecting from you.
That’s why you don’t get a $1 policy if they have to pay a $25,000 claim. They know what the odds are of you’re getting in a wreck and they price that accordingly and then they make profit on it. So the profit they make is what makes that in their favor. Same thing with options.
Options are priced in favor of the seller. So as a buyer of options, you are buying insurance or buying the right to collect something from somebody else. And so for them to sell it to you, they have to sell it to you at a premium. That’s their profit. And when you sell it, you get to collect that profit.
Now it doesn’t always work. So Geico sells insurance policies and then you paid $50 a month. Well you got in a wreck all of a sudden and that to pay out $25,000. Okay, that happens. That’ll happen at Geico sometimes. They’ll pay out $25,000 even though they only collected $50 from me that month. That happens.
But you know what? Well, first of all, they raise that $50 to $100 a month after that, right? And then you’re going to pay the $100 a month the rest of your life. So they’re going to make more money off you eventually.
But they also know in general, people don’t get in accidents. Most people don’t get in an accident of this month. You probably will not get in an accident this month. Your house probably will not burn down, even though you’ve got insurance that will reimburse you if it happens.
A hurricane will probably not hit your house, even though you got hurricane insurance. The reason you bought that is because the risk is too big for you. But the insurance company is making a fortune off of that because every month that you pay $50 a month and don’t get in a car wreck, they’re collecting that premium and putting it right in their pocket. They collect it and put it away.
That is exactly what an option seller is looking to do. And that’s what I teach people how to do all the time is how to become a seller more than a buyer. Now, there’s definitely times that you want to be a buyer. When I showed this money patterns setting up, those are definitely times you want to be a buyer.
I think the options are in your favorite to buy in those times, and I’ve proven it because you can see those huge gains I make. Those are from buying options. Those ones where you can make 100%, 200%, 500%, well those happen when you buy options, not sell them.
So always keep that in mind. But I don’t always want to be an option buyer. I net want to be an option seller and occasionally be an option buyer. So I always teach you how to do the two things.
“What gap do you use for a stop loss?” It depends on the trade. For spread trades, I might have my stop loss be the maximum loss I could take. So in that trade I just made on UVXY, I collected $3,700 right now when I sold it.
But I could lose up to $6,300 if it goes against me. So depending on how the rest of this week goes, I might just let that trade go and I might leave the maximum loss as a potential. So it might happen, but then I’m leaving myself also, I might collect the maximum amount, which is the $3,700.
It also depends how aggressive I am in a trade. So for me, I’m selling spreads, personally, I’m looking to sell about $3,000 or $4,000 per trade I make. So that’s the amount of money I want to make on the trade.
So if I’m more aggressive and maybe I sell $8,000 or $10,000 a premium, well I might not hold out for the whole thing on that. I might want to take that off the table quicker and just take some of the profit right away. So if I’m up, I might take that profit quick.
You can also close this out easily. People don’t understand that you don’t have to hold a contract to the very end, even though you may have sold it or bought it. You can exit anytime.
So anytime you get a profit, you can take it off the table. Anytime you get a loss that you feel is the most you want to take, you can just take that loss, be done with it. You don’t have to hold for a maximum loss. You can always get out early.
Same with spreads. So I might have a maximum amount I want to make, but if I start taking a loss, I might just take it off the table. So I did that today with an option actually.
My spread was going against me and I was losing a little bit compared to where I sold it from, so I decided to close it out instead of holding and maybe having a maximum loss happen, I decided to close it out early. So you can do that anytime you want.
Typically on spreads, I just like to let him go all the way to expiration. If it comes the day of expiration, the day before and it’s really close to my strike price, I’ll usually just close it out.
So at that point I’m usually really close to being even on the trade, I just take it off the table at that point. I feel to me it’s not worth holding in that final day. That’s really a coin flip and I don’t need the risk so I’ll take that off and maybe do it the next week instead.
We’ve got a question about position sizing. When it comes to position sizes, it really depends on your account size. So I can’t tell anyone what they should use as their account size or your position size. But for me personally, I typically don’t want to have more than 5% in any single trade at any given time.
So 5% of my portfolio in one trade, anytime. That’s about enough risk for me. Now I’m trading with a larger portfolio and I don’t want to lose more than 5%, so if I lose 100% of a trade, I don’t want that to cost me more than 5% of my portfolio at any given time. That’s kind of just a rule of thumb for me personally.
For you, it might be higher. You might be willing to put 10% of a trade at one time, or if you’re trading with a really small account, maybe it’s $2,000 or 5,000, more like that. Maybe you trade all of it on a trade. I don’t know.
Maybe you trade in thirds. Maybe you put 33% in a trade. I can’t tell you. It’s going to be a different risk profile for everyone, and you’ll have to decide what you’re comfortable with and what you’re willing to risk. For me, it’s always what’s the amount that I’m going to be able to sleep okay?
This is what I’ve learned a lot over the years is… Will I be able to sleep on this one? Of course, I like the trade. I wouldn’t have made the trade if I didn’t like it, but how confident I am in that.
Sometimes I get too confident and I’m like, “I really like this trade. I’m really into it”.
But I’m too into it. So I get too excited about it. I need to scale back on it some.
So with position sizing, I feel like I didn’t want to state about 5% for me, but if I can’t sleep on it, then that’s when I want to scale down. I want to get a smaller position size. If I’m not sleeping well on it, it’s too big for me.
That was a great way to look at it. It’s too big for me if I can’t sleep well on it. So for you, you’ll have to decide. Maybe you don’t want to lose more than $500 in a trade. That could be it. So if that’s your risk, think about how you’re going to protect and have only $500 at risk on it.
I have people talking about the package here. I just want to come back to it one more time because honestly this will not last long. I know we had a lot of buyers already just this afternoon. Once I put this out in the public, these hundred seats are going to go quick.
You’re getting the first take on this right now because, first of all, you committed to be here. I know you’re serious. I don’t want people who aren’t serious really. I don’t want people who have a lot of repeated questions they are just are lazy about and don’t do anything on their own. I know that you’re here to learn.
If that’s the case, this is the best program for you. Hands down. This is the best place you can learn. So I want you to make the move. These hundred seats are going to go quick once I put them out to the public. But they’re yours first.
So if you’re here, you take advantage of it. You make it happen. You make the move right now. Come work with me, man. You will not regret this.
I mean, it’s $1,500. I know, it sounds like a lot. I was in a spot where $1,500 was an enormous amount of money at one time, but you know what? I lost so much more than that trying figure things out on my own.
Honest to God, I wished I had this program 20 years ago when I first started trading. 10 years ago when I really got serious about things, I wish this program was there. It would have elevated my game so much quicker.
Things that I have learned trading that I can first of all tell you what to do and tell you what not to do. Most importantly, there’s a lot of things you do not want to do. Like how you manage risk, how you know when to get in and out of trades.
And the more you go back and look at those examples over and over again, the more you see it makes sense. The more you digest it, it becomes second nature to you. So a lot of these things, they sound foreign at first. Sounds complicated.
It’s like learning that foreign language. It’s like that first day of Spanish class maybe. I get it. I was in that class too. I never got good at Spanish, but I never applied myself either. I never had a great teacher.
I am a great teacher. I will teach you everything that I know about option trading and give you the opportunity to take advantage of it and put it to use for yourself. That’s the most important thing. It’s that you can take the knowledge that I’ve gained and put it to work in your own account, put it to work, learn it, and it’ll last a lifetime.
So maybe we just work together for a year. You are going to get an enormous amount of value out of it. You’re going to love it. It’s going to change your trading of the rest of your life. You’re going to love taking this and putting into practice day after day, learning to make your own trades. Learning to be an alpha trader.
That’s really what it comes down to is that if you can become an alpha, go out there and eat what you kill. Go out and seek the trades you want and take them down when you’re ready to do it. That’s when you’re an alpha trader and that’s exactly what I’m teaching people to do all the time, is take control of the markets.
Take control of their own trading and their own portfolios. Learn to do it like you’ve never done before and become an alpha, and this is the program that’s going to teach you to do that.
All right. We’ll look at some more questions really quick here. Chad says, “How do you scan for your trade?” That’s a really good question I get all the time.
One thing I’ve found over the years, for me at least, is that I cannot scan the market and make trades and be profitable. Okay. I can’t just find a new stock every day in my scans, make the trade and it works. I’ve got to follow stocks for quite a while. I kind of stalk them.
I’m like a lion out there stalking that gazelle, waiting for it to be injured or waiting for an opportune time to jump, but I can’t just run out there and look around and say, “I want to pick something off then eat it.” I have to find these trades and I stalk them for awhile and then I finally pounce on it when I’m ready. Okay? That’s being an alpha trader.
So, what I do is I start making a list of things. I’ll start making a list of stocks that I like, that are in bullish trends or bearish trends. I’m looking for both. So every day in my watch list, I’m sending out stocks that I think have a good opportunity to go lower and stocks that I think can go higher.
Those are my ones I’m looking to sell calls or puts on. So, I’m building this list and then I’m following it. I’m kind of watching it, I’m nurturing it and when the time comes I think it’s right, then I pounce on it, make the trade.
So, I’m not scanning for trades all the time. I’m always reading things. I’m always taking new information to find new stock ideas perhaps. I’ve got probably 200 stocks that I trade on a regular basis. So, when I see ideal set ups or close to it, I put them back on my list and I started watching them.
So, that’s really how I do it. I don’t scan the market every day looking for trades. I kind of wait for them to come to me, but I’m out there watching already.
Man, so many guys joining today. I want to just thank you first of all. Okay. I love working with all my members. I thank you so much for joining. I know it’s a big commitment on your part and trust me, I give you the best I can every day.
I want you to become successful and I commit to work with you and give you the best education out there, show you the best trades I can make, show you what it’s like to actually be in the market, good days and bad days and how I juggle it. Hopefully, you become a better trader out of it. So, thank you for stepping up and choosing to work with me. I don’t take it lightly and I promise to work the hardest I can for you on it.
Mark’s saying he uses Fibonacci hourly crossover as well. Yeah. Fibonacci works really good. I use Fibonaccis quite a bit in my own training, and I do share that too. So, Fibonacci always has a place out there in the world.
What you’ll find though is when you line up Fibonacci retracements on top of the hourly indicators, you’ll find that the hourly crossover kind of coincides with the Fibonaccis quite often. So, the two kind of naturally work together.
The Fibonaccis are just a natural progression from nature that … I forget who found it out, but he kind of found out this natural ratio over time, the golden ratio. It just happens. It happen to stocks too.
So, it happens in all forms of nature. So, you’ll see this ratio happen and those become great support and resistance levels. So, I totally agree with Fibonacci. I use it all time, but it just translates naturally into the hourly indicators. You’ll see that.
Chris says, “how many trades a week on average do I make?”
I probably make about five to eight trades a week. So, it’s rare that I don’t make a trade in the day. Sometimes I’ll make a few. Sometimes I’ll go a week where I don’t buy any options.
So, sometimes the market’s in a place where I just don’t see any good setups where I think I’ve got an edge where it’s going to move quickly. So if that happens, I won’t be buying any options, but I’m almost always selling options. So, I can almost always find a spot where I think I want to sell options. Okay?
Number one, like I said earlier, selling options puts the odds in your favor of winning, so I want to take shots a lot. When it comes to buying options, I want to be very selective. Going to be really careful when I make opportunities like that. So, I’m not an option buyer often.
So, I might only have two or three option buys per week, sometimes zero, sometimes five, but overall, I’m probably making five to eight trades per week. My horizon is about two weeks or less. So if I’m selling options, for example, I’m typically selling two weeks or less and I want to hold the expiration if possible. I’ll get out early if something … if it moves in my favor really quick or if it moves against me really quick, I’ll take it off early because I can avoid taking a maximum loss if I get out of the trade early. So, you’ll see me do that too if it goes against me really quick.
The UVXY trade, someone is asking about. This will be recorded so you can go back and look at that recording later today or tonight I might put up online. I think it’s a great example of looking at the chart and then looking at how to set up the actual spread trade there. So, I think that’s a really good example. You can go do that anytime.
All right. “In your live account, can you show the detail, the put vertical?”
Yeah, I can go back and look at that really quick if you like. I’m just about to wrap this up though. So, one more time. I just wanted to say if you’re here and you’re not a member of Total Alpha, you need to be. You need to be taking advantage of this. This is the program that’s going to make you a better trader.
It’s going to teach you the best techniques that I’ve learned over the years that have helped me become successful, to become consistently profitable. Watch me do this. Learn what I’m doing all the time. I’m going to teach you everything and you’re going to love it. So, take advantage of this right now.
You guys are getting first dibs on these 100 seats. We’re going to close it out probably in a day, maybe two days, but it will be done, and then we’ll be done for the year. I don’t think I’ll open this up again for the rest of the year, so get in while you can.
It’s going to be an exciting few months. November and December are great trading months of the year. They’re my favorite months of the year. The markets typically go up, so I’ve got a natural advantage by knowing those months typically go higher. So, you’re going to want to be with me as I’m making a lot of trades those months. So, watch how it goes. Get in right now. If you wait too long, those 100 seats probably will not be there.
Once we release that to the general public, they’re going to start going really quick. I’m giving you the first option to take advantage of it right now. So, get the guarantees too. Get that $500 gift card. You can use that for anything in the future for 500 bucks.
Take advantage of it and that VIP pass, man, come meet me in person. Come meet Jason Bond. Come meet Kyle Dennis. You’re going to have a fantastic time at the live meetup. Those tickets, they’re expensive, so get one for free when you buy lifetime right now. I want to also say that ticket, those things sell out first of all.
So, you’re guaranteed to get one right now if you buy lifetime, I’ve set aside enough where you can guarantee that, but there’s only a limited number of seats at the event. So, we just can’t make more. They’re going to sell out. You can guarantee you’re going to get one right now, so get your hands on it. That ticket’s worth 1,000 bucks, the $500 gift card, and then you get the full year pack.
I mean, it’s a really awesome deal. I’m not pulling leg. This is fantastic. You’ve got to take advantage of it. It’s not going to be here very long, so get to it, take advantage of it. I’ll take a few more questions and then we’ll wrap this up for the day.
All right. So, let me pull this back up. So, I want to look at my accounts and go to the portfolio. We’ll look at the account detail. All right.
So, we’re talking about the UVXY position. So, what happened there? We got filled on that 22 put.
So, what that means is I sold that to somebody. It shows the price paid over here. So, this first one is the $22 put. That means I sold this one to somebody for 52 cents. Why did I do that? It means I want to collect that 52 cents. I want to put that 52 cents in my own pocket.
It means I don’t think that UVXY is going to go below. It’s not going to close below 22 on Friday this week. There’s only two days to expiration, so it’s a very short trade. I think UVXY will probably bounce higher from here or at least stay stable. I don’t think it’s going much lower. So, that’s my thesis on it.
So by doing that, I’m able to capture that premium for somebody else, but to protect my risk just in case UVXY goes down $5 or more, I protect myself by also buying this put. This is the $21 put. By buying that $21 put, I protect myself from a major loss that could happen.
It probably won’t, but it could. You never expect things to happen, but you do get a car wreck sometimes or the house does burn down or something bad happens. It’s nice to have that insurance there to protect the catastrophe. So, I paid 15 cents to buy that insurance from someone else.
So, what happens here now is the net difference between the 52 cents that I sold and the 15 cents that I bought is 37 cents, right? That’s what I collected. So, that’s the net credit to me. So, now I’ve got a fixed amount I can risk my loss, which would be … we decided that was 63 cents.
So, that means I could lose $6,300 absolute worst case scenario. Worst case, I had to lose 6,300 bucks, probably not. I’ll probably close out early if it happens. I won’t take a maximum loss. If anything, 6,300 maximum loss. Maximum win $3,700. So on Friday afternoon, I could collect that whole $3,700 in my pocket. That can be done. It’s expired. It’s done at that point. I do it again next week.
So, when UVXY comes down to low levels like this, I want to be in a position where I am selling these puts all the time because it eventually works. I might lose this week. Okay? There’s only two days. I might lose this week, but I’ll do it again next week, and I’ll do it the week after that. I’ll do the week after.
I’m not going to lose forever. I’m going to make this trade work over time. It’s going to go in my favor. So, it’s just a timing thing. How long do you stick with it? This trade might work today, it might not, but over time, this trade works, so I want to stick with it.
Go back and look at making one more trade today before we go. I was also looking at match. Yeah, this one is really close for me. I mean, I like this trade a lot. I love the company. I don’t use their products, but I do love the company.
They’re a great user base. It’s bumping up against that 200 hourly resistance. We talked about this several times. That 200 hourly resistance is pretty strong, but when it gives out, you can make some quick move through it. So, I really like the stock right here. It’s holding above the hourly, it’s all converging right here.
I’m really closing this one, so I must circle that one. I might make a buy on that one right now.
That one, I’d flat out buy calls. At this point, it’s hit resistance enough times I don’t want to sell calls at this point. I could sell puts. So, if I don’t think it’s going to go below 72 for example, I could sell the 72 put spread and try to collect premium, but I think this one’s got enough potential that if the market has any kind of legs, it goes up.
Match really can make a move higher. So, I’m in.
W’s on my list. This one, same kind of trend we just looked at with Disney earlier. We’ve got a nice decline.
It bottoms out and then it starts trading above the hourly indicators slowly as it reverses. I love that trend. This is probably one I’m more likely to sell puts on though. So on this one, what I’d do is I’d probably go look those 105 puts, go find that earnings date, make sure earnings aren’t too soon and sell the puts at 105 and try to collect premium. Betting it’s going to keep trending higher. I don’t know this one makes a big move anytime soon, so I’m not too sold on buying calls, but I do like the idea of selling puts right here. So, I’ll come back to that one.
Booking Holdings – this one has actually got away from me too fast. It was a nice bottom. It’s still really bullish. So, it’s trading above the hourly lines. It’s looking good.
It’s just a little too extended for me right now. I want to wait until it pulls back. If it comes back to the 200 hourly, I probably would buy calls this one again, but this one’s out of range for me at the moment. So, I’m going to take it off the list.
FANG, I like this one a lot. This is one of my favorite oil sector stocks. So, when I think oil is making a move higher, FANG is a go to. I like the downtrend. I like how it’s bottoming out. It’s turning up north now.
It’s above the hourly indicators. So, seeing the downtrend that’s trading below the red line, the hourly indicators, well it’s reversing and now it’s also trading above the hourly.
So, I like it a lot. I think it can make a move to 90 pretty easily from here, especially if oil has any kind of … well, if oil has bad news, this price goes up. So, you kind of want bad things to happen to oil.
So, look at USO that’s oil. So, I’ve been thinking about selling puts on USO lately. I was thinking about selling the $11 puts. That’s still on my radar. I think oil is going to stay steady for a bit. I think it could spike higher though any moment. You don’t know when, but I think it could spike pretty soon.
We’ve seen some good moves, but we’ll see. FANG is definitely on the list. I don’t think I’m going to make that one today, but it’s close. I like the stock a lot. I can buy this one here.
PBR fits right in line with that. PBR, love the beer, love the stock. This is the biggest oil company in Brazil, so it’s a really, really big company. Trades a nice little moves along the way. It becomes a breakout here.
I like how it’s above the 200 hourly. It’s threatening that $15 level where it’s had a tough time with, and even though oil prices aren’t moving a lot higher, PBR is already anticipating something moving.
So, I like the trend. I like it a lot. Could easily be seeing buying calls here. Personally, I’d rather sell puts on, I’d rather sell like the $14 puts a few weeks out. That to me is a better call. I’d rather have that safety than try to bet on the calls at this point.
Then Foot Locker is on the list. So, Foot Locker is just a great breakout stock. I can go back and look at a few months. So, you can look. It’s had several opportunities where it made a high and a retraced.
It broke that high. It moved to retraced, but it’s still … you can see the green line, the 200 hourly, that’s bullish. It’s in a nice uptrend. It recently broke the recent high, so it consolidated. It broke out. Now, I think it probably keeps moving higher, so it’s really strong. It keeps moving up. I want to buy strong stocks that are in a strong uptrend. So, Foot Locker makes a lot of sense to me.
So, we talked about scans earlier. This is what scans I do. So, I started building my list of stocks I like and I’m close to buying. I look at them every day. I look at how they progress, how they’re doing, are they staying in the trends, in the ranges?
I get a good feel for them. When I’m ready to make the trade, I jump on it. So, on this one, it’s been on my list awhile. Just yesterday or the day before, it finally made a move higher than the recent high before. So, it finally made this move up.
So, 44 was the high. We punched through it. Now, it’s retracing a little bit, but it’s still in hourly range, so I liked this one a lot too. If I have to pick one between Match or Foot Locker, those are the ones I narrowed it down to. Oh man, I like them both. Can I buy both?
Please Mommy, can I buy both? So, I’m going to buy both Match and Foot Locker. I like both so much so.
So again, let’s go back to our earnings. Let’s make sure where earnings are up for these guys.
Match has earnings on November 5th. So, I can buy options past November 5th, but I want to be out of the contracts before November 5th. I don’t want to hold into earnings.
So, let me go here and look at options. I don’t want to do a put on this one. I want to just do calls. So, I type in the ticker symbol. What strategy do I want to do? There’s all kinds of options strategies.
I teach you what all these are actually, I don’t do a lot of these all the time, but I teach you what they are and how I use them. I actually use almost every single one of these on a regular basis on some level. So, I’ll teach you exactly what they all are, how to do them.
The two main ones are put-spread and call spread. So in this case, I’m just going to flat out by the call though. I just like the calls. October 18th is in two days, so that’s a little too short term for me. November 2nd was our earnings date, so November 1st looks good. Looks good, November 1st, and then I start looking at the contracts. Let’s see. I’ll look at the contracts that have a little bit out of that.
We’ll see, two weeks, probably at the money. So, the stocks at 43.77 so $44. It’s like close to the strike price right now. Let’s see, where 43 is at. I’d probably go 43 actually. So, this option is already in the money.
So in this one, I’m going to buy 100 contracts at a limit price. So just like a stock, you can put a limit on your option trading, so you won’t get filled at a crazy price higher. When it gets to your price, it will fill. If it doesn’t get there, you won’t get filled.
So with options, they have a big bid and ask spreads. So, you can see right now people are willing to buy this contract. It’s $1.35 and they’re selling it at $1.45. I want to come in right in the middle. So, I’m going to come in $1.40 for 100 contracts.
One of you guys is already bidding $1.40 so you moved it up. That’s okay. I’ll just sit right here. If I get filled, I get filled.
So, I’ll just leave it out there. Great thing about options is everyone can buy them. It doesn’t matter. It doesn’t move the price a whole lot, so it doesn’t matter to me. I’ll put my price out there. I’ll just let it sit for the rest of the day. If it gets filled, great. If not, I’ll look at it tomorrow.
All right. We are wrapping stuff up here. It’s been a great day. It’s been about … it’s been well over two hours.
Man, I can’t believe … that was a fast two hours. My throat is feeling it though. I’m not used to talking for two hours, so I really appreciate every single one of you coming out. I hope you learned a lot today.
I tried to make it as educational as possible. No matter where you’re at, I think you can always pick up on something. So, I hope you picked up on a few things today. This will be recorded so you can go back and look at it later. Study it. You bought it, you paid to be here, you take advantage of it.
Just go back and look through certain parts later. Go back and look at some of those chart patterns, not just the charts I showed you, but go see if those same patterns show up in stocks you’re already looking at. Go find stocks.
I always tell people this too. Go around the house. If you’re a new trader, you’re looking for ideas. Go around your house and find things you already like. You’ve already got things in your house, you bought them, so you like them. Now go see.
Okay, I got an iPhone. I like Apple. I’m always looking for times I can buy Apple. I think this is a Yeti cup, so I like Yeti.
I got Nike shoes. There’s things around your house that you already like. They’re publicly traded. Those are probably good companies because you’re already buying their stuff. You know the company, you know the product. Start following those stocks.
Go back and look at some of these chart patterns I showed you. See if they hold up on these stocks you already like. Hey, you probably already got other stocks you’re looking at, but no matter what, go back and look. See if these hold up.
Go back and look at that hourly indicator crossover. Does the money pattern hold up on stock because you’re already looking at?
Here’s a hint. It does. It will. Go back and look at it. I want you to see it. Just go back and look at the last year. Go type in the data. Go look at the year chart. Go back and look at when that indicator happened and look, did the stock go higher after you saw a crossover or lower? I’m not telling you.
I want you to go look for it. Go do a little bit of homework. So, look at some of those things. Go look at that 200 hour moving average. When you see stocks from the bottom come up to it, does it fly through like butter?
No. It almost always stops right there. When you see things like that, you see little things in the market. Then think, how can I take advantage of that? If I know stocks get to a certain level, I know the level is and it usually stops, how can I take advantage of that?
Well, I’m going to teach you, it starts with selling calls or selling puts, sometimes going to be buying the calls, buying the puts after it. So, there’s a lot of ways a trade. I show you some great ways that you can risk manage your money, ways that you can make incredible returns in a short period of time.
I’m talking tens of thousands of dollars potentially in a short period of time. You got to know when to be right and then how to take advantage of it. I show you exactly how to do all that.
Total Alpha is the total package. You are going to love it. In fact, I don’t even know if we have any seats left, but if we do, get your hands on it right now. I would love to not even take this public. I would love for this to lock them all, hundred up right now.
We’re going to work together this year and we’re going to make you guys total alpha traders. You get the guarantee, you get the $500 gift card, you’re going to get the thousand dollar VIP package at the upcoming conference, and you’re going to love that. That’s going to be so much fun. So, get it while you can.
Thank you once again for spending the time to come out here, do some trading with me, learn something. Hopefully, those trades I put on today work out well. We’ll check on those later on, but I really appreciate you guys coming out. It was a great time. You take care. Thank you so much.
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