Bear Swing Setups with Defined Risk | Swing Trading Days to Weeks
good afternoon everyone john mcnichol here and welcome to swing trading days two weeks our topic today will be looking at bear swing trades we'll look at the market and do some practice trades so stick around all right hey it's great to see everyone live with us today uh such as vijay wayne krishna remy sebastian paul uh edward we got mike cornelius and we got some weather checks there as well sheree ricardo carlos uh thanks for being with us hey mr james boyd's helping us out on the chat you all know and love him he'll be more than happy to help with any questions i am unable to get to and you can see my twitter handle on the screen at j mcnichol underscore tda james and other instructors as their first initial last name underscore tda so that would be jboid underscore tda love to see you there learn more about us and learn more about the markets let's take care of disclosures we'll get right into our discussion folks content is for educational and information purposes only options not suitable for all investors please look at the risks and characteristics of standardized options before trading spread straddles other multi-leg option strategies often involve greater more complex risk include in potentially substantial transaction costs and keep in mind your encouraged practice which you learn here today with tools such as the paper money software which is for educational purposes and successful virtual trading during one time period does not guarantee successful investment of actual funds during a later time period as market conditions change continuously you can see disclosures concerning long option positions as well as with short option positions keep in mind short option positions they can be assigned at any time transaction costs important factors should be considered when evaluating any trade and as you know we'll be looking at actual symbols keep in mind td ameritrade does not make recommendations or term suitability of any security or strategy for individual traders any investment decision you make in your self-directed account is solely your responsibility and a stop-loss order will not guarantee an execution at or near an activation price once activated they compete with other income and market orders all right yeah looking at the chat looks like we got jakarta in the house that's pretty nice i've spent some time in uh in asia myself um i haven't been indonesia but uh your neighbors in malaysia there uh likewise uh the philippines and a few other places uh there's a brief background folks if you're not familiar with myself uh been with the organization for quite a bit as many coaches such as james same deal a lot of us specialize in teaching about stocks options futures invest in strategies and you can see some of my things i like to do when i find time to do it i also have some military work i do uh as well and kind of keeps me from enjoying some of the fun stuff i'd like to do although that's fun and of itself hey here's our agenda folks we'll take a quick look in market view we're just starting earnings season we're going to go ahead and apply a swing method on looking at examples of potentially bearish swings we'll do some practice trades with that and that may set us up for tomorrow as we have uh earnings with uh three of the big banks there uh citigroup bank of america wells fargo uh we may see some breakouts uh either way and you're more than welcome to join me for the technically speaking segment tomorrow on breakdown reversal patterns i believe that's going to be at noon eastern time all right so with that uh let's go ahead and go to the thinkorswim platform and point your attention uh over on the left-hand side of the margin uh there's where you can see the follow on twitter and if you enjoy what you're learning here today this is part of the trader talks channel make sure you click like for this video so others are able to see it and if you haven't already subscribe to trader talks so you can turn on notifications so you can be alerted uh to upcoming sessions it's pretty cool uh you know i have youtube on the phone and i get alerted when sessions pop up such as james boyd and some of our other fine instructors all right so looking at the s p 500 did hit intraday highs prices do are pulling kind of inside uh the previous day uh indicating you know potential slow down of that momentum you know whether that turns into a pullback as we've seen in similar times that can pose a potential at least from a market perspective uh you know another example for a potential swing trade to the upside uh price actions making higher highs and higher lows that would be an example of an upward swing we can see examples of that followed by a pullback some of those pullbacks may only be about a day or two some of them may be a little bit more look at some stock examples and nevertheless may see something similar here uh with something like the s p uh if we go ahead and take a look at the nasdaq ndx also hit intraday high now we still have about an hour left in the market so the characteristics of today's candle can certainly change uh some traders may refer to this as more of a uh a shooting star when it occurs at a high kind of a failed move to the upside at least closing near those highs again an hour left a smaller body down at the bottom kind of hanging around that previous high looking at the dow djx some of these areas are you know part of the uh particularly with the dow and the small caps some examples of potentially the reflation trade you know in the industrials energy materials uh financials potentially being part of that uh you know dow kind of inside today or a doji again implying you know that momentum slowing down from a previous swing but nevertheless uh over uh last couple of days a successful upward swing as prices formed a higher low taking out a previous high making a higher high and then finally with the russell rut uh the russell kind of stands alone um where we've seen the other broader markets uh push higher make those highs a lot of help from the fangs there uh and uh on the uh communication services i believe as well some discretionary uh the russell and the small caps uh have been lagging a bit uh still more range bound more neutral had a strong bounce uh late last week uh we can see we're kind of fading uh down below there today kind of below i have a 55 day moving average kind of below that but when these averages are flat i kind of consider that as potentially being more neutral i know james discusses uh some of these topics as well in his uh trading the trend series so keep that in mind it's a little more bearish on the russell as uh that index is down about one and a half percent going into earnings with a few companies tomorrow a quick look at volatility you know volatility not uh screaming to the upside but just ticking up uh certainly uh taking a step up as far as a higher low as we start earnings uh that is usually fairly common okay yes i'm amused to uh wayne uh i know i noticed where some people type in symbols into the chat uh thinking that they're typing them in to think or swim so uh thanks for the heads up by the way uh disney is a stock that did break out uh actually reviewed this on one of our partners uh yesterday morning so interesting as far as the reopening uh if disney has any legs this is actually a pattern we'll be talking more about tomorrow breakdown reversal patterns um in the technically speaking series all right so um let's go ahead and look at some examples of uh some potentially bearish swing trades now those of you that had joined us uh i believe last week uh we've showed you some productivity tools and i was actually on chat earlier today uh with james uh another great session to take a look at uh on i believe uh he was on a trading options uh webcast where he utilizes you know different productivity tools to identify trend uh to identify momentum and we did that last week in the examples of you know utilizing some of those script tools to find some swing setups we kind of focused more on the bullish examples but you know one can look for some bearish examples as well and so some of these very same tools uh utilized to help identify some of these potential bearish setups so for those of you that are new this session if you focus over on the scratch pad the script that has been utilized those codes are right here likewise if you like the chart i'm using uh that code is there and also a lot of these are also on the twitter feed if you do follow me on twitter have a pin tweet right at the top that gives more of an explanation such as crossovers and k holds to look for some of these setups whether both bullish or bearish the steps to add them are right there and for those of you that happen to be uh with us live uh we'll go ahead and we'll paste that into the chat and uh you can utilize that there those are on the recorded session you can just go to my twitter feed or just take a screenshot of that information there again all the codes are listed right here all right so let's go ahead and go back and you know some of the lists uh you know that one can utilize on you know top of you know one's own watch list you know in the public list uh we've uh looked in areas such as the weeklies these are a list of stocks and other funds uh that are optional and have weekly options may give a little more uh flexibility as far as option selection if one wishes to trade those options once trading the stocks uh they're more than likely liquid stocks as well one of the steps as far as uh looking for something that may be potentially more bearish is is one trend uh so you know utilizing moving averages or a com combination of moving averages uh for instance here's best buy bby uh showing up in the red what what does that imply if i click on it uh it's showing that the averages are all below each other all the faster averages are below the slower average implying you know more of a downward bias now that's not always going to be a hundred percent obviously and or or uh confirm that that would continue we'll talk about this in a moment here the other aspect is potentially a bearish bounce and that's that second column a very common technique that we teach in the technical analysis course as well as in the workshop which mr ben watson is teaching this week where there is the kahold which is more of a bullish bounce let's see if we can go ahead and adjust this here you know an example of when price is closing above uh the high of a low day or a previous day and my script is a little more finesse as far as looking for what we call harami's or inside days those little pause for momentum and looking for that price to break out of their way whether in the case of a hole to close above or a kablo to close below so you can see some of his examples in the green go back and look at best buy i again i had listed here all right where are you at there best buy there we go so notice the best buy showing in the red which implies that that price may have traded below the low of a high day and in the case of more of a downward bias or a downward trend lower highs and lower lows that type of bearish bounce would be a potentially bearish setup uh in this case for a bearish swing uh looking at a previous move down you know here we have from high to low a flagpole price rising over a couple of days representing a flag this would be example of a bear flag setup and then in tune just like we've projected out targets for previous moves one can take that previous move uh go to that lower high in that flag and project out where that potential target is now looks like i have kind of a horizontal line on there that may have been a previous support if we go back and you know look at previous price action not sure how i had that specifically in there but it looks like uh trading back to where the price had previously reversed okay now there's no foregone conclusion that the price would do that uh in fact you know as we are in the summer months uh and this is something i believe i talked about uh last week in breakdown reversals like by the way if we actually go to the education tab whether on the td ameritrade website or on the thinkorswim platform uh go to education uh you can see the upcoming webcast and archive webcast and i went in the archive and looked by instructor john mcnichol for some of the technical classes you know last week we talked about spot in technical divergences uh swing trading we talked about finding swing setups with think scripts so you can see some of those previous sessions that i've made reference to um so speaking of divergence you know we had talked about comparing you know whether highs or lows in the price action and looking at an indicator in this case the macd now this is potentially a positive divergence so you know bulls looking at the glass half full may be looking for best buy to continue to reverse and possibly break out as the momentum has slowed down to the downside a little more neutral uh whereas bears you know may be looking for that pause to continue to the downside okay so you know there can be that type of difference in opinion whether one looks at it from a relatively shorter term or maybe looking at it from more of an intermediate period okay but as we see you know as far as with the setup i mean the price is uh trading below the low of the high day and potentially would close below the low of the high day so let's look at an example of entering a bearish trade and we'll use options to do that now if one wanted to where we can do a an individual option uh or do a spread trade we've done both uh let's say for uh this one um since this is a little more uh not necessarily strongly down but possibly a little more neutral maybe do something that's a little slightly bearish so what we can do is we can go to the trade tab go ahead and look at some of the options uh for this spread you know we may be looking at somewhere 30 uh to you know 50 days give us a little bit of a time although that be pushing a little on the boundaries of days to weeks but you know keep in mind if there's a strong move to the downside and we don't have to wait necessarily for that time to pass you know we can potentially look at some of these weekly options although keep in mind the spreads between these can be larger and we like to see these spreads to be as small as possible we've used no more than 10 percent of the ask price as a bit of a a little metric to measure that liquidity so in this case you know 32 cents this is a spread of about 20 cents that kind of falls within that realm but possibly if we you know just go out to the standard month if that's within a time frame uh you know we may see that spread actually be smaller in this case about 15 cents you know not a ton of difference okay so here's the call side here's the put side since we're looking at puts uh you know we can weather buy and at the money or maybe even go a little more in the money if we want to be a little more of a higher potentially of a higher probability but there'd be less reward if we go a little more directional uh then you know potentially greater award now also the difference here is as we look at the options knows the weeklies do have some more strike selection uh whereas the standard is in five dollar wide so if we're not looking for a stronger move you know maybe we can still focus on uh that 13 august and have a little more selection uh so in this case uh let's say we go a little more into money and and see what we're able to do here uh in this case that'd be the 111 strike and then basically sell a strike where we believe that the price may be trading at or below whether well before or certainly going into that expiration so if we go back and look at that chart again you know the potential target was at around that 10 103 area there okay um even if one's looking possibly just a trade below some of these previous lows we can target that area as well let's say around 107 108. so let's go ahead and go to the trade tab again so if we were to let's say do the 111 i'm going to right click and do buy vertical we'll go ahead and we'll take a look at the short strike now notice that this one defaults to the very next strike we bought the 111 sold to 110 the very next one notice if i go ahead and i change this to let's say around 108 that's going to increase the debit but the spread is larger so if we go ahead and take a look at the confirm and send we can see here that our risk is what we pay for the spread so notice it's a a cheaper way or less expensive way to directionally trade the stock to the downside a limited risk in this case what we're paying for that debit a buck 44 it also has a limited gain maximum gain being the three dollar spread uh what's left is a is a buck 56 or 156 dollars because it's a hundred dollar multiplier uh so that's uh you know over 100 return on risk that's a typical target for some of these at to slightly out of the money spreads the other thing that's interesting with the trade is the break even 109.56 the stock right now is at 109.67 so theoretically price just has to be about 10 cents lower than it is right now for this trade to be profitable now there are commissions uh what we'd look to do is target about half of that maximum gain 50 percent has been a common target that we've set other traders may set a different target so with that in mind uh let's position sizes let's say one to risk about 500 dollars on this trade well we can take 500 divided by 144 that should come out to be about three so another nice thing about with uh doing spreads you know define risk you have control over how much you're willing to risk in that trade there are those commissions there and let's go ahead and let's go and edit the trade there and just double check you know on that spread the difference between the bit ash you may see a little bit of a width between what the market price is and what the marketable or the mid prices i should say okay marketable price is 162. mid price is around 132. if i want you know we can increase that a little bit you know one can attempt to send it through see if it gets filled do a confirm and send in this example we got filled your results may vary with that uh so we have an example uh of a spread trade bare put spread or a long put spread uh if the price moves strongly to the downside uh we may be able to close out uh this position at a reasonable gain if the price goes up well then that would potentially be a loss now uh on the on the opposite side you know let's say if uh best buy goes ahead and trades up higher or stages of reversal yeah we may be able to close out the trade uh for more of a minimal loss not a guarantee on that but we'll look to manage that now the questions asked um jim says why not sell a bear call spread versus buying a put spread very good probably more of a discussion in some of our more detailed option classes but the short story james talked a lot about this this morning in his class on trading options is volatility what's the assumption as far as volatility uh if price goes down is it going to go up or is it going to go down will volatility rise or fall if the price goes down i know some of you may be typing in we have a brief little lag prices are falling volatility would be rising now that typically doesn't have a benefit on a short spread whereas in this case we may have a little bit of a benefit particularly with that out of the money option there so we may be able and both options would increase in value now spreads kind of offset a little bit here uh but more importantly this is actually a little more of a directional trade whereas a an out of the money call spread you know where we may go ahead and uh sell one call and buy another one this is more of a volatility play for expecting uh volatility to fall which is typically not going to happen in this case it's a little more of a neutral strategy this one's a little more directional in scope so that's why we're focusing on that you'll also notice that the return is greater as well albeit possibly a little less probability all right so there's one example of a uh a bear trade there uh now one thing we can also do too is uh you know possibly right click on the chart uh create an alert so outside of a daily routine on checking those positions um you know one can go ahead and put in an alert you know that it broke below a certain level now in this case the alerts default to above we can make this at or below so you know possibly if the price is breaking down below that support you know we may have potential to do some profit management so go ahead and hit create and there we go now ed says another good question hey could we go ahead and put in an order to buy back or actually should say sell or close out that option at a 50 target absolutely okay however if there's a big move to the downside okay one may be cutting themselves uh off as far as potential gains so it's not a matter of just closing out at a 50 percent gain it is considering profit management at that time hence that's why we utilized a price alert and also do you close out the whole position or do you possibly scale out of it we've used examples of scaling out of a trade when it hits a certain target close out part of the position and possibly let the rest continue down okay again there's nothing wrong by putting in an order to close it out at 50 percent but make sure you go ahead and track those trades to see how that history has worked out okay all right so let's go ahead and look at some other examples see how they may be setting up another one we're looking at utilizing some of the same tools as far as trend royal caribbean now notice some of these do have earnings coming up you know likelihood is that volatility may rise going into that event um again you know a spread trade can be a way of defining that risk if one's going to continue being bearish on the downside there let's take a look at a similar example here actually before i do commit to that one let's look at a couple other ones and see how they're setting up so the other one was beyond meet bynd price breaking down below some previous lows uh starting it below some of these moving averages broken support acting as new resistance and we can see an example of you know between that previous move down kind of more of a flag price trading below the low of that high day again if one was looking to uh target that you know can go ahead and just go from that high to that low right click we'll uh do a duplicate drawing and then that would be potentially that move down based off the previous move some traders may be a little uh targeted there you know as far as with time those earnings here coming out a little more going in the earlier months so you know if there is more of a stronger move to the downside you know there may be time for that and you know let's for this one do an example of uh just an individual uh put option now the the pro of doing an individual put option is unlike the uh and we'll make that comparison here let's see here let's say for this one uh we'll go at least 30 out now 38 days out now some traders may go a bit further probably one of the intent here is to close out this position prior to earnings uh so that august one still may be okay uh if we uh go ahead and you know take a look at an option that is you know add or slightly more into money you can see how much those options are so you know one of the cons on the long option is uh is the price whereas if we did a spread notice the cost of the trade the amount of capital is much less and if you have a target in mind you know whether it's that short strike it has that defined gain now the pro the individual option uh is you know we have more potential to profit on the downside so if we uh went ahead and did this option that's a little more into money i'm going to do a buy custom and we're going to do a buy custom with stop and we're going to utilize a conditional order in this trade now keep in mind this is one contract and you know one has a smaller account that can even be expensive for one contract okay uh but let's it's still a defined risk but let's say we can put in some conditions that if the price goes up or if the price goes down to close out the trade in either fashion well to do that we can go ahead and let's plan this out you know based off of kind of a swing method and we may go ahead and look at this high this previous resistance and say well if the price goes a percentage above there close out this put position uh so with that let's go ahead and measure that uh we'll go off of uh we'll go off of one percent above the high day technically i guess this would be the high day right there uh in that flag pattern so let's go ahead and look at that high that's 142.99 we'll go to the calculator we'll go to 142.99
and we'll multiply that by one point that'll be 101 of that price or one percent above that high that should be a level of 144.41 let's go ahead and mark that 144 41. it's a great way to visualize the trade just utilizing some horizontal lines when you right click and edit you can specify that price which we got and then we can go ahead and set a target on when to close this out and that could be that full target may even set an alert if it makes half that move so for instance you can right click anywhere on the chart create an alert you know i've had multiple contracts may use as a way of scaling out or at the very least use that as a way notes said add or above i kind of mess that up let's right click create another alert add or below and use that as a way of potentially adjusting that stop order at least adjusting it down to a break even to an entry price there so thus continuing to reduce the risk if we have a positive move down okay uh on this order here uh let's say we'll just start off with uh these targets in mind 144 41 118 72. so what we'll do is we'll go back to that order notice on the sell order uh currently it says stop day what we're going to do is we're going to change this to a market order and change this to gtc now this is a technique uh consideration is you know make sure that they are more liquid options hopefully smaller spreads that's one of the reasons we were looking at those weekly lists as far as more widely traded stocks and options and then notice as i move my cursor over to the side here there's that little gear that appears that's where we're going to go and put in our conditions so we're going to go and click on our condition there it's going to open up another window and this is where we can go ahead and put in uh these conditions we can see if the price goes at or above 144 and change close it out if the price goes down and hits 118.72 that potential target go ahead and close it out okay uh so in this case we're going to come down here under conditions under symbol and it starts filling out automatically there's the underlying symbol beyond we go to the next that's mark that's the last price that's good enough here and then we got the less than equal to or greater than or equal to so since we got less than or equal to that would be the lower price in this case since the bearish trade our target will plug in 118.72 we'll hit enter make sure that sticks then we can go ahead and click on the second box notice it starts filling out again beyond mark in this case we'll do greater than or equal to and that would be the 1441.
and plug that in hit enter and then notice you can actually start reading part of that down here and if you click save and then confirm and send this is where you can actually see what one's intended to do so it's attempting to buy the option at that price if that's filled uh it will create a sell order that'll be market good till cancel and it will sell at the market price next available price if the stock goes at or below 1 18.72 or goes at or above and i think that's yeah one f did i do that right that's a that's a big difference there oh yeah that is actually a pretty big move on the downside uh or if it goes above 144.41 okay uh there's the risk on the trade 1570 however you know if the pr if the stock does go up uh in this case uh the underlying would have to go up about uh four or five dollars uh theoretically this option would probably lose i look at the delta on that it's about a 60 cent delta the price goes down goes up about five dollars we're probably going to be out about three dollars and change maybe okay could be a little bit more uh but we at least position size this to a maximum loss now some other questions as we let's get this trade out and then address some of your questions there send that through okay that's filled we'll continue managing that uh so go ahead and look at some of your questions and thanks for james for helping out on some of the technicals uh on the chart there such as the expanding the chart and in some additional indicators on there such as corporate uh corporate events yeah a lot of these folks if you're trying to manipulate the chart just come up to the top there's a gear there if you click on the gear you can familiarize yourself from each of the tabs such as the general tab uh if you're dealing with something such as price or or time that's where you can expand the chart as far as time if you're trying to expand the chart as far as price you can do the same thing here and if it's some pertaining to an individual instrument you know such as equities you know this is where you can show those corporate actions if you don't already see earnings and dividends on the chart okay uh let's see well actually it wasn't sharing that let's uh bring that up one more time so again the gear up at the top you click on the gear and take a look familiar yourself with the different tabs going across and since one of the questions pertaining to the time you click on time there's your expansion area right there if you're looking at price action this is where you can make adjustments as far as expansion there and then pertaining to individual instruments you may be looking at uh there are those corporate events right there all right uh now as we're looking at some of the other things uh kingly said you know can you use a percentage in stop loss condition absolutely in fact in one of our previous sessions we've talked about utilizing trailing stops now typically on the swing trades we haven't put in a trail and stop unless we have at least somewhat of a favorable move after that initial stop we've utilized examples of percentages atr and also the parabolic sar so if you want to learn more about that one once again go back to the education tab go in the archive look for john mcnichol and if you go ahead and take a look uh down the list a little bit on uh swing trading uh you'll see an example of trailing stops uh explained and as we get into some of the profit management uh we may go ahead and utilize some of these as well okay uh let's see what else here uh let's go ahead and come back to the platform uh with the uh time we have left and look at some of our uh previous trades we're gonna go to monitor tab and uh a f abercrombie and fitch this was an example of a buy stop that we put in that still hasn't triggered uh so let's take a look at that one sometimes i do a better job than others on trying to trail down an entry this is an example of one that i did not where we look for an entry trying to capture that bounce it didn't happen early last week but we did get a bounce going into the end of the week where we had a cohold however not much follow through notice that there is an existing uh bracket order that's in here basically what we would call a a i go back on the trade tab uh right click basically a buy custom with oco bracket is which we did where we did a a buy stop to potentially trigger now it hasn't triggered but it's pulled back notice the trend is still intact here and let's say that we may look for the price to actually trade above this range it looks like it did intraday and faded uh let's go ahead and you know kind of look at this area again and let's say well if the price goes above 4507 to go ahead and trigger that trade uh you know within about 20 cents usually we've done an example of about 20 cents above there that would be 45 uh 27. so let me go ahead and edit this and say 45 27 up that's wrong that's the wrong indicator there and try and get that there it didn't like it trying to get on the line there come on john and we'll say 45-27 okay trying to see if it can capture that bounce likewise the stop we can actually adjust these on the chart since the orders are on here i can set the stop a little bit below that low as far as the target for this trade this is an example of more of a bullish swing uh you know we may be looking to target that previous high or looking to capture a similar swing to what we had before so this is kind of more example of a bullish swing from low to high we'll duplicate that drawing go and move it to that low and looks like targeting up around this area now i still have kind of more of a larger pattern uh but you know potentially looking at a lower target so i can go ahead and adjust that closer to that low there now it's pretty easy to adjust those orders and more importantly uh adjusting the actual order to get into it and since uh we're looking at trading at around 45 27 we'd have to go ahead and right click on that order and go ahead and uh basically edit whoop wrong one so i can do that again right click on the order and uh why is it not oh down here cancel and replace and the trigger price now is going to be uh 45 it's actually not too much lower than what i originally had on it uh 45.27 that was about 20 cents above that high and then we could put in a limit order just a little bit above there we put in a little bit of a buffer about 20 uh 20 cents that way if there's a little bit of an opening gap uh you know possibly be able to get at a reasonable price if it gaps too strong then no fill okay we'll hit confirm and send and send okay so and i need to double check sometimes it resets but let's go to the monitor tab and work in orders yeah i wanted to make sure that this example was a gtc because we're looking at an example of it breaking this horizontal resistance there so we'll see if that triggers we'll follow up on that one next week um another one let's see we have any profit management here try and close up these orders uh american express this is an example of a call spread that we did a long call spread we were looking for a bullish bounce and target in that 170.
notice we're actually through that spread at 172 so this is a profitable trade we got three days left to expiration uh if i right click on this and do a uh view trades we had a bought five dollars and sold 264. so that spread cost about two dollars and 36 cents if i right click create close and order the spreads worth four dollars and sixty cents now the most this spread can be worth is five dollars so there's only 40 cents left in this so this is also one of the reasons on not just arbitrarily setting a 50 percent target is hey if the momentum is there with the trade you know considered uh letting the stock run or possibly scale out and i can't remember if i'd actually scaled out a part of this uh if we go to account positions and bring up axp now it looks like we didn't we opened it about mid month so we're just going to go ahead and close out as we want to do uh prior to expiration so right click create close and order and we'll sell that spread and out to double check make sure we get that fill in um i know we're running out of time but last one uh this is just a long put on citigroup uh now this one's marginally down earnings are coming out tomorrow uh notice that the trade price on this was 6.25 so paying 625 for that option that's 625 that's what's at risk as price goes up now citigroup can knock it out of the park we may see a bullish reversal i'm going to be down on that trade unless i close it out uh if things are more bearish on the downside as far as with uh those stocks uh then we'll have a profitable trade so i'm going to leave that in so we can see what the impact is of earnings next week all right folks hey we covered a lot hopefully you learned something new today as we reviewed the markets we looked at some examples of bear setups on the bearish swing side utilizing an example of a defined risk trade with a long put spread i teach those every thursday at uh i believe 11 yeah 11 a.m eastern time if you wish to learn more about that we also did an example of just a long put as well utilizing conditional orders and likewise we've utilized some of those conditional orders as well on some existing setups that didn't quite fill and adjusted from there now we're encouraged to practice what you learn here today as we did those bearish swing trades we showed you a couple of different setups that you can practice with maybe find some on your watch list that are showing similar uh attributes there okay uh certainly drivers with earnings tomorrow on the banks uh can be a game changer we'll see which way that swings and we'll talk more about that in the breakdown reversal patterns tomorrow at noon remember folks in order to demonstrate the function out of the platform we did have to use actual symbols keep in mind td ameritrade does not make recommendations or determine suitability of any security or strategy for individual traders any investment decision you make in your self-directed account is solely your responsibility thanks james for helping out on the chat on the chat appreciate you as always everyone have a wonderful day bye now you