Long Verticals & Diagonals | Ken Rose CMT MBA | 3-25-21 | Trading Bull Flags with Long Verticals
hello investors so interesting day in the market the mark was pulling back but it looks like we could be getting a little bit of a bounce here in the market does that relate to these strategies of long verticals and diagonals well let's check it out [Music] so again i want to welcome over here to the session here long verticals and diagonals those are of you that are expecting john uh uh i'm filling in for john here today but i do anticipate that he will be back next time just a reminder you can follow me on twitter my twitter handle is at krosc underscore tda and i post things on twitter related to this area as well as other areas of investing great to have mike falette over there in the chat window much of what i know about options i actually learned from mike so do feel free to address any questions you have over there to mike very knowledgeable in this area as well as many other areas in the option and investing arena you can also follow mike on twitter i'm sure to be more than happy to send over his twitter handle in way of disclosures here today just a reminder that in order to demonstrate the functionality of the platform we need to use actual symbols however td ameritrade does not make recommendations or determine the suitability of any security or strategy for individual traders any investment decision you make in your self-directed account is solely your responsibility we do use the paper money software application here this is for educational purposes only any level success we may have in our paper trading account isn't necessarily indicative of the success you have in your actual life trading account as market conditions do change continuously so with regards to our agenda here today i thought would um you know looking at the overall mark we'll take a look at the s p 500 but it does look like we're getting somewhat of a bull flag bounce and that does tend to lend itself well to the long vertical strategies so we'll take a look at the market we'll discuss the strategy a little bit about what the setups are in relationship to long vertical strategies and we'll look to put in a paper trade and given time we'll go ahead and do a diagonal paper trade as well we'll see how time goes as we're going along here so i'm going to go ahead and bring up the thinkorswim platform here and let me just collapse this left-hand side right here and you can see that overall the market's been in a nice bullish uptrend creating higher highs and higher lows we're kind of bouncing along here up here there's a high a higher high now we're coming down here we could be bouncing here which would be coming off of a higher low which was a higher low right here so overall the market's in a nice uptrend we've pulled back on our bounce and movement to the upside this sort of equates to one of these setups that you look for when you're looking at doing a long vertical and one of the key things to keep in mind with regards to long verticals is long verticals require movement on the part of the stock under most circumstances it does depend a little bit on where you set them set them up but conventionally usually looking at a situation where the stock needs to move in order for you to have a level of profitability now in order for stock to move it has to be moving in your direction right so like it to be going to the upside and it's always beneficial if the stock needs to move in the direction of the existing trend you know overall stock's been moving up like this what does that indicate that indicates when we get a move to the upside that is statistically more likely to occur with more momentum and more speed than moves to the downside when you're in an overall uptrend so here again we have the s p 500 pulling back we did have a little pop up here to the upside we don't want to ignore that that just is an example of risk you have just because something's moving up doesn't mean it's going to continue to move up we do have a pullback here and looks like we're getting a bounce and potential move to the upside so with regards to a long vertical typically what we'll do when we see a bounce like that occurring we'll go ahead and we'll take a long position on an option at the money about where that bounce is occurring then we'll identify where our target is that's usually going to be that resistance level up there that would be our first target we could have a secondary flag target we'll talk about that momentarily but identify this target here to begin with this will usually be the area that will be selling the option now because this is a bullish option trade we'll be using call options so since we're buying a call option that has a lower strike price remember just as a quick review call options give you the right to buy the underlying security at the price it's designated which is the strike price and if we're buying an option that gives us the ability to buy the stock at a lower strike price that option is going to be worth more than the one that we're selling up in this area right here so the result of this is a debit spread because we're paying more for what we're buying here than what we're selling it results in a debit spread what does our max gain on this trade well we're coming up here we'll pull down here and and here's we're buying down here let's say we're buying down here just for just for mathematical purposes let's say we're coming down here and we're buying this at five dollars and we're going to be paying three dollars for that let me make that an arrow right there and then up here in this area we're going to be selling an option that's up there let's say ten dollars and we're going to sell that call option for two dollars well then our net debit right here is how much our net debit is going to be one dollar right because we're we're buying this one we're selling this one so the net debit then is one dollar what if the price crashes and goes down here the price crashes and goes down there both of these options will expire worthless so what is our loss on the trade our last loss on the trade is going to be this one dollar so in this scenario right here our maximum loss on the trade is one dollar doesn't matter how far down it goes we've defined our risk at one dollar on the other hand what if the price goes up here and comes up here to twenty dollars the price goes up there and is sitting at twenty dollars then this five dollar call option that we purchased it has the five dollar strike price it will have an intrinsic value of fifteen dollars why is that we could exercise our right to buy the stock at five dollars we could turn around and sell it for twenty and we would make fifteen dollars so when these options are in the money they will typically be trading at their intrinsic value plus some time value we'll just consider this at expiration to make the math a little bit more simple so that option right there we could sell that for fifteen dollars but how about this ten dollar option that we sold we're short on this ten dollar option this 10 option that we sold is now going to be is now going to have an intrinsic value of 5 whoops we're up to 20 here right so that's going to have an intrinsic value of 10 dollars now we would need to close out that short position we need to come in and close it out so in order to close that out how much are we going to pay we're going to pay ten dollars another way to look at it would be would be to look at something like this we could exercise this option to buy the stock at five dollars so we could turn around here and sell it for ten dollars it's the same type of situation we're going to lose on on that particular transaction we're going to pick up five dollars so looking at this then in this kind of a scenario would be you know theoretically we could come in and sell this one for five bucks would have to come in and buy this one back for ten dollars and would be left with five dollars here so it doesn't matter how high the price of stock goes once we get above this 10 strike price everything we make on this one is going to be is going to be a loss on this one so our maximum gain on the trade is the width the distance between the two strike prices minus our debit right here that's what we originally paid so our maximum gain on the trade is going to be five bucks minus our debit equals four dollars the key thing to keep in mind though is we need to have that movement if the stock just stays right here then again both of those options will basically be worthless now there's some places in there where we can break even and the like which is basically going to be our long strike price plus the debit that we paid would be our break-even point well now now we're kind of taking a look at the math here let's look at some potential candidates and to do that i'm going to open up our left-hand side over here here we have a watch list this watch list right here is just simply it's an intersection between those stocks that have weekly options available and those stocks that have penny increment options available i'm frequently asked when i bring up a watch list or something like this can can you send out a link for the watchlist or something along those lines i'm not able to do that but i can show you quickly how to run this scan just come over here to the scan tab and on the scan tab it'd be nice if we could see everything up here well on the scan tab when you bring it up notice we're over here on the scan tab right here over here is the stock hacker so it's going to be scan tab stock hacker then right here where it says scan in we're going to replace that with penny increment options and there will be another one where it says intersect we'll put in there weekly options or we could do vice versa so right over here if i open that up a little bit scan in i could come over here these are public watch lists nothing special well it is kind of special they provided them for us it's not something you need to like write any kind of a real complicated scan or anything like that just come in here come down here to where you have public and under public choose weeklies then over here where you have intersect with again come down here to public and under public here choose penny increments right there then if you wanted to you could add a few things like the price of stock has to be a minimal amount and you want to have volume at a certain level you know you want to feel free to do that you can do that here by adding adding a study filter for volume example if i hit study right here this brings up a study i could change this study to volume average volume i'd say okay i also want these stocks to have average volume of a million shares a day or if you didn't feel like you needed that much you could change that to 750 000 along those lines um don't really need this i'm not sure where that came from looks like some kind of a custom deal in there and then so we have this and then also if you wanted to put like a like a price you know you only want stocks for option trading purposes at a certain price you come down here and choose stock rather than study that's where you find your price and then here for the ask price and i'll usually use clothes that's usually tied more closely to the current price and then you could move this up to maybe 15 20 bucks and then from that point you could go ahead and run the scan now after the scan is run by the way it says 50 out of 213 we can increase this to like 500 and then rerun the scan and it would show us all 213. after you build a scan like this you can save the scan with a name you can come right up here just to the right of add condition group click on that you could choose save scan query i'm not going to save this because i already actually have it but you can save the scan with a name and in doing that it saves you a step rather than come over here and click on save as watch list on the thinkorswim platform where you have your watch list just come over here and go into your personal area right here find the name of it i think this is weeklies intersex notice right here where this is at it's right here okay kind of going back and forth but notice over to the left you have those circles with a little target in the middle that means this actually isn't a watch list it's a scan so you can bring you go to your go to your watch list and bring up a scan and when you bring up the scan let's come back over there when you bring up the scan the scan will run itself and populate with your columns right here and that's that's that's what we have right here is that scan so within here there's a couple things we can do as far as identifying candidates we can use a custom column i've got here a bull flag column also got here a breakout column that would be another potential technical entry if we have a little bit more time today and we're able to do a diagonal we'll we'll apply this bollinger percent b and looking for some potential candidates we'll see how we do on time but with regards to these two right here we talked about the flag the bull flag pattern another technical signal you can look for is breakouts and a breakout is just something like this let's say a stock's maybe had some difficulty breaking above a resistance level it's tested it maybe once or twice or maybe a stock came like this and did something like this and now it's coming back up and it's revisiting a previous high when stocks break out when stocks break above some of these significant technical areas there's a tendency for them to run now they don't always run okay there's a tendency for them to run before they pull back okay again they don't always do that we'll take a look at a couple examples where they do run we'll probably run across some ones where they didn't run either but when you're when you look for a stock that's that is breaking out like this one of the things to look for is look at volume and also look at implied volatility typically when a stock is moving to the upside implied volatility is moving to the downside however there are certain circumstances when a stock moves to the upside and implied volatility is actually increasing now that occurs because investor interest in the stock is also increasing increasing demand for the underlying options so if we have a if we have a resistance breakout we can look for volume that would be a nice that would be strong volume possibly a volume spike on the breakout we could also look to see what implied volatility is doing is implied volatility increasing or building up as we're breaking above that resistance level so with regards to an example in fact i was looking at one a little bit earlier today as far as an example of a breakout where the stock continued to run home depot i want to look at an actual example you can see home depot this is one of those situations where home depot came up here notice we have this resistance level that's significant if you look real close here we came up here and we hit it one day and then two days and then three days before we finally broke above it let's get this out of the way so here's here's our breakout point right right here okay i'm going to take this off here because i want to bring a line here this is our breakout point look at the volume spike on that day huge volume spike right the volume spike related to that day is this guy right here so very strong volume indicating hey perhaps this might be a potential breakout trade remember when we're doing long verticals we need the stock to move it it's got to move for us if it doesn't move then we're gonna then we could be we can have some difficulty so here we have a nice move also notice down here it's a little bit hard to see but when we initially broke out react implied volatility continued to move down for a couple of days but now it's kicking back into gear and it's moving up so again investor in investor interest is increasing in the stock and the stock is moving up and being complemented by an increase of implied volatility could we do a trade on home depot at this point probably not advised because it's because it has gone nicely here if we pulled up possibly some indicators like stochastic or rsi would probably see it way up there in the overbought area doesn't necessarily mean you can't trade it doesn't necessarily mean you can't do a long vertical on it we'll play the part of the investor that's looking for something to be a little bit earlier in the cycle with regards to a potential breakout also and a note on our note on the columns over here if you'd like these custom columns do feel free to contact me via twitter i'm more than happy to provide you with the links for the custom columns along with a video on how to install them if we have a little bit of time here at the end of the session i'll try to swing it in but we usually don't don't have that kind of time i also get frequent frequently get questions on these labels up here same thing um if you'd if you'd like these you don't have them i see i see a lot of familiar names over there do you want to welcome scott and roy and everybody else but if you like these and you don't have them again you can just you just contact me via twitter i'm more than happy to send you out a link so you and a video that shows you how to install those okay well then potential candidates let's come over here and look in our bowl flag column to begin with that's kind of what the market's doing right now now this column is meant to identify stocks that currently have potential bull flags you can see that we have a number of them now it's not perfect it doesn't do a perfect job but it tends to do a pretty good job we'll we'll go ahead and look at some of these and look at them what are we looking for on a bull flag well we're going to be looking for a stock that is in somewhat of an uptrend has pulled back okay and is bouncing and just starting to move up now not all bull flags are created equal investors this what i've just drawn here this is a bull flag and that's a bull flag that you can trade from but if you wanted some perks with your bull flag in other words if you want to look at it and say okay i want to if i want to compare this bull flag to other bull flags a couple things to look for is this movement to the upside that's the pole okay and when the pole is developing it's nice to see volume increasing in other words here's our volume down here notice this this yellow line right here that's average volume we'd like to see that average volume kind of popping up a little bit as we're moving up the flag is the move to the downside on the flag part of it would actually like to see volume decreasing and then on the bounce that completes the flag right there i would like that to be a on that bounce day right there would like to that day for volume to show to show an increase a spike would be ideal now let me just say this if you wait for this i call this like a perfect storm a technical perfect storm if you wait for this you're probably not going to trade very often and you could be scratching your head saying wait a minute that would have worked out okay and that's actually the truth okay you can look at these things but don't necessarily say you have to have these i mean if you have to have these that's okay all right but do realize there's a lot of profitable trading that goes on without these three additional perks that you're looking at with regards to bull flag i bring these up because in a market where the overall markets bounce to the upside we could have a whole lot of bull flags and we could use some of those potential perks as things that would break the tie so to speak so let's take a look at some of these then i'm going to bring up i want to make our volume panel here a little bit bigger i'm going to shrink these guys make our volume pad a little bit bigger i'm on a six month chart just so we can zoom in a little bit better let's go to a three-month chart right here there we go and let's take a look at something here's costco costco you can see where's where is our bull flag on costco right here let me come down here see if i can get rid of this drawing for bull flag on costco here's the movement to the upside here's the movement to the downside and we're bouncing and moving up right here this candle right here though it's not very exciting today is it we're basically trading we gapped up to get the completion of the bull flag but that candle is red which means we're currently trading below where we opened today so based on that we'll pass hog here's our pullback and here's our bounce but coming down here we create a lower low not in an uptrend len uptrend pull back here pull back here and a bounce um it looks like a little bit early in the day looks like it looks like we'll probably hit average volume that that may be a possibility again very volatile met up trend pullback but in our pullback right here we came down here we created a lower low looks like volume's been decreasing as we've moved down which is a good thing if the volume today was above these decreasing that would be a positive mo pull up here pull back and a bounce looks like we went x dividend yesterday that could be part of the part part of that move to the downside does have a healthy dividend there about 86 cents that may be a possibility there polti homes that pulley homes that's ammo there's pulley homes right there so home builders have been rather vulnerable to the upside of the downside but we do have a move up here pull back and abounds usb this one has a nice trend we can see our trend here moving up i'll pull back on a bounce target up here earnings announcement out in this area right here what is our option what does our option liquidity look like on usb we haven't really been looking at that i'm going to change our strike prices down here to about 14 just we can take a look the liquidity looks fairly good on the option we're looking at the slippage between the bid and the ask price vote swung into an uptrend we're coming down here we're getting a bounce we got some nice a nice it looks like volume is going to be above the average on our bounce right here this wells fargo so wells fargo's got a nice trend nice solid trend here's our previous support we're coming off of a higher support level here's our resistance we have an earnings announcement out here we'd have to we would have to negotiate with as far as the time frame in the trade but you know this this candle is is a nice strong candle that we're having here today it'd be nice to have some volume not seeing volume on that one tell you what let's let's go ahead and um let's go ahead and we'll we'll stay here with wells fargo one of the things about wells fargo that i that i know just from just from previously uh doing some paper trades on it is it does tend to have excellent liquidity or slippage between the bid and the ask price we're basically sitting at about two cents here which which is a which is a benefit it doesn't have to be two cents it can be a nickel or even a dime if the trade works out for you but particularly when you're looking for a trade where options are going to be in the money on the expiration that slippage has it has more of a tendency to come back and bite you okay if you're looking at more of a situation where you're successful but you do have to get out of the trade the slippage can come back and and create some potential difficulties looking at the chart and looking at the movement here how much time do we need to get up here we don't need to get a whole lot more time than we need it took us one two three four five days to get down here we've got a very strong movement here we could go into this trade for seven days that's a possibility or possible we could go a little bit longer what is our first we're currently sitting at 39.17 so our first op the at the money option would be the 39 and our target is up in this area right here let's bring a um see if i could grab i know that when i when we're doing this on the in youtube sometimes we lose the top part of our chart which is why i have this adjusted a little bit but let's just see can i move that up just a touch well i may move this around a little bit as we're going along okay right so our target up here then is going to be bring a line across here the high up here was 41.61 here's about 41. let's just call it let's let's just say our targ our targets our target is about 40 41. so we'd be looking to get a 39
and possibly selling either a 40 or a 41. let's look at it as a short-term trade so we don't have to be overly concerned about this earnings announcement that's coming up so come up here to the trade page then and why not do seven days if we get a nice return out of seven days i you know why not let's let's let's let's see what it looks like in relationship to the at the money option as it relates to our target so the at the money option was a 39 so we'll be buying the 39 then we're going to come out here and we're going to sail at around our target our target was it was in the 40 40 to 41 area um let's let's keep it tight at 40. so we're asking it in seven days just to get above 40 and we'll see we'll see what our return is at 40. that's going to be a dollar
wide long vertical so we'll come over here and to bring the order up there's a couple ways you can do this i can hold my control key down click on the ask here that will buy that and i could hold my control key down again and click on the bid price here that would sell that one or i can come up here to the one that i'm buying and do a right click on the ask price come over here and choose buy and then over here these options come in 50 cent increments if you if you notice that so in order to get two dollars wide we'll come in here to deep and wide we'll come up here to one month two strikes and we'll choose vertical and there it is right there so we have our trade set up here let me just throw out a question for everybody here we're looking at a debit here between 43 and 44. this is one of the nice things about having nice liquidity on the underlying options there isn't much distance between the mid and the natural let's say that we're able to get filled at 43 okay which is that well i'll tell you what let's let's be a little bit more conservative let's say we have to go up to 44 to get filled if we have to go up to 44 to get filled what is our max loss and what is our max gain on this trade let me just throw that out there you see how we have it set up here if we have to go out to 44 to get filled what is our max loss and what is our max gain on this trade there's a little bit of a a lag between my questions and what comes over in the chat window so i will answer my own question okay and usually i'll see the correct answer scroll over there in the chat window but the correct answer is it's the distance between our strike prices here which is one dollar minus our debit right here which is 44 cents so what is so what does that mean so our max loss is 44 our max loss sorry our max loss is going to be 44 that's our max loss i think i trade so many so many short verticals some sometimes i get the language mixed up just to touch so our max loss is going to be the debit that we pay in the trade just like we did the math earlier right what is our max gain i think i said max loss what is our max gain on the trade and by the way i saw i saw some correct answers over there so we're we're in good shape here with regards to the max loss our max loss is the debit that we pay what is our max gain so our max gain is going to be the distance between the strike prices minus the debit that we pay yeah and what's that going to be can i bring up it's not let me bring my i'll just grab my little calculator here so we got this bringing the strike price is one dollar minus our 0.44 which gives us our our max gain is 56 our max loss is 44. um great job fan michael steven ricardo everybody else great job excellent that that's fantastic so how many contracts do we want to do then well if our max loss is going to be forty four dollars let's play the part now that's that's gone up a little bit to 45. let's let's let's go ahead and use 45 bucks here our max loss is going to be 45 let's play the part of the investor this is a seven day trade we're asking for the stock to make a big movement this is speculative in nature we'll take a look at the probability of success on this in a moment let's say we're going to play the part of the investor that's okay risking a thousand bucks on this 1000 bucks divided by 45 that's our max loss would be looking at doing about 22 contracts so let's amp this up then to 22. and before we set it before we send it in let's take a look to see what it looks like on the chart and let's also look at our theoretical probability of success and to do that we'll go ahead and bring up the option chain the option change where we are selling we're buying the 39 and we're buying the 40.
what is our theoretical probability of success on this trade if you guys can see this okay let me just give you a couple of heads up here on the 39 here the 39 delta right here 39 delta is .55 the 40 delta right here in case you can't see it is .35 so given those what is our theoretical probability of success on this trade well what we want to keep in mind is the delta is giving us the probability that that option will be in the money on the expiration date so where does this stock need to be on the expiration date and keep in mind we're talking about on the expiration date well it needs to be at 40 or above right what's the probability that occurring 35 percent this is the nature of long verticals by nature long verticals give us attractive reward to risk ratios but inferior probabilities of success in other words the probability of success is typically less than 50 percent so if we're okay with this if we're okay with being in a trade for seven days having a probability of success of 35 percent and having a return on risk of we're looking at return on risk of about 60 about 56 right about 56 return so so our maximum gain then if we get a 44 debit his maximum gain is going to be about 56 so we take 56 as our max gain divide that by our debit here of 44 gives us a return of about of about 127 percent now we would like to have a return that is greater than 100 because we only have a 35 percent probability of success that number's bouncing around by the way so if we're comfortable with those numbers we would go ahead and go along with the trade right let's play the part of the investor that's okay with these numbers and we'll go ahead and send this order in and see how we're doing with regards to time let's first of all see if we can get filled at 44 here if not we'll come back out and we'll do it real quick here at 45 so i'm going to do a confirm and send here let's put this into a different account because i don't teach this one regularly we'll just pop it into how about holding center that's probably a good place for it and we'll send it in and we got filled immediately of course this is a paper trading account we don't know that would happen in an actual live trading account okay well you know we have a few minutes here before we go further though what i want to do for those of you that i do see some names over there that i'm not familiar with perhaps some of you are new to our webcast sessions here perhaps you're new to options i'd just like to point out some resources that may be beneficial to you if you felt a little bit overwhelmed with our discussion on these long verticals if we come over here to the td ameritrade website it's just td ameritrade.com you can log in with your username and password and you probably look something like this when you log on to it what you do is you come up here to education and rollover education and come over here under education center and click on options and right here at options notice we have an options course that covers all the stuff to give you a nice solid foundation if you're familiar with options i still recommend you come in here and and preview this course i think you'd find some new great information particularly as it relates to the thinkorswim platform if you've never traded an option in your life this is a great place to start because it actually assumes that you don't have any previous options experience along with the options course there's a set of videos in here that look at different aspects with regards to options as well those videos usually run somewhere in the neighborhood of about three to seven minutes also under this tab when you come up here to education earlier education i'm going to come over here to webcast and when you come into webcast right here we'll give this just a second to open up if it takes too long i've got a little cheat a little cheat call a little cheat thing over here that'll get us a little bit quicker okay so this is what it looks like so when the webcast opens up this is what we're doing right now is a webcast i'd encourage you to come over here and open up the webcast calendar right here and when you open that calendar up think about green if you're if you feel like you need if you feel like you need a refresher think think about green and notice right here we have getting started with options that's going to be fridays at 11 a.m if you want to get a little bit more advanced with regards to options we have the master of advanced options over in the chat we know that being mike fallett and he also has some options strategies here i'm just checking out right here mike i know he's got some stuff over here with regards to options trading if i can just find it here okay there's pat they've they've changed this around a little bit with regards to our time and when we teach these things so there's active market trader in review and where we got it here i always thought it was in the morning maybe someone was substituting for mike here recently but mike i'm sure mike would well there's active trader futures you know perhaps with the education day that we had and the like we we don't have it in this current listing right here but anyway it'll be worth your time to look for mike fled in here let me just let me just say that for sure it would definitely be worth your time to find mike fled in here on a normal week when we don't have education day because i'm thinking it's it's wednesday there during the wednesday there during education day and check out his multi-leg option strategies sessions he he presents some great stuff in there all right investors so um it was a little bit tight for time let me just with regards to a concept in relationship to um to trading diagonals i'll i'll just come over here and preview a tool with you right here okay we don't have time to put on the entire trade but this is a study that's part of the thinkorswim platform it's not custom or anything else it's called bollinger percent b and just come over here when you when you bring up a watch let's come over here do right click on symbol choose customize and then if you start typing in here bollinger you'll see it bollinger percent b you can bring it up right here you can highlight it and then add it over here i'm going to click on cancel because we already have it this basically tells you if the stock is trading at about a midway point of where it typically trades is it is it at the high end of a typical trading range or is it the low end of a typical trading range if it's in the middle it's sitting at 50 percent what some traders will do when they're trading diagonals because there is some some directional aspect with regards to diagonals you want you want the stock of the price to be at a certain point in time and if you have a stock that's going like this it's kind of going sideways and you pick it up when it's in the middle of that range and you have a diagonal strategy that you'd like the stock to be at a certain point if the stock's more in an uptrend it makes it more of a difficult call if it's more in a downtrend it makes it more of a difficult call it's moving sideways and you've got a sweet spot for your diagonal right here as you get closer and closer to the expiration of that front of that front period option from a statistical standpoint you have a more highly likelihood of the stock crossing through the sweet point sweet spot probably not going to be there on expiration but because you kind of found something that's moving sideways and it's sort of in the middle of that range you can set it up so you're mid-range and the stock can have a statistical greater probability of coming through and hitting that as you're getting closer to expiration so the bollinger percent b you can sort by this column and you can look for some candidates by coming down here to the 50 area right here in the 50 percentile range pull up a chart and look for some sideways movement with the stock being in the sideways range i don't know that we'll find anything here because we're about out of time but let's come down here to about 50 percent you know one thing i'll i'll usually come in at about 55 and go down here to about 45 percent i'm going to go through these relatively quickly okay you know this one right here sideways range you can kind of see it right here we come across here there's resistance there's support we're sitting sideways do we feel like it could continue to move sideways here for maybe 20 or 30 days it's a possibility okay and then you could just come down here and you know we kind of talked about what you'd be looking for so with that let's wrap things up here okay so what do we do here today well we talked about long vertical setups we did a paper trade on those we had we had time to discuss a diagonal paper train some of things related to but we didn't quite have time to put the trade on that's okay i thought i thought we'd cover these other these other areas in a way that is nice hopefully my goal here today is you're all walking away with something new and that could just be an increase of understanding something new that will benefit you that with regards to to your future future trading and also your future investing again just a reminder love to see over there on twitter also i'm sure mike would be more than happy to send out his twitter handle he's got some great stuff over there on twitter as well in wave disclosures here a reminder that in order to demonstrate the functionality of the platform we do need to use access symbols however td ameritrade does not make recommendations or determine the suitability of any security or strategy for individual traders any investment decision you make in your self-directed account is solely your responsibility everybody thanks again for joining us here for our session on long verticals i do believe john will be back next time great to be here and discuss these things i hope you have a great rest of your week best of success you're investing and just a reminder to be careful and to be safe i mentioned this in an earlier session today i actually go for my second covid shot tomorrow i'm greatly looking forward to that looking forward to becoming free this would be a not not a great time to be sick so so be super careful let's get on the other side of covet is happy and healthy investors bye everybody thanks again and hope to see you next time we'll see you [Music] a master you