Trading a Smaller Account | Barbara Armstrong | 2-5-21 | Bullish Entries & Exits

Trading a Smaller Account | Barbara Armstrong | 2-5-21 | Bullish Entries & Exits

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all righty well hello everyone it's good to see that the gang is all here i see a lot of the regulars have already typed a greeting into the chat if you were brand new could you please like type a greeting in if you are with us live today this is i think an exciting class it is trading a smaller account in this class we don't necessarily walk we run for 45 minutes and do as much as we can to manage our portfolio well and profitably using guidelines that define our wrists so stick around there's lots of great stuff coming your way [Music] okay oops okay so i guess i need to bring my let me just fix up my powerpoint here oh sorry guys i just finished the chat with pat's class so i'm just getting myself organized here okay so trading a smaller account um i just want to greet everybody that's well i can't greet everyone by name but you know we've got um almost 200 people here in uh live with us today we probably will have over a thousand watch this over the weekend i don't know it's hard to compete with the super bowl but we're to do our best so hello to dpk robert charles layla burt michael anthony sal and white belt investor and mike and jessica and many others thanks also to mike fairborne for joining us in the chat today he brings a wealth of experience with him so if you have questions we hopefully between mike and i we have answers for you and for those of you who are new to the class um donna and paul and i can see there are many other newbies here steve thank you for joining us and i hope that you can put this on you know part of your regular rotation we kind of follow the same format every week so we're going to get right down to it because we have a lot of ground to cover first off many of you saw that i posted on twitter earlier in the week that we now have a journal available and it is linked to the upcoming webcast so if you didn't see that on twitter if you come out my twitter handle is at b armstrong underscore tda i posted this on monday of this week i'm going to repost it again tomorrow because i know that the shelf life on twitter posts you know things go through awfully quickly but if you come in and you click on these you can see you just want to go to webcasts under the education tab on either td ameritrade or on the thinkorswim platform and and then you're going to go to upcoming webcasts and you're going to go if you put in my name barbara armstrong as the instructor and whole portfolio management it just you know pulls gets rid of all the other classes and we have an excel spreadsheet here i have been waiting for so long to be able to share this with you so i'm thrilled that it is here and you've probably often heard me say if you want your trading to pay you like a business you need it to you need to treat it like a business and if you owned a starbucks franchise i can guarantee you you would be tracking you know what you did in coffee volume hot beverages versus cold beverages versus you know the food out of the um cases versus you know grab-and-go kind of stuff and what your profit margins are on all of those and so i haven't done it yet but i'm planning on creating a journal for our class so we can look back at the end of the year and see which strategies were the most profitable for us um and you know what in order to be able to tell that you can't just guess it really helps to have this kind of information right right say right okay so coming back to our powerpoint um you know i'm at b armstrong underscore tda mike fairborne am fairborn underscore tda there's lots of great content um if it's so someone has typed into the chat that it isn't showing the file you may be under archives you want to make sure you're under upcoming webcasts okay so no we trade a lot of options in this class so no options not suitable for all investors there are special risks inherent to options trading that can expose investors to potentially rapid and substantial losses so it you know you may want to grab a copy of the characteristics and risk of standardized options before we place any trade in this class we discuss what the risks are and what the potential rewards are also know that past performance doesn't guarantee future success and we look at lots of symbols in this class each and every week but that isn't to be construed as a recommendation on the part of td ameritrade or myself any investment decision you make in your live account that's on you my friends okay so now that we've got that out of the way know that all investing involves risk including the risk of loss okay so the link for the journal isn't on twitter you have to go to the webcast you know you have to go to education webcast upcoming webcast and then you can that link is live i was just pointing you to it on twitter because i can't post the live link on twitter trust me i tried okay so moving on to our class today uh market forecast um we always have a look at what's happening with the markets and you know what at the end of every trading day i post on twitter kind of where the markets were yesterday the s p closed at an all-time high so we're like very quick and dirty uh our market forecast on that we're going to manage our current positions because it's one thing to know how to trade right to know when to get in but the last thing we want to do is snatch defeat from the jaws of victory so we want to be able to if we have a profit capture that profit okay so we want to understand how to manage our current positions and then we always look at adding new positions okay so guys i understand you're having some issues with that i'll look at that at the end closer to the end of the class okay because i have so much i want to share with you i as much as i feel your pain i don't want to get distracted okay because i know the journal it's it's an awesome thing and i you know i'll make sure that we have a live link that you can get to and if it's not there now because we have had some issues with the td platform today that i do know for sure so if it isn't there you know by monday it'll be there okay okay so we're going out to the platform now where the magic like i like to say happens first thing we're going to look at is the s p 500 and when we look at the spx we can see that you know yesterday it hit a new all-time high and guess what today another new all-time high so this is a one-year chart um and so the market is pretty bullish i'm just going to remove all the other old drawings oops clear drawing set yep okay so the market's hitting an all-time high the ndx or the nasdaq tech heavy index no financials the nasdaq 100 oh all-time high and any guesses on what's happening with the vix uh yeah it's right back to where it's been you know for a lot of the last you know eight or nine months right sitting in that that the hood the 20 20 to 22 dollar neighborhood okay so you know volatility has come down so if we had met on monday we would have been selling stuff right because we had this nice pop in volatility um you know but today we're kind of back in the same range we've been and still historically higher than it has been but it's come back down a lot from where it was trading a week or a week and a half ago okay so let's look at our current account so we can see we started with a twenty thousand dollar account we're currently sitting at twenty three thousand so if you wanna look at your return year-to-date if you're up three thousand on twenty well two thousand it'd be ten 10 so you know we are up just over 15 and we're just over a month into the year so if you wanted to do the math and extrapolate that into an annual thing that would kind of blow your mind wouldn't it now keep in mind last week where were we we were down about a hundred bucks and the week before that we were up 1500. so what we want to do is um if we're if we have a three thousand dollar gain do we want to leave that on the table and and risk you know what the market give it the market can take it the way so we're going to go in today and we're going to reap some of those benefits okay so we're coming over to the monitor tab now trend trading growth stocks we have two one is workhorse and workhorse has been working like a horse because we are up 16 on that baby and we do have an exit on it wkhs um and we placed that trade last week and we talked about how it would have been nice to have gotten in a couple of days earlier but as it is i don't think anybody's tearing up that you know we got in it today or last friday so that one we entered last friday we have an exit on that one fcx is one that we had done exceptionally well on last year and it kind of you know brought a tear to our eye to have to exit that position but we bought it again and it had kind of gone a whole lot of nowhere it's had a nice pop today we're going to go go in because for some reason we don't have a stop on that and i don't know how we overlook that but we're going to create a stop for that three percent below the recent low and because we're pressed for time i went in ahead of time and calculated that 23 23.96

and we're gonna make that good till canceled because otherwise how much are we risking well we're risking over three thousand dollars and our rule in this class is that we have a um we have a uh 400 max loss on this class we don't want to lose more than 400 on any one trade our max position size is 5 000 and like i said we started with 20 000. so we're breaking our rules not to have some kind of exit here so we're going to send this in and how did i base that stop well if we look at fcx i just took a look at okay here was our recent low and we went three percent below that to just give it some room because what if it starts trading sideways well if it starts trading sideways we may decide that we'd rather employ these dollar bills somewhere else because we only have twenty thousand of them but um you know for now we still have seven thousand dollars available to trade and we have some other positions we are going to close out today actually several okay and i like to go quickly through this because if you're new today you'll be going well i don't have these paper money positions in my account to manage um we placed a trade last week on bank of america so we bought a hundred shares at 31.94 we're up a whopping 47 on that but we put a target on bank of america so sometimes you can buy the stock and say as much as we could do this as you know a long-term buy and hold i believe we put in a target and let's just go to our working orders of 34 dollars so when this gets to 34 or above we will exit that trade so it hasn't gone up a whole lot but we're looking at this previous high which was 34 dollars i thought i had edited this thirty four dollars and this is going to be our swing target so that is kind of percolating along and we've also put a stop in on this so we're going to show this on the right we're moving it up to 34 so now we can see this is our target and you know we'll have made a couple of hundred dollars on that but you know that's one percent of our account you know if we got in it at you know 31 where where did we get in again yeah we got in at basically 32 and we're saying you know what it's you know we we would gain 200 but if we could do that multiple times you know it all adds up especially when we have a small account okay so that's our trend trading growth stocks that's our swing trading stock and then we had a buy right covered call okay so here's and and we've said this actually several times in this class because we have managed to pick some really incredible stocks that have really moved and when we place this trade where did we get in this is apps and we bought this at 51 a share and we were paid 3.70 to sell the 60 call which is a pretty hefty premium so our net price to get in was 47.81

and the most we could make on this was the difference between the call sixty dollars minus the forty seven eighty one and i did the math so the absolute most we could make was twelve hundred dollars twelve hundred and nineteen dollars well we're at twelve eleven we can make another eight bucks if we stay in this for another 14 days so i think it's time to close this out and if we do the math and we say okay we were up and let's bring up our little calculator here so we were up let me close this why it's not letting me do that so i'm up twelve hundred and nineteen dollars and i'm going to divide that by our entry price 47.81 we were up over 25 percent on a trade that we entered well sometime within the last 30 days but where is it trading right now 86.92 okay you know what like i said if you go to a super bowl party on sunday and you said i'm so bummed i only made 25 on this trade i was in for the last three weeks um i don't think anybody's going to be handing you a tissue on the other hand we could have come close to doubling our money because we got in for under you know 48 or if we paid dollars for it we'd be up at 87 so substantially more but hey this 1200 represents a net six percent bump to our entire portfolio so as much as we're kind of going dang it you know this is a good problem to have right and if we have to deal with this problem again well that's the way it goes so what we're going to do is we're going to close out because we had to stop on this position because we were being responsible investors right we're going to just cancel it and then we're going to come in and we're going to right click and we're going to create a closing order it's saying that it's worth 6009 but we know we won't get that for it so we're going to go to uh 59 whoops 59.90 10 cents away from a max gain and hopefully that should fill we're down on the call because we sold the call so it's now worth way more than what we sold it for but our intention when we sold this call so we this is called a buy right covered call and i i taught this concept this morning and getting started with options so our intention with this was to get called out we were expecting it to be above 60 but obviously we weren't expecting it to go to 80 some dollars a share that that's a little painful but but we're now going to get out of that trade and that will free up you know six thousand dollars for us to put on some new trades okay so let's come in if this doesn't feel on its own within the next couple of minutes we'll go in now let's come down to our short put so is everyone familiar with what a short put is yeah so what's our trade fee well we have to pay 65 cents a contract to exit it there's no charge to sell the stock so when we sell a cash secured put what we're saying is um and let's look at gm so we have 85 of our max gain on that and so you know we're saying that we would agree to buy general motors at any time between now and february 19 for 48 a share well it's gone up to fifty four dollars a share and now that put that we were paid a dollar ninety three for is only worth twenty eight cents but it's kind of tying up some money in our account we you know do we really to hang out and risk losing 164 dollars to make another 28 bucks i say close it out so you guys if you want to put a vote in um you can go in and vote but if we've got 85 percent of our max gain and we can only make 28 dollars more wouldn't we rather use that money to place another trade where the gain might be higher than 28 dollars so we're going to create a closing order to buy it back and we'll give them their 29 cents okay does that make sense okay if not i will post a link at the end of this class to the getting started with options class that i did on short puts and i'll walk you through the next one so here we have snap uh is it snap that's up at oh yeah snap so we've got 97 so we sold this the 50 quote we said hey at any time between now and february 19th we would be happy to buy snap for fifty dollars a share now the reason that we sold the 50 call was because we can't do more than a five thousand dollar position and the fifty dollar call would put us if it was put to us at fifty dollars so when we put this trade on i think it was already trading close to 60 but now that thing is worth 10 cents really we want to stay in a trade and risk losing giving back to the market that 349 dollars for the chance to make 10 cents i don't think so i think we'll take our 97 of our max gain we're going to put that in our pocket and take it from being an unrealized gain to a realized gain in our paper money portfolio and if we want to come out and look at our our chart like so here's gm and our put was at the 48 level right and now when we come and we look at snap we put this on the chart so we had this put that we put in here pardon the pun we sold this put here and at that time it was trading around 53 so we sold the 50 put at one point it was actually you know in the money big day today so obviously a good earnings announcement and um so we're buying that one back right click create closing order we're going to buy it back 65 transaction charge kaching now of course you know with this we could you know buy some party platters paper party platters for our super bowl party on sunday how do you like that paper platters okay and so that's uh plug that snap well we got the same thing with plug we've got 88 of our max gain unplug and you know how long do we have to go uh yeah we're down to 40 almost 90 percent the 50 oh this was the one i think with plug um where we had we couldn't sell a put that was higher because 50 was as high as we could go and plug was something we traded a lot last year when it was more in our snack bracket um but the darn thing has gone up so much we said well we're kind of loving plug could we sell that 50 call and we could look at this and say okay so it's up a little bit higher than it was before maybe you know we'll close this trade out but we could maybe look at putting a new trade on plug and maybe going out to march and would there be enough premium for us to sell a 50 put again so but we're going to take our money and ring that register um for our 328 and this is one of those things so you might say well you know what i could make how much more you know another 44 dollars yeah but you're risking losing the 300 and some that you've already gained and is that a good risk return yeah so some people will say like hey when i've got 80 of my max gain i'm going to you know ring the register when i've got 90 some will say i just like to let it expire worthless but you never know what can happen right so you know others will kind of look at it and say and some might say so if we come and look at workhorse for example so it's a it's one that we decided to do two examples one we bought the stock we're probably pretty glad that we did because how much are we up on the stock um but today it looks like it could be pulling back so you know although we've had three one day pullbacks here so it could just be a one day pullback and it continue on up so here i like to run a democratic class so with workhorse we have 60 some percent of our max gain i only enter and exit trades during the class so do you want to take our 60 and ring the virtual register or do you want to hang out for a little bit more so you go ahead and type into the chat your vote and whatever the majority rules that's what we'll do when we come back to the monitor tab on workhorse we're up 171 dollars so this is oh sorry workhorse no we've got two thirds we've got 64 of our max gain we placed that trade one week ago so in one week we've got 63 so we've made two there's one dollar left to go so so far i've got two hangs in one exit so i'll give it another second we have oh this is just our exit for ba c hold it hang close sell hang close hang close i wish i had two of these because you know we'd close one and it looks like we're getting more closes so i'm going to go ahead and close that one out so i you know what i don't recall how much in total that came out to but it was probably it's got to be close to a thousand dollars which on a twenty thousand dollar portfolio you know that's not a small deal right and i know sometimes people will look at a number especially if you have a larger account and you're looking at smaller numbers and think 191.50 if this were in a real account

you know that still can buy a lot of groceries right you know where you can put it towards a trip and you're your next pair of skis or bike or you know whatever it's it's actual money it's not just a number yeah so we're using thinkorswim and so we're going to go ahead and we're going to close this so create closing order let's see if we can get out for a dollar ten and there we go so there went all our shorts so we just managed in about 15 minutes we looked at about eight positions so that's a lot right yes this will be in the archives there's a question of whether or not this will be in the archives it sure will okay and again these are paper money profits um and so you know what the mark and like i said what the market give us gives us the market can take it away now if you said you know what i forget what i was paid for plug to begin with just for if somebody's new to think or swim you could come here and this shows us everything we've done for the last 36 days so we've been pretty busy but we could type in plug and then it would just show us that you know what we had bought two of these and remember last week we closed one at a dollar ninety five we were being more conservative and then this week we closed the second one so the second one we were up three dollars and something on the other one we were up i don't know two we were up 240. and so in this one we were up about uh about the same you know 2 2 30-ish 227 so then you can kind of see exactly when you got in and when you got out if you got out and then said oh what was that how much did i make on that again so you know you can check it out there okay so let's move on to the new stuff we've got about 20 minutes um and man oh man i got a lot you know we don't usually have so many things that we want to close out on um at the same time so one if you um follow my building blocks for a self-directed portfolio which you know if you're not doing you may want to check out yesterday we added a position on exxon mobil and you may say seriously an energy stock barb well okay the energy sector is up over 40 in the last three months i know it's kind of crazy because um it you know the energy sector has been like the sad sister for the last decade it has had a lock on last place and as we can see when we're looking at a one-year chart you know this has really been down trending and then all of a sudden you know when we look at the last six months it's really started to move to the upside so you know we added this stock to our portfolio one of the things that was appealing about this was that seven percent so when we look at this seven percent and we say okay you know we could just add it to our portfolio right we could just you know buy a hundred shares and put it in our portfolio it's 49.97 it's right on the line or we could do a synthetic so white belt investor is saying is this at resistance at 50 so it's kind of yeah knocking on that door so you know a good observation you know mr white belt investor so if we kind of look at this it's kind of coming up on that isn't it so if it pulls back you know would we be concerned so we might say well i'd rather wait until it goes through of course we only get to meet once a week and so you know what we could do on this is say you know ultimately we're bullish on this oh there we go we got rid of our apps so if we're bullish on this and you can see now we have an extra five thousand dollars to play with it's gone up to thirteen thousand we could do a synthetic which says we'd be willing to buy the stock at 50 and if we're expecting it to go up we're buying so we're selling a put at 50 and we're buying a call so exxon mobil in their earnings announcement it was the they had four losing quarters in a row row um first time in 40 years that's happened they have committed not to cutting the dividend and have said they'll cut expenses in other places they have also said so they've committed to that dividend now does that you know does that mean that absolutely they can't end up having to cut it no but does it mean when you know people are looking at safer places to put their money in saying you know if i can get seven percent here and this stock is continuing to uptrend and you know if we take a look at this it's up about what the energy sector you know has been up on average you know it's up about well that's 60 percent so to here it's up about 60 in you know the last 99 days so you know three fat months three months in a bit yeah yeah this is like the rocky stock i like that comment you know um so so anyway if we looked at this and said you know we're not loading up our portfolio with energy stocks per se but if we said you know what um with this being so robust and bonds paying you know dinqua interest wise you know maybe this has got a shot so you know and could we do a buy right on that we could but the premiums aren't quite as rich um so if we come i was looking at some other options opportunities here so you know if i looked at doing say selling the 52 and we went out to march the 5250 yeah they pay us you know a dollar 17 but it's trading at 50 right now so we'd be up you know 250 plus a dollar seventeen so that's still over three hundred dollars so we could absolutely do that and three hundred dollars that's six percent for a trade that we would be in for you know ostensibly 42 days and we'd own the stock so i don't know if there if a dividend has already just been paid or when the next one is coming up um you know so we might get a dividend payment um but if we haven't done a lot of synthetics in this class which is we're going to buy the call and we're going to sell a put now we could either sell the 50 put saying we'd be okay with owning the stock at 50 or we could sell the 47.50 put

which means we're going to have a small debit but it's going to be a small debit so we're going to do that so we're going to come in here we're going to right click and we are going to buy a synthetic which means we are going to buy the 50 call and then instead of selling the 50 put which would give us an 85 cent credit we're going to be a little more conservative and sell the 47.50 which means we've got to pay 34 cents okay confirm and send i think we have a synthetic group we do so we're going to send that one in hope we get a fill on this one okay the next one i want to come up and look at and you know what the one that we didn't look at under activities and positions was neo so neo we're currently down on and we're not down on very many stocks are we but we're down on neo and this we sold the 50 put it's currently trading at 56.27 and we sold that put for 380 and it's trading now for 4.05

even though the stock is you know 6.27 above we're out to march so time decay is still you know kind of dripping along you know it's not running but if we look at neo it's been kind of consolidating so why did i go back and bring up neo well because my friends we're going to look at lee and who is lee and i know a lot of you may already be familiar with lee otto but lee otto is also in the chinese ev electric vehicle car space and it's been kind of you know trucking along and so this is one that we may want to watch because it's been consolidating if we come over in and because we're running in this class we don't tend to spend as much time here on the td ameritrade platform typing in stuff like lee and then having a look at you know the numbers but the smart score on this is a nine so i encourage you to click the view more details and have a look um you know there's all kinds of articles on lee you know it's pretty heavily traded right like this is a light day for lee and it's traded almost 10 million shares um you know only seven percent is held by institutions so we're on the light side there but lee's january deliveries rose by more than 350 percent so you know you may want to come in and look at some of these articles but i'm bringing this up because what we may want to do is have a look at at putting one putting this on our radar but two we might say well what if it behaves like workhorse or several of these other stocks where went up so much that when we come back to look at it next week we've missed the entry so we could look at this and say hey if this goes above this line here say above this 3450 line we would like to buy the other thing we could do is we could sell a put around that 28 level now it's sitting and in here you might say hey you know what if this goes above today's high like assuming this was the close of today and this is a little more aggressive if we were meeting again next week on wednesday and we didn't have to wait a whole week we might not do this this way we would wait for the bounce but if we said okay the high today is 3097. so if it goes 10 cents above that so if it goes to 31.07 get me in and i'd like to sell the we could sell the 29 put and if we come and we look at what's the 29 put selling for if we come out to march it's 2.64 cents now would we get 264 not necessarily because if it goes up above 3107 you know that's you know 70 cents higher this will be worth a bit less but if we said you know we would be willing to do that so what i'm going to do for this i'm going to tee up this trade so you can see how we've done it but if i were doing this in a live account not a paper money teaching account what we might want to do is just say hey you know what i'm going to come to the chart and i am going to put an alert on then say hey when this hits 31 create an alert and we're gonna say you know sell a put or using trader speak short put short putt short put question mark question mark and some might say like don't you think we should wait for it to break above here maybe we should but you know it could be a couple of weeks doing this before it breaks out okay so but if we just wanted to go in and t that up now we could come out to this 29 put are there others selling this put well there's a two cent spread there's almost 3 000 contracts on the book so we are not the first people to have this idea right now if you were more aggressive you could just say i'm just going to sell it today because i think lee is going to do just fine so if we wanted to do that we could just come in and sell the put and that's what we did actually on apps i believe or there was another stock i forget because we've looked at so many so we could just come in and say we want to sell just a single put for 263. um and so we're going to just go in and go ahead and do that now if we wanted to be more conservative so that would go in our short put group if we wanted to be more conservative we would come out and we would say okay i want to sell and sometimes this has totally saved our bacon my friends we want to sell when i wanna and and to me this is the easiest way to wrap my head around it you can also do set this up other ways we're gonna make this good till cancelled i want to get into this if and only if lee goes above 3107.

31.07 i'm gonna hit save so i want to sell the 290 um the 29 put it you know if if and when lee goes above 3107. and why did we pick 29 well we picked 29 i'm going to move this up because in the surveys last week somebody said when you get this confirmation screen can you move it above the ticket so that i can see both so i thought that was a good idea so whoever put that in the chat in the um survey thank you for that so we want to sell one the march 19 29 put when lee goes at or above 3107 our break even so they're assuming it's at the current price 26.35 the most we could make is what we sell the put for how much could we lose well if lee went to zero that's what we would be out okay so we're going to tee that one up and we're not going to hear that one phil unless it goes above 3107 by the end of the day so yeah so these you know are not this is an intermediate level class so if you are brand new to trading options this is totally going to be like drinking out of a fire hose guys but i encourage you to keep coming back and i'll put links to short puts and to buy rights at the end of this class so that you can go back and watch the introductory class to it okay okay so that was lee um the next one i wanted to look at 142. uh we are running out of time oh and so this is a tech stock semiconductor tech has obviously been strong over the last um year although you know energy has kind of kicked it to the curb a bit um you know but it's just kind of been slow and steady i call this a sleep at night stock because it's just been like marching up that hill right and if we come to the analyze tab it seems to be well reviewed we can see you know it's a semiconductor stock and if we come out again here so i you know we don't do a lot of research in this class because we're placing a lot of short-term trades but even if you're placing a short-term trade you might want to see how the market thinks about it because if you have every analyst all of a sudden saying sell or downgrading it what are the odds that it's going to continue uptrending for you you're kind of trying to swim a little bit about the the the current right so you know eve is saying that you know her paper money on positions have been treating her well so we're going to come in and we are going to look at you know this is at 38.44 so we could just at buy a hundred shares we could come in and say you know hey we wouldn't mind owning this stock and having somebody pay us to buy it so you know if we came out to march we can look at you know some of these options and it's interesting because we're not seeing huge volume but we're yet we're still seeing that we've got interest right and we don't have a very wide bid ask spread on these so for this one the spread actually is quite narrow given um the number of contracts that we have here so it's trading at 38.42 so if we kind

of come in and we look at this we could say okay we could sell this 36 so that's kind of at the 30 or at the 10 day moving average it's below today's level which is considered a first support level it's kind of below these three here where it consolidated for a few days and if it's up trending and it came back and it was put to us at 36 would we we would be okay with that and if the answer is yes um then we can say you know let's go ahead and do this at 36 and again we're in here for 42 days and then someone else might say but you know if the most i can make is a dollar ten on this if it continues to move to the upside you know i could you know do even better by you know doing a buy rate by you know i could make two dollars here where i'm only gonna make a dollar ten here do you see what i'm saying so because if i sell that 36 put the most i can make is a dollar ten i have the money that i can use in the account if i come and i sell the 39 or even the 40 if i think it's going to go up to 40 you know i could make well let's see we're going to come to buy covered stock 36.84 so we could make three dollars and 16 cents and if we say okay if i can make three dollars and sixteen cents 316 and i'm going to divide that by 36.85 would that be worth my while well that would be an 8.6 return so if we look at that and say well you know what um you know that's a potential gain of 300 and but it has to go up by how much by a buck 50. this one it could go nowhere and you know if we sold that 36 we'd still make our our dollar 10. so we're gonna go with

the buy right okay and we're also going to put a stop in because we want to define our risk so if we said okay we're going to use the 30-day moving averages support at 3566 times 0.97 3459 would be our stop and what are we paying to get in 36.87 so we're risking like 200 and something dollars on that okay so we're going to come single order first trigger sequence right click create opposite order um we're going to make this a market order because we don't know quite what the call would be selling for good till cancelled when do we want to get out well if it goes in the wrong direction and is at or below 34.59 we're going to shut her down 34 59 we want to make sure that shows up down here equal to or less than make sure you've got it less than not more than or you'll get out right when you get in so and the goal here is the goal for us to own the stock in 40 days the goal is to be called out now if it goes up a lot we may regret selling that call um but if we've made a an eight and a half percent return in 40 days you know there's that kind of do you want to be greedy or do you want to just you know keep going little by little and mia i know that i'm going quickly but you know what if you this will hopefully be posted by the end of the day today if you go back and watch the archives the thing i loved about it when i was a client because i started here as a client was that i could back it up and watch it again i could just stop somebody and then rewind it and play it again and so if there's something that as we're going through this you want to re-watch just make a note of the time and then you when you get to the recording you can go right to the part you want to listen to a second time and this will you know this flow will feel more comfortable so we're selling a hundred shares here so we're buying a hundred shares and we're selling one call so typically with an options contract one contract represents 100 shares so we're buying the stock selling the call at 36.86 if the stock trades below 34.50 we want

out most we can make 314 most we can lose is if the stock goes to zero we're paying 65 cents and by the way if we get stopped out there's not a guarantee we'll get out at exactly that price it will trigger a market order okay so guys we are running over there's another class starting in just a couple of minutes we have done a ton right mike in this class so we have exited what like five uh four or five like look at all the orders so we did a buy right on o n we sold a put on lee we did a synthetic on exxon mobil we closed our position on apps where we had a buy right 25 gain on that and then we closed our positions on workhorse plug snap and gm we added a stop to one of our trend trading growth stocks so man if your head is spinning you know it it's entirely legit because we ran through this class so good for you for keeping up thank you for being here if you could do me a favor if you enjoyed this hit the like button if you haven't subscribed to this channel you may want to subscribe because there's lots of great content you don't want to miss it don't forget to follow mike and i on twitter at am fairborn underscore tda at the armstrong underscore tda and if you're catching this in the archives if you could do me a favor and just put a comment in let people know what you liked if you have a question pose your question i'll get back to you quickly on that i look at these every single day all the comments on youtube but it helps other people find great content like this and if there was a survey i didn't notice it but if there was i promise you if you fill it out i promise to read each and every comment so guys um that's a wrap know that we looked at lots of examples today they were for example purposes only um not to be construed as a recommendation um in any way shape or form and uh have a great weekend enjoy the super bowl stay safe and i will look forward to seeing you in a webcast coming in soon take care everyone bye bye for now

2021-02-13 16:49

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