Trading a Smaller Account | Barbara Armstrong | 4-23-21 | Trade Management & Short Put Verticals

Trading a Smaller Account | Barbara Armstrong | 4-23-21 | Trade Management & Short Put Verticals

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all right hello everyone happy friday welcome to trading a smaller account so i applaud each and every one of you for taking time out of your friday afternoon to join us for the better part of the last a trading hour of the day and of the week lots of stuff on the agenda today so we're going to look at trade management so it's a critical thing not to know just how to get into a trade but how to know then to get back out of it with a profit in hand or to manage your losses should you have one so that will be part of our conversation and then we're going to look at a whole slew of new trades as examples with a focus today on short put verticals so stick around lots of great stuff about to come your way [Music] all right i want to welcome everybody who is joining us live this afternoon thrilled to have you all here uh special kudos i have to scroll up because we've had a lot of action in the chat already hello to hero and timothy special kudos to the two of you for being the first ones in hello to neil and michael and charles and emmy and vijay and lyle and scott and e dan rocky raccoon and the rest of the gang thank you all for showing up each and every week and making this such an exciting class i'd also like to thank thank brent morris for not only being here but being in ahead of time to greet everybody he brings a wealth of experience with him and i love having the opportunity for us to work together um somebody made a comment on netflix i was actually looking at netflix about 10 minutes ago so it's been an interesting stock this week like nothing like you know doing well on earnings and having your stock go down and you know we see this happen um more often than not and you know you can just shake your head so there we go anyway we have a lot to cover today as always so you know what i just want to take one second i just want to make sure we aren't interrupted okay so here we go um yes so if you have questions please type them into the chat this is a very interactive class it's also an intermediate level class so you know i teach it getting started with options on friday mornings and in that class we walk we're walking at a brisk pace but we're walking in this class we tend to run and you know where the assumption is that you already know what these trading strategies are if you don't understand what a short put vertical is i will put a link into the introductory class at the end of this and it doesn't mean you know you should sign off and go away but let me know if you don't understand what it is because we will be talking about short put verticals today and i can give you a 30 second overview otherwise i'm going to assume everybody understands them and and we're good to go if you have questions and you're watching this in the archives as hundreds or thousands of people do and you have a question you can type it into the comment section i do look at those every day and if you just want to say hey i loved it you're welcome to put that into the chat also um and hit the like button it just lets people know other people know that you enjoyed the class and helps us get this great message out to more people also you can communicate with both brent and i on twitter and so you can see the bluebird from twitterville floating on my screen up there my handle at b armstrong underscore tda brandt's is at b moore's underscore tda and we both post a lot of useful content that you might like helpful if you take the time to go check it out okay so that's that let's get through our important information so we can get over to the uh fun stuff know that options not suitable for all investors there are special risks inherent to options trading that can expose investors to potentially rapid and substantial losses also know that multi-leg option strategies like spreads which we're going to be talking about today can have more robust transaction costs and we have to take that into account as well we use lots of different ticker symbols in this class we have built in our managing a an example portfolio so in order to demonstrate the functionality of the platform we use lots of actual symbols but that's not to be construed as a recommendation on the part of td ameritrade or myself any investment decision you make in your live account that is on you my friends and know that all investing involves the opportunity for not only gain but loss okay and we discuss both of those in this class okay okay so today we're going to have a quick look at the overall market i know that many of you attend several classes throughout the day so i'm going to make that short and very sweet and then we're going to review and we've got some management to do on some of our example positions and then we're going to look at adding a bunch of new trades i've got six of them lined up here i'm hoping that we'll get to four so are you ready to buckle up if you're ready go ahead and type into the chat i am ready okay and and um tijuan um i will give you a quick review on short put verticals when we get over there okay so market forecast drumroll please and we are over to the spx you can see i had our our friend that we have mixed feelings about these days neo up and you know i've created a study for market forecast right here um and so the kind of idea with this market forecast is we're looking at the green line and the guideline that we have decided to go with in this class and we'll see how this plays out is that we are looking for this green line this line here to be either uptrending in the 20 to 80 or above the 80 in order for us to trade bullishly now if we want to trade bearishly we'd get the bearish go ahead if this line was down trending in the 20 to 80 or hanging out here anywhere below the 20. so you know this says you're okay to run with the bulls now just because you're okay to run with the the bulls does that mean every strategy has to be super bullish like all we're going to do today is long calls no in fact i said today we're going to look at a bunch bunch of short put verticals which are a bullish but can be a bullish to neutral strategy okay so that's that now you know when we take a look at this index also the s p 500 last week it was like almost you know snoozypalooza it's like okay market's hitting another new all-time high new all-time high and this week you know we had two days of pullback it's kind of consolidated but it is like within a hair of that all-time high and when we look at the ndx as we all recall you know it had a more significant pullback in february but it too it hit a new all-time high last friday and doesn't this pattern look pretty similar to the s p 500 and then if we come and we look at our friend the russell we can see that it's been consolidating a little longer you know and some might say hey was this a bit of a double bottom setting up maybe others might say could this be a head and shoulders pattern but you know what i see given none of those patterns is complete is i do see as a series of you know we've got some higher lows going on and we did have a lower high so if we came back here you know a bit of a pennant pattern which it may be breaking out from but you know technical analysis sometimes i think it's like a bit of a rorschach test and i've posted on twitter this week several pennant patterns i don't know if you've seen them or not just pennant patterns but but different patterns like double bottoms and i've given three or four different examples and if you haven't checked that out you you may want to do that okay so and then here's our volatility index today plummeting like down nine percent so what does that mean it you know the way many people interpret that is there's a lot of confidence in the market and confidence tends to be translated into bullishness and and we're seeing that on those major indices today okay so let's look at our portfolio so and and let's just kind of go through from uh top to bottom oh this was from yesterday's class we bought a position in an insurance company yesterday um that filled today so we've got abr now if you're not familiar with abr abr is a mortgage reit it's part of the financial sector we bought that position back here it's breaking out to the upside we do have a stop on that position it's just ticking along and and it's doing just fine when we bought that i think it had almost a 9 yield i mean the stock has gone up it's now at 7.67 and we don't get to see the benefits of this you know translated into the profitability on our account but we but you know this is appealing if it were in your live account that it pays this kind of dividend and is up trending to boot okay so the second one uh mos and i just said boot now i don't think i have an accent but a lot of people says that that outs me as a canadian when i say words like um yeah boo okay so here's um m-o-s and m-o-s you know we don't have a huge profit on this we were actually in the hole on this one yesterday slightly we bought this one for 33.55

it's up about 40 cents we do have a stop on this position also so if you're not familiar with mosaic if you come to the analyze tab you know it's pretty highly rated it's in the materials sector which has been pretty strong the last six months and we have a target on this of 37. so we bought it and you know our timing wasn't perfect but we only get to meet twice a week or once a week rather so you know the ideal entry would have been right when it broke out above here or when it came back and retested um but we're in it and we have a target and it's kind of clipping along okay so we're leaving that one as is now nielsen n l s n this is in our buy right now sn excuse me this isn't our buy right bucket so we bought this sold a covered call against it and it pulled back and so we bought the covered call back we sold it for 75 cents and then we bought it back for a dime and then we sold another one for 75 cents and it's so this is bouncing off a support level it's been going kind of a bit of a whole lot of nowhere right but if we can keep selling covered calls and making 60 70 cents on a 25 investment um you know sooner or later that can start to feel like real money so when we come over and we look at this we have an exit on this position if it goes against us we do have earnings coming up at the beginning of may on all of these and we can see that the second covered call that we've sold is you know it's kind of clipping along we do have earnings coming up which will keep those prices maybe up a little bit on the on the call but that's just kind of bubbling along doing what we're expecting it to do it shows that we're down here about 57 on this but when you take into account the 60 or 70 dollars we made on the last call were we to choose to exit we'd actually be out with a very slim profit now cos um cisco um so this is interesting we have a synthetic on costco so what is a synthetic so you know it means that we sold a put it's a bullish trade we've sold the put and we've bought the call now often when we look at law i'm going to type this into the chat so let's pay i think this is important so if we look at long call management which is just you know one half of this trade you know often we'll have a target and we'll have a stop so we have an exit on this position but and and we only have one contract on this but if we look at this there are some kind of mid management um example rules and one is now you guys probably know where i'm going with this if you've been with me for a while i'm just gonna bring this down so you don't keep losing you don't need those okay so our mid management rules if we have two down days in a row uh exit the trade now why might we do that if we have 30 or 40 days it's you know it's not going in the right direction this is to be a bullish trade and if it's moving bearishly that's not a good sign another mid management rule might be if it doesn't move half the distance in half the time it exit and what do i mean by half the distance well if this is a bull flag set up and we're expecting a seven dollar move in 14 days well if it hasn't moved 350 in a week um this is actually the smaller account sorry i have two accounts in this so yes we didn't you know go up by a thousand percent or whatever that would have been so we're at 21 145. on this account okay so here's nielsen i do a building blocks so there was a question in the chat because the balance of the account does seem to go up miraculously um in a week but i actually have two accounts under under this example id number okay so with cisco if we come and we look at the chart you know we got in on this day when it was breaking out and you know it's kind of gone a whole lot of nowhere right and so when we look at this and we say okay well immediately we had two down days in a row but then by the time we met on friday it was really moving to the upside so we hadn't exited but it's kind of been lollygagging about hasn't it and it's basically kind of where it was when we got in and so if we look at the short put side that is no problem for a short put because as long as it stays above our our put strike we're golden it can lollygag about all at once and we still have a profitable trade but the problem is with the long call if it doesn't move up and move up within the time frame we expected theta will eat us for lunch and theta has been snacking and so someone had typed into the chat try legging out so i like to run a democratic class when we come back and we look at this and i know there's a bit of a lag when we look at this trade the short put is up by 53 dollars but the call is down by 69. now if we wait till monday theta is going to chip away at the value of the call um now it could go up dramatically monday and we could be going snap but if we if we are trying to follow a set of guidelines this has not moved um in the time frame we were expecting hasn't it so the idea i was going to put forward is how about buying getting exiting the call so selling our call and then leaving our put intact yeah so it there's a question in the chat asking if i cover management rules and getting started with options i do on occasion but with every single class that i teach in getting started with options there's a companion class to that and so like if you really like synthetics um james boyd teaches a class every wednesday morning at 11 o'clock eastern just on synthetics yeah so so yeah so theta do we really want to feed the theta monster no we do not not with our long positions we're happy for them to come and chew away at our short positions because we want those to go down in value right okay okay so yeah so we are going to close and and let's just try this so i'm going to come up to the monitor tab our working orders and on cisco we have you know a thing to get out so we did have both a target and an accent and our target was 57. and you know we're we're at 52.

so theta is um the greek terminology for time time decay and when we have a long option time decay it time is our enemy when we have a short option time to case still erodes at the value but when we're selling something we're selling it with the expectation that it will go down in value and then we will buy it back for less so time is our friend when we're selling okay so we are exiting this with cisco and so i'm just going to cancel this exit and then what we're going to do is come down to the monitor tab and say you know what why wait until it erodes more of this value on the call we are going to right click create a closing order to sell that call and then we're going to leave the put in place so we're going to sell that let's see if we can get the mid point for it and we're selling this notice up here it says to close so you want to make sure that there hasn't you haven't hit something inadvertently that you're in fact not closing the position and then when we come back to our monitor tab and we can see that we no longer have the call we have this put we could say you know what when we've when when it's you know worth say 12 cents or 15 cents we've got 90 of our max gain out of that why not exit this position so we're going to right click on this now create a closing order to buy back that put and at what price um let's say 15 cents good till canceled so when we've got the majority of our pro profit why hang in there and i'm going to leave that in the synthetic bucket just as a reminder that we did have a long call that we chose to close now we're going to come down we we did an example we tried to put in that we we were looking at a short put vertical but we couldn't get the credit we wanted um in the time frame we needed because we didn't want to trade a short put vertical over earnings so we did a long call and then we did a long call vertical so you can or so you can see our long call vertical actually has more profit than the long call so what does that tell us lollygagging so if we come and look at the chart again we entered this position on this day as it was breaking out and let me just back the truck up a little bit you know what we saw here was a diagonal resistance breakout that happened here and then we saw kind of a a bit of a double bottom pattern and said hey you know if we look at this you know or that we were expecting a move up to here but we got in and it's kind of it's been up and down and up and down have we had two down days in a row no you you would think that maybe apple knows you know what our set of guidelines is because we haven't had two down days in a row but this baby has not moved up in the time frame expected it's gone kind of a whole lot of nowhere hasn't it and so who is raising their hands to say you know what um do we really want time decay now we're just on the eve of earnings right earnings is the 28th which is next wednesday so this could go up dramatically but it could also go down dramatically and you know the last earnings i think it had a pretty solid earnings report and it's still well from there it precipitated this fall yeah so um yeah i have a lot of words i'm not sure that they're real like lollygagging sorry about that um so if we come back to our monitor tab we can see you know that we we have the may 14th 470 call it's up a whopping 22.50 but we have a small profit on this now theta chips away at the value of our option whether the market's open or not so even if the market opened at the same price on monday you know we're going to be most of this profit would be gone because we'll be down you know it's going down to the tune of about nine dollars a day so it's down 18. so if we've had a nice update today we might just say you know this isn't moving in that in the direction that we were hoping as quickly as we were hoping um so under rule number two if it doesn't move half the distance in half the time we're out so we're out on this one okay so we're going to hit our cell and we're just going to cancel this one and create a closing order and how do we do that well we bought it to open it so we're going to sell it to close and you know it's saying okay they'll give us 4.90 okay

now the other one that we did on apple because we wanted to compare and contrast and i was hoping that apple would go up dramatically weren't we all and that we could show how a long call when something is moving up dramatically can earn us more in a shorter time frame but you know as it turns out the long call vertical and we sold this at 130 and 135 now this is a may 21 expiration so as long as this it's at 134 134.71 so it's almost through both strikes which would give us our max gain and at expiration would be worth you know almost five dollars which would give us a return of almost a hundred percent you know because what are we risking 245 so we you know exited on this side on this short put vertical we're actually up a higher percentage and theta remember was theta was almost nine dollars a day because we have both a long strike and a short strike it really mutes the impact of theta or time decay so we are going to just leave that one leave that one to percolate and then the last one in our kind of um in our in our category of you know the lost children we had sold a put on this we had done a short put we received three dollars and 80 cents we talked about this so if you want to see how we mismanaged this and how we could have managed it differently and will manage short puts differently in this class going forward um you know we are now down eight almost 900 on this up 152 today when we looked at this last week we were down 12 or 1300 we do have an uh an alert on this position and when we bring up neo and if you go and look at the news on neo there were some interesting things that they announced that they may announce their your their expansion into europe um the first week of may the analysts are expecting that their revenues will post at 400 percent year-over-year as far as growth in revenues still operating at a loss much as tesla did for quite some period of time and the big news is in them in the last day or so csla has rated these this stock a buy with a target of 50. i put our break even on the chart now does the market care about our break even not even a little bit but we can see that what we have here is a triple bottom so it's hit oops i don't know why that came up once twice and three times and now you know we're looking at a diagonal breakout and a move you know finally above that 30-day moving average but it's not like this is out of the woods yet um but you know if this was to break below 34 the only reason we don't have a stop loss on this is because we didn't want to risk getting what i call nicked out on a wick what do i mean by that well sometimes you'll have a day where a stock will have a huge range and it'll come down and then you know it could hit our stop and then by the end of the day it's up significantly and so for that reason until we get past earnings we have chosen to have an alert as opposed to a stop okay so that's it for our trade management um now let's on to on to the new so the first one that i want to look at is adobe and i did promise for those of you who are not um yeah for those of you who are not familiar with a short put vertical we'll briefly go over this strategy there's another question in the chat saying these long management rules are these for any long option position um specifically we tend to apply these more for um well two down days in a row long calls or the long call portion of a synthetic sometimes you might choose to exit your synthetic position if things aren't kind of going according to plan if this were a long put you know the second guideline would stay the same the first guideline would be if you had two up days in a row okay we haven't done as many as many bearish trades as bullish trades in you know the last year because the market has been pretty bullish so here we have adobe you know if we so here's the idea of a short put vertical um the kohl's note version is if we see something that is bouncing and we have a bowl flag pattern here we also have like a diagonal double bottom breakout but the idea is if we believe the stock is going to continue to go up and you know that's looking at the charts one might excuse me let me have a quick drink we might expect that we would come here and sell a put now when we sell a put what does that do it obligates us to buy the stock well this stock is trading at over five hundred dollars a share and we have a twenty thousand dollar account so we couldn't take the risk of having the stock put to us of having to actually buy it so in order to define our risk we buy a put underneath and you know if we have a five dollar difference between the strike we sold and the strike we're buying now buying a put allows us to sell the stock so i don't know i've got this tickle in my throat all of a sudden excuse me i have allergies and tis spring i don't know what to tell you okay so this five dollar wide spread it takes our risk if we sold something around the 500 strike of being 50 000 by just selling the put to being five dollars a share you know or five hundred dollars less what we get paid for for the put that we sell and this we call a short put vertical why do we call it that because we it's a selling strategy so it's short and we're selling and buying a put and this is considered a bullish strategy so if adobe goes up are we smiling yes we are if it goes sideways are we smiling yeah we are because as long as it stays above the sold strike we're good to go in fact if we can come in and sell the 500 it could even come down by 15 17 a share and we would still have a profitable trade yeah so we're going to put on several of these trades today i see a question in the chat about mid management rules for these we'll talk about that next week because we really only have 15 minutes left and if we want to put three or four of these on we're gonna have to be kind of booking okay but i promise that i will come back and i actually if i can find it in the archives i i did an entire class just on the good the bad and the ugly in trading short put verticals and and all the different iterations on what can happen and i'll put a link to that in at the end of this class because that's you know worth watching okay so if you didn't catch it the first time okay so if we look at this at 517 you know could we come down to this 500 so you know we've got about here you know a 25 cent spread is that okay well if we said we'd be willing to go up to 10 that would be 60 cents so we're good to go we've got 468 contracts our delta is 29 what does that mean it means we've got a 71 chance that on may 21st this would be at or below um at or above um the 500 strike and this would expire worthless and we'd have a profitable trade now are we anticipating um staying in this trade until it expires worthless no we are actually going to put in an exit right out of the gate now i'm going to bring up the calculator and we're just going to do this very quickly so what's the most we can lose here 2.50 a share

minus the 70 cents so if i take a look at this 70 cents and i divide that by what we're risking which is the 250 minus 70 right 180 so i'm dividing that by 180. my return on risk on this is 38.9 approximately and so if we look at this and we say well as a rule of thumb if we're going out 28 days if we want at least a 28 return on our risk now some people might say i don't care how many days i'm going out i want at least a 30 return on risk well then you know we'd still be okay with this one we're going to come down here to advanced order it's right above the arm and armstrong but we're going to come down to this advanced order click single order make it first trigger sequence we're going to right click create an opposite order and say hey when this gets to the point where it's worth i'm going to round it to 70 and say when we've got about 80 of our max gain when this is worth about 14 cents we're going to take our risk off the table and we're going to make that good till cancelled how many of these can we do we can do two why can we do two because we can risk up to four hundred dollars on any one trade and we're risking about a hundred and you know eighty on this so we can do two contracts confirm and send what's the most we can make 140 what's the most we can lose 360. we're gonna put that in our short put vertical bucket now some might say a hundred and forty dollars like seriously why would i do something for so little well this is a twenty thousand dollar account and let's say you can do one of these a week and net a hundred dollars well four hundred dollars a month is two percent and two percent a month times 12 months would be 24 a year and you know if you could close out one of these a week the majority of your portfolio could be sitting safe in cash and i'm not suggesting that you want to do this you know and have most of your portfolio in cash i mean we have actually not quite half of it invested um but don't poo poo you know base hit after base hit after base hit if you can bat 400 i mean you could be paid millions of dollars you know if you can bat in the major leagues at that kind of and what does that mean means six out of ten times you're up at bat you go back to the bench you know so will you have losing trades yes have we had losing trades in this class absolutely will we have more no doubt but it's about managing the winners and managing the losers as well yeah okay so that is adobe we've got that first one teed up and let's just oh now it's saying 67.50 so let's just go in and replace that we'll come down to 65 because we want to get that we want that to be filled okay there we go so we got filled at 65.

okay so the second one i wanted to look at was aimat applied materials so this is a stock in what sector it's in the tech sector let's look at the chart you know so you know this was kind of more of a tp wasn't it you know as opposed to a bull flag like it pulled back and then we didn't get a close above the high of the low day it's come back to the 30-day moving average if we take a step back and we look at the one-year trend on this obviously it has been an uptrending stock right bouncing off the 30-day moving average today moving across and do we have earnings coming up we have earnings coming up in may may 20th so you can do one of two things you can say i'm gonna buy them the monthly the may 21 and be aware of it and close it out the week of earnings no matter what or you could do a weekly but the weekly doesn't have as many nearly as many contracts so it doesn't have the same kind of liquidity so we're going to come out to may and we're going to look at okay so and this is when you select your strikes you want to be a as below as many support levels as you can so some would say the bottom of today's candle might be considered the first support your 10-day moving average of support your 30-day moving average of support this recent low at 128 31 a support so could we come in and sell the 128 or the 127 even i'm just yeah i was looking at the 128. so if we look at this 128 what's our delta 30 what does that mean 30 chance this could be a losing trade 70 percent chance that this could be um expire worthless which is what we're aiming for um we have a 15 cent difference in the price and you know if we said well we're willing to go up to 30 um the cents in the bid ask spread we've got 175 contracts of open interest so here we go can we sell a vertical and get enough premium 128 i want to make that 126. so if we get a 60 credit for that that is 60 divided by 140.

that's a 60 divided by 140. there we go that's a 42 almost a 43 return on risk yes i did reset this um at the beginning and we were up like this much in the first three or four weeks and then we had a couple of trades like neo where we took a bigger a bigger loss than we should have allowed ourselves to take um but you know right now we're at 21 168 so we're up 1100 well let's see 21 16 8 divided by 20 000. about six seven percent maybe uh 5.8 so we're a little behind the

major indices um you know after being cocky at being at you know up 15 in the first you know six weeks but but we've learned some valuable lessons and i think sometimes that's the most important thing that we can do in these classes when we're trading in paper money right so again so if we're looking at a 57 cent credit we can do two contracts um first trigger sequence right click opposite order if we get out with 20 now you might say i want to get out when this is worth um you know six cents but we do have earnings coming up the day before this expires so we have to be out of this okay confirm and send max profit 116 max loss 284 that's within our guidelines so there's amat okay next one um ally a-l-l-y so this is a financial company um it's you know digital financial services it's a bank um the financial sector has been very strong you know when we look at this over the last year it's just been marching on up the hill last earnings we just hover over this looks like it crushed it on earnings and so if we come in and look at this and say could we sell you know maybe the the 46 or even the 47. now the 47 for some might be getting just too tight because that is above that 30-day moving average but in insurance you know our volatility isn't super high um now we do have a lot of contracts here look at you know we've got 2 000 contracts at the 55 but if we looked at this one and said okay we the 47 now we could just sell a put also but if we said we'd rather define our risk so what we want to do sorry my cursor's going all over is look at that 47 and say the 45 vertical and if we get a 46 cent credit would that meet our requirement 46 divided by two dollars minus the 46 divided by 154 that's a 29 return for something you'd be in for 28 days and some might say you're above that 30-day moving average that's too risky and then you know so you might want to put a note in to say uh you know feeling a little nervous or you might just not even decide to place this in your paper money trade now there's our verticals for amat we're creating our opposite order notice the rhythm of this you know it's and and is 20 the right answer all the time like if if this goes up in next friday this is worth 15 cents or 13 cents and it looks like it's about to pull back we might say hey we've got 65 or 70 percent of our max gain we're happy with that we got that in one week we've saved ourselves 21 days worth of being in this trade and and the potential risk so just because we put an accident doesn't mean we are going to wait until that gets to 9 cents next friday we may decide to close this out if it's worth 15. you know so and again our max profit 90 our max loss 310 short put vertical okay that's that one and the last one we're going to do today is crm so uh this is salesforce and you know when we take a look at this you know some might say well this was down trending yep and it's come up and hit this support level that it hit back here in december but it looks like it's you know breaking to the upside so you know and and some might look at this as we had a double bottom pattern here a little sloppy but you know and it broke and it has moved up at least that distance that and you know others will look at this and say and again you know technical analysis can be somewhat in the eye of the beholder do we have a close above the high of the low day well not there um did we have it here it didn't close above today would be our actual close above the high of the low day and so if we looked at that and said okay if we could we come down here below this and do maybe something around that like 225 ish and so again trade 225 we've got a few contracts here we've got a seven cent spread that was more appealing than the others actually it was a little tighter can we sell our vertical 225 220 250 50 that's a you know greater than 25 return on our risk and again first trigger sequence right click opposite order and this is worth about 12 cents we would exit our position confirm and send oh we just did one contract we could do two this is why a lot of people will actually read these out loud so as soon as i looked at max profit 54 i knew was lower than what we expected it to be so a guideline can be one percent a day and that isn't to say you're gonna earn one percent every day we wanna earn eighty percent of the max gain and certainly you know typically we do these in the 20 to 40 day time frame yeah so this was short put vertical day so it would seem so we've got four short put vertical trades what's one of the things that's appealing about this to us having a smaller account is that we did trades on crm which trades at 225 dollars a share my friends and so if you're looking at a stock like crm and saying like geez this is an expensive stock i can't afford to put this in my portfolio even though it's moving bullishly i can't afford to sell a short put vertical a short put either but i could trade it this way and benefit from that uptrend a more modest return but you know what a more modest return think base hit base hit base hit you know and sooner or later that starts looking and smelling like real money my friends now again we're going to talk about and we've done this in the past as well what happens when a trade goes wrong but what i'd like to do now as we wrap we did several trade management exercises today you can see we have a lot of stuff that happened we had six orders that filled so we exited a part of our position on cisco we exited one of our positions on apple and then we placed four new short put vertical trades we didn't get past the letter d in the alphabet three a's and a c um but what i'd appreciate you doing as we close there is a link that has been put in the chat to a survey and if you would do me a personal favor and click on that link and just when we're when we're done if you can give me some feedback if you loved it let me know if there are things you would like me to cover in future classes i do this for you and often what i choose to talk about is based on feedback i've had in the chat please talk more about trade management or you know please show me where you come up with the stocks that you um choose to use as an example so i'm happy to do that just let me know so and i promise to read every comment if you promise to fill it out so coming back to our powerpoint to wrap it up then we looked at the market forecast we looked at every position that we currently have in that example portfolio and then we did a focus on short put verticals and added four new example trades so guys i huge thank you to brent moores for hanging in there in the chat i know that there were tons of questions this is being recorded and will be available in the archives so if you'd like to listen to this again i know when i was a student i you know are a client i did that a lot um so the webcast archive is not working properly right now for retrieval a fix is going in on that and everything should be all systems go come may first but what i will say is if you go out to youtube and you type in trading a smaller account barbara armstrong or you go to the trader talks channel so just go out to youtube trader talks channel and it will be there you know so there's lots of ways to get to this stuff um yeah and that archive link on under the td platform is glitchy right now so again remember options have special risk we discuss those in this class remember that the examples we use although we use a ton of them they are for example purposes only not to be construed as a recommendation remember um that all investing involves risk including the risk of loss and miguel yes a short put vertical um is the same as a bull put spread so some will call it a short put vertical some will call it a bull put spread and some will call it a credit spread um it's just the way that we've designed it to be as confusing as possible and i'm not saying that i didn't come up with these names somebody else did but there's lots of different names out there so my friends thank you so much for joining us have an absolutely fantastic weekend stay safe best of success with your trading and investing and i will see you in a webcast coming up soon bye for now

2021-04-29 12:00

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