 Okay, X traders. We are going to do a quick recap of It's it's a well-known strategy, it's not that big a deal, but It's basically aimed at jittery Traders or paper hands traders as you might have heard us being called So what I'm going to do here is I'm going to review a trade which was alerted to at the X trades discord and The the trade was and don't mind this Bottom leg here. Let's focus on this top leg. It was a long call for Netflix This was on December 11th. I believe Somewhere around mid sorry at November 11th somewhere mid November and the call was made then that in about 20 or 25 trading days Netflix was gonna be at or above Well above 330. Okay, so that was the call now normally a lot of traders Especially jittery traders or newer traders will look at a five sixty seven five hundred and sixty seven dollar Long call alert and say though. That's too big for me. Yeah, it's too rich I'm not I'm not into that and you will either You'll do one of two things if you think that's you know, too rich for me You're not gonna take it and it might end up being a very good trade and Or number two you'll say, okay, I'll get into it five sixty seven and this is when the alert was made This was the day basically which is probably what the analyst saw You know this bullish hammer bouncing off of Sorry, that's the wrong here we go bouncing off of The let me zoom in on this bouncing off of what seems to be the middle of That trading channel. All right, so you see how it's been trading in a range So, you know, he saw the analysts saw this bullish Hammer and decided this thing is gonna go up, you know past 320 or to 330 that is what the analyst more than likely saw and He decided to take the five sixty seven call now like I said, maybe you you can't stomach five hundred sixty seven dollars, you know and so This is the strategy Which basically takes a single or a naked call and Turns it into a vertical. Okay. And so how do you do it? Well, the alert was for the 330 call To be bought to go long. What you do is you sell The same dated call at the strike above Okay, so this would be the 335 now because it's above the 330 then it's gonna be much cheaper But in this case, you're getting four hundred and sixty seven on top of having paid Five hundred and sixty seven. So what is your total risk? It is no longer five hundred and sixty seven dollars It is only one hundred and what does that mean? How does that help you? Well, basically if you're gonna swing this from, you know, mid-November to December you're gonna have a lot of sleepless nights Wondering if this thing is gonna make it to 330 you know some days it might go up some days it might go down and Basically if you're jittery, you know a jittery trader like myself Then you you won't stomach this and eventually you might end up selling for a loss Okay, because if this thing goes from five sixty seven to five hundred you've lost sixty seven dollars and you start thinking well You know It'll recover, you know It'll make it back. It'll bounce back and then it goes to 450 and you're like, oh man Well, now I've lost a hundred and so dollars. I'm not gonna sell now. They'd be ridiculous. I have 20 more days left to go and Then it next day. It's down to 350 dollars and you're like, I'm definitely not selling now Not for 200 and you know 10 or so dollars that I've lost so far I you know, I might as well just write it out and see what happens and Trust me more oftentimes and not you'll go from five sixty seven to zero if You don't have the experience if you don't have the trading plan because this was an alert that was given at the discord community It wasn't your own so It's possible that the analyst had other tools that helped him Gauge that this was actually gonna go up It's probably not gonna go up, you know in a straight line as it surely didn't and therefore You know the your the anxiety gets the best of you. Okay, so what happened? Well, what happens is the next day? You're happy, you know, so you get some good night's sleep. That's great But you got to keep swinging this thing and so the day after that you're like, okay Well now I'm break even possibly and then the day after that you're like, oh boy This is getting serious and then the day after that it's like, oh my goodness you know this thing is going nowhere and By that time this thing is down like a hundred or two hundred bucks and you're like well might as well let it Ride all right, and if you don't have a trade plan that is a big mistake So what do you do you turn it? Like I said into a vertical spread and how does that work again? You already bought a 330 call. What you do is you sell a Call for the strike above for 335. Now remember this gives you the right if you want to to Buy at 330 so if this thing shoots up to 400 you're golden because whoever has this contract has the right to buy at 330 and they can turn around and sell it at the market at 400, but this thing is gone worthless because what this does is it obligates you to sell Netflix shares at 335 if they're worth 400 in the market Why would you buy at 400 and then be forced to sell at 35? It's worthless. So what happens is basically you pay 567 and you receive 467 one of these two is going to be in the money or out of the money by expiration and that is Basin basically what you do is you reduce? You know your anxiety because now you're not worried about losing $567 you're only worried about losing a hundred and a hundred It's isn't is a number that you can sleep with at night You know if this thing goes down to a hundred like it did in my case right around here Then I was you know, I thought to myself. This is fine. I'm good with losing a hundred dollars. I'm not good But you know in losing $567, but I'm definitely okay at least you know I'm a lot better off if I'm only down a hundred then 567 so what this does what this strategy does is it allows you? To basically sleep well at night. Okay, that's you know, that's the that's basically the net effect is that because you Sleep better at night knowing that you're only risking a hundred which is actually true Then you can stomach these downturns so that when this happens you're ready to sell All right, and that is indeed what happened. I bought it here you know I bought the vertical which means I bought the call and I sold the call and It went up the next day, and I was probably up about 10 20 bucks I can't remember and then boom boom boom. I was down a hundred, you know But a hundred is okay if I would have been down and I could check I can't remember but I believe if this thing went down to something like Believe it was like 200 or a hundred dollars So that would have meant that I would have been down 300 dollars Right here. So if you're here and you're down 300 dollars, you're probably thinking It's time to bail, you know or let's lose some more because you know might as well. Let's risk it We're already down 300 Let's see if we can recover and then this thing tanks, and then you're out five hundred sixty seven dollars But if you're down at this position, and you're only down a hundred then you're willing to let it ride a bit more and that's the whole point of The vertical spread All right now there is obviously a trade-off and the trade-off is that you're not going to make as much money because if this Thing goes from five sixty seven to six sixty seven You've made a hundred dollars great, but if this thing, you know goes up. It's because the stock went way past three thirty But that means that this one Will be a loss, you know, why would it be a loss because it's below? 335 at some point if it keeps going up If it keeps going higher then basically this thing for sixty seven is going to be Worthless so that's what you basically Do that's how you that's how the trade-off works. You're gonna make money with one of the two All right, so that's a very good strategy to use if you if you find yourself getting out of trades for losses That were probably one screen Or if you find yourself, you know the alert is made and then you get out and then like you know an hour later The analyst says oh What a nice run Netflix had, you know, you know, we got we got out just in time 200% or 180% and you got out at minus 50, you know, so This is a very good strategy to use for new traders for jittery or anxious traders That are still working on their education on their learning path And you don't have enough tools, you know You don't have enough experience to recognize Price patterns individual candlesticks You know, I was talking earlier with somebody about ATR which gives you an idea of how much this thing can move You know if this thing if you're gonna get a 330 call. It's because Netflix is capable of going, you know up You know about what 30 40 points in 25 days, you know, if it's a stock that moves very little then it's not very likely that it's going to reach 330 All right, so if you know those things then you're probably a lot more Confident with a 330 call. All right, so that is My recommendation to you guys I'm gonna be doing this a lot for the month of December I've already gotten into one today on Baidu and I turned it was a Naked or a single call and I turned it into a vertical as well So I'm gonna be posting that somewhere down the line in the month of December Okay, so how did this trade end up? Well, I Have the capture right here Basically after it did this because I sold off when it reached the top of this trend line again expecting this to bounce back Down I ended up about 40 percent 40 percent profit after being down a hundred dollars Which is basically You know a hundred percent Okay, so that is the beauty of this strategy and I really encourage you guys to try this out It'll do you a world of difference And it'll definitely put your nerves at ease. So I hope you enjoyed the video You