 Welcome back with us folks. Tonight's recap is Facebook that we played on Friday. We played same day exploration Same day exploration is extremely risky. However, we found a deal in those premiums and sometimes It's really worth looking for that. So we'll show you how we managed to find a deal So it was securing something that was somewhat a safer play and something that we found that was While we were minimizing risk playing something that was already in the money So in order to do so you have to understand what it is. What really is playing a Call option on a ticker. Let me show you this now When you play a Call in this particular case we were playing the three seven seven five Calls so what it does it gives you the right to buy Facebook at a set price of three seven seven five at expiration Right, so if you are a month ahead Obviously this comes with time right time before expiration So there's a possibility that it goes up and a possibility that it will go down or possibly that it will stay flat Right, so you're paying for this range hood that this range that you're Believing that it's either going to go up or downs paying for a possibility that will Be going in one direction or the other just closer you get you are to expiration That range will narrow and that range will become very very Slim let's say five minutes until expiration Chances are That the stock is not going to move much right as opposed to a month ahead or a year ahead The chances are higher that the stock will move in a wider direction Now when you are very close to expiration and this particular case we played Facebook a little over four hours before expiration now What we did we played the three seven seven five Why I'll show you this now we entered I'll I'll show you why we entered in and What we thought was was going on but we entered here Which is very close to a Here under three eight it was three seventy nine something now we paid two forty nine two forty nine For so at expiration How much would you pay for your stock if you're having the right to buy three seven seven fives right Three you can buy Facebook for the price of three seven seven five at expiration and For two forty nine more At expiration, I'll give you the right to buy it in This particular case for break even this is how they calculate the break even price you add both of them so basically what it's giving you is basically three seventy nine ninety nine Right you add these two together For anything higher than three seven seven nine ninety nine if it closes above that you have a deal You're much better off to buy at that price Then to buy let's say at the high of the day at three eighty three seventy nine if it were to close at expiration 283 so it gives you the right to buy the stock the amount of Shares that you have in one contract is 100 So if you have one contract is you can buy 100 shares of Facebook at a given price of three seventy seven five plus your premium that you paid for buying that right So basically what it gives you is the right to buy at the set price now we found When Facebook was trading for hours before expiration at the price of 249 so basically it's giving you the idea like we just said three seventy seven ninety nine For break even usually this premium has more price more premium into it If they see a movement that will go up or down Same if you were to take Let me get rid of some of this things here If you had looked at the three eighty calls Or even the three eighty two five calls They had a price Attached to them why because there was a possibility that it would go up that way Or down that way, but that possibility you pay a price for that now what we found was something that that had no price attached to it basically some call it juice there was no juice in the three seven seven fives Because all we were paying is The price as if it was closing right where it was when we bought it. I think it was Somewhere around the three seventy nine three seventy nine point three or something when we bought so basically There was not much Only about seventy cents That we were paying For that premium For buying that four hours Now given the fact that we were on support and I'll show you that in a second on support on Very low premium See I I was a three eighty I could have gone three eighty, but I was paying for something that I Thought we would test three eighty, but I didn't know if we were going to close above three eighty or not So basically looking at the three seven seven fives They were already in the money if we had kept going down I mean the value of the whole thing would have been zero if we had closed under three seven seven five Because no one will pay more than three seven seven fives For a stock that is under that You understand that right so this is why it's worth zero now it closed at three seventy eight sixty nine So basically no one will pay more than a dollar 19 I Hope you all see this so it's three seven seven five Plus a dollar nineteen We'll give you this No one will pay more than a dollar nineteen. So basically the premiums at expiration were only worth of dollar nineteen But still used to have value in those and those calls as opposed to if you had gone three eighty or three eighty two fives Where you would have lost everything now back to this It's safe We call it safe Sorry safe fur because it's still Friday safe for why? one it's in the money so We were almost 250 in the money so that it needs to go down quite a bit in order to be to be read on the play to The value of the premiums were cheap how did how to determine that you look at the price of the underlying you add The premium let's say you're sorry you look at the price of your calls you add the premium So in this particular case the calls were three seven seven five You add the premium Premium was two forty nine. This is three seventy nine point Ninety nine stock was at three seventy nine Thirty ish Basically your seventy cents away For the time that you're buying I I believe that it was pretty cheap because as soon as we get to three eighty We're worth more Than two forty nine At expiration so basically as soon as we climb above three eighty premiums will go higher And higher at about a rate of one to one money penny for penny So I was not looking for something that will go a thousand percent But I was something for something looking for something that would test at least three eighty one three eighty two Levels so basically we were at least making a hundred two hundred dollars per contract this means we were on a safe side and Looking up for something that was decent so Let me get rid of this here two points to remember It was in the money look for premium and add your calls plus the premium and This will give you an idea if you're paying too much or It was a deal to enter with now. This is about the safe play Why did we go in there? we all played The previous day and ended up being look I'll Recap this it was a red day on the market yet It was trying Not quite Another chop same thing Dumped with the rest of the market and then tried again It really looked like it was going to pop But it did it right at the end of the day it dumped But however when the market is going that way and this is staying flat It tells you that if the market is going flat where marketing starts climbing this is going to go You know strong this shows that the mark this was Strength because it was not moving down with the rest of the market now what we did We had a line Show you this we had a line about here, which is a top that didn't cross didn't cross and Then at the end of the day it touched it and then rejected it and went down now at the open What it did it just started screaming upwards right away went for a new high and then it Started losing steam with the rest of the market because at the time market was tanking with the rest of well Apple was not helping, but it was dropping hard and I told you this before The 200 EMA 200 EMA is this green line on Tech 200 200 EMA is really something that you should look at Add this with you know multiple tops that we had on the previous day This was the support a lost support Hit the 200 EMA and then it gained right on top of it now a rejection would have been we lose it Hit the the old support and then we go down Didn't do that Came down and then right away. We started steaming up and this is when we entered and this was also in At pretty much the same place where the market was catching a grip so basically my targets were this level That level and I believe we sold Because there was so much strength in it. It was just kept on going and going I never thought we would test the high of the day, but you know, we sold in 383 basically we bought calls to 49 and fire call correctly. We sold the calls at 528 Which isn't bad it's a lower 100% on something that as I explained just before was fairly safe This is Friday expiration safe is a very long extended word to mention something that is Rewarding however always use caution with that But I just showed you that playing something that was already in the money can be profitable safer and I hope that when you are playing Something you will now look at how much you're paying for that time that you're buying so add the premium to the price of your calls or puts and This will determine how much well and This will determine how much time you're paying for the how much money you're paying for the time that you're playing Guys, I hope you learned something and that you will be able to to play something with a little more Risk management in it and I hope you I hope to see you again in a very short time Thanks for watching and don't forget to subscribe to our flight to our channel. Thanks. Have a good one folks