 Almost time for the bell, how many options will you sell? Fire up your platform, get ready to enter But first, let's get the mindset centered Let's go, we follow the plan, that's how we trade it Have success, find what works for you and forget the rest Stats and probabilities is what we're about Time to dismiss greed and doubt, focus on the process Not the money and the profits will flow Trade hackers, get ready for options, time to make bank Get locked and loaded, then be ready to play Hey everyone, welcome to Power Hour Live, February 15 When you know it, SPX is up and moving higher Not quite back to all-time highs, which was 50-48 But we are at 50-31 S&P up 26, NASDAQ up 38 Russell up 50, Dow up 325 Gold and silver both green, notes and bonds slightly green Tenure yield a little bit down, oil up almost 2% Add a gas down one, grains are red Euro and the pound green, Bitcoin slightly green VIX is up about a half percent, 14.46 Even the VIX is tired of the market going up It's like I'm not going down anymore, I'm just not You can go up, I'm not going down Alright, so what did I do today? I am in a, my morning, 2 to 1 Iron Condor still, I was, I think it was at like 40 I saw it like 46, 47, 48% I was trying to get 50, and then it ran away from me So I'm going to need to come back down to about 25 For that to hit I've also got a couple of entries on One's a 2, 3, one's a 1 to 1 This is the combined position, they're sharing a strike So those are up about 50 and 55% respectively Had a couple other re-entries that I got the stop lowered And then got stopped out for a profit And then I've got these two I did get in some JSP's, just a few contracts So I booked like 1,400 on those I've got a 1DTE Iron Condor on that's in the red Not a lot of decay in the 1DTE today I assume because of PPI tomorrow, so It's appearing like CPI, PPI, FOMC Any of those highly regarded economic news events It's probably best to pass on the 1DTE I've got my NDX trade that I opened Got my NDX trade that I opened And it's pretty centered Sorry Chad, go ahead I was going to say I didn't take S&P to very long Get back up there What I've got today is I did an AM number 1 Booked 45 bucks scratch trade Hit 20% and then got stopped Lunchtime number 1 then Hit 20, 40, 60 and out And I've got my power hour in Right now My power hour trunch one just entered With an up day 50-30 straddle Filled at 11 bucks even 50-30 straddle for trunch one I'm on the, so you're on the 910 Okay and I'm on the 920s You're on the 690s and I'm on the 740s SPX still pushing highs of day That is a real bummer if my Morning trade doesn't come back When you get within a few pennies And then runs away That's not any fun How are you doing overall today Chadwick? So I had that $45 scratch My lunchtime number 1 was plus 1360 So then I'm in a power hour But if it keeps going up My power hour want to get stopped You say no morning trade for you? Yeah I had an AM number 1 That was a $45 winner Oh It was basically a scratch trade Looked 20% and then got stopped And I need it to stop pushing I mean it was way above the expected move for the day Yep I've got expected movement about 50-24 Up to 50-32 Looking at power hour number 2 50-35, 50-30 30 points wide on wings No Rick today Volatility did not contract at the open Did a tiny bit let's see that Yeah it didn't contract more than a quarter percent It looks like the gap down was 0.14% So it did not qualify for me Jake no I've never had any luck in real life Or testing with overnight Rick's By the way tomorrow is not CPI PPI I think that maybe that's what you meant But yeah CPI was the one earlier this week But the reason it typically doesn't work Is because those options are a little bit juiced So for example you can see The one day options implied volatility is at 15.39 Versus Monday's 10% So they pump that in and as soon as that number comes out Volatility is going to contract So that works against you Rick So of course if it makes a massive move Like if there's a surprise If it makes a massive move you can make money But overall typically not a profitable strategy Yeah it was for a while CPI there for a while had a little bit more impact And then kind of shifted more to PPI So yeah I don't know I guess it depends on the number Whether it'll be more important or not I'm not sure what I mean the market certainly Had more juice pumped into the CPI date At the beginning of the week than it did PPI So I would say that CPI is a little bit More A little bit more impactful As far as the market's concerned We need to get down to about 50-20 Or 50-25 I'm going to have a chance at hitting my profit target On my morning iron condor So those who are kind of trying to understand What it is and I was trying to refresh myself So core PPI is the change in the price Of finished goods and services sold by producers Excluding food and energy Let's just have a calm final hour CPI is the change in the price of goods And services purchased by consumers Excluding food and energy So we get the change in price of goods Purchased by consumers Versus the change in price of finished goods And services sold by producers Yeah that's how I've always thought about it We've got SPX currently up Just over half percent from the open I'm going to try to ride my re-entries into the close I currently at 56% and 60% About 15 cents from Filled on power hour number one 20% 15-20 cents Rut up over 2% again today Rut likes to move Both directions Yeah I was in beast mode earlier Got XLK the tech sector slightly red Everything else green XLP green regional banks 3.5% higher Energy, gold, real estate, biotech Financials, retail all up Twilio down 15% after earnings Riots been rocking down 6% Almost 7% today John Deere down 5.5% after earnings Jumia, the Amazon of Africa up 39% Wow All the way up to 4.5 bucks Lyft up 15% even after the Do you guys hear about what happened with Lyft's earnings The CFO Complete typo in the earnings report The tune of about $3 billion or something like that I can't remember what it had to do with But something to do with the The revenue or something He put 500 basis points It was supposed to be 50 basis points Yeah there you go That's crazy Oh on the EBITDA, yeah And so Shut up, they came back down But now it's right on back up Up to 19 So here's my Thought around the Just entering the 5 wide in SPX Or in the case what I've been doing is just NDX 10 wide just to Free up some room in SPX So for example Here's my NDX trade today So The width of the spread And I'm entering right around 25 delta The width of the spread is going to Almost typically almost cover The expected move for the day So to start the day The NDX expected move is 108 So You know it's covering about 100 points Down and 100 points up from center So the way that I The way that I'm thinking about it is Okay If price stays within the expected move That's one standard deviation If it stays within the expected move 68% of the time Reality selling premium You're getting a little extra Typically over time So call it 70% of the time It's going to stay in your range And so the way that I The way that I'm thinking about that is Okay so My max profit on this trade is 30 If I take a full loss it's minus 1170 And that's pretty normal It's about three to two-ish Kind of on the risk to reward So if I Let's just use a sample of like 100 trades So 100 trades let's say 70 of them Hit 830 So 830 times 70 Is Around 58100 And 30 of those 100 trades Hit max loss which is 1170 Times 30 Equals So that'd be minus 35100 So So that you know just from a Positive expectancy standpoint That's the way I'm kind of Looking at it is that You know price can stay Expected move About 70% of the time Based on your risk and reward Of doing you know that with You're typically going to come out ahead Over time Now I did a lot of back testing I couldn't get anything to test decent But I don't know so but I'm just You know I'm doing it super small And you know so far It's been really good You know it's a probability Based trade so it's going to be Based on a large number of occurrences But I don't I just it seems like it should work Yeah not I couldn't Get the back testing to show Me any value And then the other thing I started to Do at the beginning was you know If it started to go down and kind of Getting towards the downside Break even I would set up a new Centered iron condor And then I'd let them both ride but then Then you're really like okay Then you got to really hit it in a little tiny Spot to really make any money Otherwise you're Because of the combination of the two You have a pretty narrow range so You know I've seen many times where It kind of goes outside the expected move And then it comes back in and so Really what I'm doing is I'm just putting it on in the morning And letting it ride win or lose Need a little bit of bounce here Well that's I mean that's the way The options are priced so I mean I've seen it with A bunch of different strategies over And over and over again when you look at You know a large number of occurrences The probabilities they just They play out You're certainly going to see periods where you You know you hit inside this Inside the expected move a lot More than 70% you're going to have periods Where you're you know When the market's really volatile and it's Moving into a higher volatility Kind of situation And you're you know Have you know a couple weeks where you're Blowing out of the expected move You know half the time so But over time I think Those probabilities Should play out At least they have from what I've seen Trunch to coming in I've never mind Sorry false alarm I saw some flash that trade Was just adjusting my It's not quite time for trunch to yet By the way if my bot doesn't fire For trunch to you because we're Real close to the edge I'm going to go ahead and manually Oh my morning iron condor was starting To get close again on that little down move And then it bounced I want to just close my am trade here I'm just going to close my am trade Rather have a little bit more bullish Bias trunch to Is getting ready to fire trunch Too fired Came in on the 30 straddle Again Fill it at 1050 So in the morning I just I just needed to reduce A little bit I've got Two re-entries They're fairly well centered I'd rather have my trunch To update come in and hold That morning one that was on the edge Yeah discount so I'm I'm just going to about the 25 delta 25 delta 10 10 wide wings And the NASDAQ was red earlier It's actually just barely green So it's right back to center Whereas SPX Is out of its expected move Right now I'm just rolling with the two power Hours to have on not looking to enter a third right now So I'm on the 30 straddle For both one and two I'm not really looking For a minimum credit discount Well for one I've got the bot Doing it and I don't have any filters like that But It's more of Just I want to You know I don't I don't want like Two times the risk You know like today was a Pretty typical day Where you're you know 830 is my Max profit versus 1170 It's my max risk so Whatever that is It's definitely not near as liquid But You know the bot is using limit orders And it's just cancelling and replacing Adjusting a little bit to get filled So When I was trading it without the bot You definitely got to work the order more And then the other thing I've noticed is I've tried to get out for like 20 cents At the end of the day And it wouldn't even fill It expired within the range But didn't even fill just expired Yeah I mentioned in the PM session Dark Avenger I Was trying to hold out for At least 800 Closer to a thousand bucks on that one Now and that's why I like I didn't mind Doing NDX for this one because I'm just Entering and then I don't have a stop And I'm just letting it expire so NDX is a little better for that kind Of scenario than Having stops and All that stuff VXX verticals A tiny bit I'm here with Natty Gas today The natural gas has just been plummeting The IV If you look at UNG The ETF IV is getting a little frothy Percentiles at 74 in the annual IV 81, 85 IV rank of 85 in the Monthly My 1DTE A little bit red My 1DTE today Does UNG have Have the Contango futures role Issue? Let's see I don't remember Yeah so you don't want to hold it long term then Got a profit target at 90% On my re-enters here I'm sitting at about 72 And 74% RUT? Looks like I can I'm going to take my RUT duck off For beak profit It's Pretty low chance of getting back down there See if I can get filled around 5 bucks Need a bounce Less than 5 bucks On my RUT duck My time fly down a few hundred Yep, don't be taking Profits now Mr. SPX Get back up to 50-30 That's where I would take it Trunch three I'm going in here shortly Hit profit target on my morning trade Had I held it What do you know? Going back down inside the expected move Stop is going to happen Trunch three Should hit 25s and 20s What was that? Trunch three didn't fire Because it's Below half percent I'm going to manually Fire my trunch three I think I may have gotten stopped out of trunch two Hang on a second Trunch one got stopped Trunch three I'm still trading as an update Even though it snuck a little bit below Half percent Trunch three I'm on the 20s and 25s 25 calls, 20 puts I did book $1,290 On an oil futures trade today Price had flushed Pre-market and started to bounce up I got long looking for continuation My exit was The yesterday's open and that's It got almost just a little bit past that So it was a really nice trade Held it for The time that I got in pretty much the whole move 50-30 is my sweet spot Unfortunately I got stopped on trunch one Didn't realize it was that close Pretty close to getting out of 40% of power hour number one And just got out of 40% Power hour number one Yeah, I think we needed to put Monday Monday needed to go in a timeout anyway Tomorrow the old skew I haven't looked at skew in a while It's not really that low It's a lot lower in October It's basically mid-range I have the high marked with this blue line And the low marked with the yellow line It's in the upper Upper half Not sure what old zero ahead just talking about 25 million to the buy side Early indication Just 200 tomorrow Let's go 400 while we're asking Nice knotty dog There we go, yeah Great job Pretty good return for five days I like things to set about 50, 28, 29 Right in there In my sweet spot Trunch two and three are slightly green Gonna push up to 50-30 Probably would get out of 20% Of my power hour number two This is what I'm looking for Definitely would like an uneventful rest Of the next 30 minutes Anybody else do a 1DTE today? I did an AM On accident I saw that I booked a small profit on it Booked 10% and closed it I mean if this thing was centered I guess it would be around 30% But no chance in hitting our 45% That's for sure I'll leave it on just in case Mr. SPX decides to go Up or down instead of up Mr. SPX needs to go up to 50-30 And then we could just hang out right there Yeah, I'm gonna I'm not gonna do the 1DTE I'm not gonna do the 4DTE version tomorrow With Monday being a holiday A kid's got a half day today They're off tomorrow And they're off Monday for President's Day Yeah, mine are off tomorrow as well What is this all about? President's Day is all of a sudden a four day weekend Don't know Yeah, markets are closed on Monday Around 80% Trying to squeeze 90 out of those Homeboy, where do you live? Colorado? Utah? Ski week in Sacramento? Interesting Yeah, that's true I've been skiing in Tahoe Twice What's the big one? Squaw Valley I've been to Squaw Valley It's a cool place Yeah, Tahoe's awesome Get the skiing in the winter Summer Got some casinos in case you want to throw down It's not called Squaw Valley anymore What is it? Is that too racist? Tahoe at Palisades Oh, does it really? Well, yeah, that might Rub some people the wrong way, I guess That's why my trunche one got Stopped out, I forgot I have Trailing stops on my update These ones are sitting at about 85% getting close Just took one, Benji That was on Oil Got in at 8.40 AM So about 10 minutes after the market opened Based on the price action I saw On the daily chart, scaled out of I had two contracts, scaled out of one here And then scaled out of the last one Pretty close to the top 12.90 Alright, I'm good if we sit here For just a few more minutes to get out of this trade It's at 87% I need 90% Then we can bounce Still at 25 million to the buy side Yeah, definitely need a little bounce here And yet to get out of half of my power Hour number two, so That's what I need a bounce for So my NDX Which you can see is just dead centered In trade steward I have it set with a 95% Profit target Which is I think 20 cents, maybe Yeah, 20 cents and it's still not filling Those wide bid-ask spreads I got filled at 4.15 Was my Entry fill price Yeah, longs have no value but that's just on the Trade steward automatically moves to Just the strikes that have a Bid although Maybe the shorts don't have a bid None of that I think about it That is the issue, my short calls Don't even have a bid I do have a 50-25 Strattle on my other account It would be a 10 So I need it between about 50-25 and 50-30 Get up there It's hovering around the expected move My reentry is sitting at 87% Just gonna lean a teeny bit more decay to come out A teeny bit more decay and then we can bounce Still 25 million to the buy side Knocking on the door of my 90% Bix coming down Almost to lows of day Get up there SPX There goes one of them at 80 cents There goes the other one at a buck 90 Alright, cool 90% out on those Now we can bounce Yeah, definitely need to bounce Power hour bounce I'm gonna get stopped on power hour 2 So here were my reentries today First one got stopped for small profit Second one got stopped for small profit And then the two that just closed out at 90% So plus over 90-100 on those today Those were nice Well my Trunch 3 is up 38% Which I need to get close to Reducing my stop on that one I need two bucks Alright, reduced my stop on Trunch 3 That's far enough SPX Here's my Trunch 3 And I just reduced the stop on and then Trunch 2 is Slightly red Yeah, that's what I found too, Maro Just couldn't get anything that really Look good from a backtesting perspective But been strong all day And then it comes down during power hour Better bounce right there, buddy You can do it Hold the line Yep So my Trunch 2 is currently trading at 1420 Stops at 1695 Power hour number 2 stop is at 810 Currently at 722 Had a real nice green day going until this Power hour number 2, so Get a bounce big guy 600 million to the buy side is the final MOC numbers, so no MOC trade Ah, booked What was that, 60% and out? Yup, 60% and out on power hour number 1 Nice Needed that one Open ai.com Sora Creating video from text Booyah Check that out, discount Here's a little bounce coming Yeah, I just booked 20% on power hour 2 Trunch 3 is up 35% now Trunch 2 jumped up to 26% Getting close to reducing my stop on Trunch 2 Reducing my stop on Trunch 2 Alright, let's slow down Just hang around 30 I got booked on 40% of number 2 as well Nice So I'm going to take either Trunch 2 or 3 off So we get to 5 minutes till I'll decide on the other one My 1 DTE is almost even Actually it was in the green before we bounced So I'm going to get out of Trunch 3 Because it's the 2025s Closing Trunch 3 Should book about 42% on that one Filled at 350 Now we need to move up to 30 I'm not going to let this one expire Either it's a straddle I just want to see if we can get closer to 30 Give me a nice green day for me That's awesome, homeboy Before and oh, these 2 power hours Really good My 1 DTE just closed For small scratch loss Minus 350 Can we get one more little off? We'll push up towards high of day I know SPX wants a new high Yes It's in its DNA lately For sure And DX will expire for max profit 60% 60% out power or 2 Nice white tiger You betcha Lots of good profits today That owed us man Hour hour coming through today Over 2 minutes to go Still waiting for a little more push There you go Alright, now I'm going to get out Before this thing rips my face off In the last minute Filled at 260 on that straddle Nice Alright, so Let's wait for trade stewards to update Alright, so 830 on my NDX That'll expire Trunch 3 Almost 40% 2 I booked 75% Trunch 1 was my biggest Lost 5, 51, 50 My 1 DTE Minus 350, my AM Which could have hit profit target Had I just left it alone Ended up booking a thousand Then on my re-entries 3400 5200 240, 245 Good day my friends Tomorrow Tomorrow is What's the date? 16th? Yeah, so We'll be streaming live at the open For 0 DTE And then we'll be back for power hour Alright all, take care, have a good night See you tomorrow