 All right, so we are here with our contest winner, Matt King. Matt, how are you doing this morning, sir? Hey, I'm good. How are you? Doing good. So I want to kind of set the stage for what Matt and I are going to be doing over the next few months. Obviously, Matt's going to be trading our account, which is just over $50,000 at this point. And we put on one trade a couple of days ago. And so I was just kind of getting to know kind of his experience and knowledge and things like that. And so now we're recording this. This is our first video of recording. And we're going to share each of these with the navigation trading community. And so not only, hopefully, will it help Matt become a better trader. And of course, he gets to keep 50% of the profits when this is all said and done. But I'm hoping that it really helps the rest of the navigation community as I'm teaching Matt different things and kind of coaching him through these different trades. So one of the things that we're going to be focusing on throughout these three months is really a heavy focus on futures. And we've got a course coming out here soon that's all about trading options on futures. I know there's a lot of questions and confusion about the difference between trading on futures versus ETFs and stocks. And Matt doesn't really have much of any experience trading options on futures. And so I think this will be a really helpful lesson and continued upcoming sessions on that topic as well. Now, the other thing that I just kind of set in the stage for going forward is to kind of keep this fairly simple and clean. And I want to show the rest of the navigation community how you can do this on a real part-time basis. I mean, Matt has another full-time job. A lot of people are not full-time traders that are going through the navigation methodology. And so I think this will be really helpful. And what we're going to do is we're really only going to focus on three or four symbols at any given time. So like myself trading all the time, I mean, it's not uncommon for me to have 20, 30, 40 different symbols on at one time. But that's just for the purpose of this contest and for the purpose of the next few months of this coaching session, I really just want to focus on a few. So that way it's easy for us to jump on, record the sessions, and make sure that the rest of the community understands how manageable it is and how you can trade profitably, even if you're not trading tons of different symbols all the time. Makes sense? That makes perfect sense, man. I'm glad to be here and learn some stuff from you. And if I have some questions, I'll throw them out. Cool, that's what I like to hear. I want this to be interactive. If you don't understand something, definitely ask because if you have the question, I'm sure other people do as well. So before we jumped on here, we were kind of looking through the different symbols and trying to figure out, okay, what should we put on? And we already have one trade on in the NASDAQ. So go ahead and click on QQQ real quick on your watch list over there. And as we've discussed in the past with the NASDAQ, for example, if you click on the NASDAQ futures, the implied volatility indicator is not accurate. So we've got to use either QQQ or NDX. And it's not, in looking at the implied volatility of the NASDAQ right now, it's not above that 50 level where we prefer it to be. However, it is, and there's the inaccurate reading on the NASDAQ futures. So you can tell that that's not gonna work for you. So you gotta go to the corresponding ETF, which in this case is the Qs. And then you can get an accurate reading on where the implied volatility and where the pricing of those options is based on that. So we actually put the trade on in the NASDAQ, but we're using the Qs as just to get a reading on the IV indicator. Now, same thing on the next trade that we're gonna put on, which is natural gas. So if you click on the forge slash NG right there, you'll notice that the implied volatility indicator is a little wacky, right? Big spikes and kind of low troughs for a while. So in just looking at these over the years, you'll know that that's inaccurate. So what we have to do is we have to look at UNG, which is the corresponding ETF. And this will give us an accurate reading of where implied volatility is, where those options are priced based on the options of natural gas in general. Now again, we're in a situation where the implied volatility percentile and the implied volatility rank are not above that 50 level that we ideally like to see to sell premium or to put trades on. However, Matt, if you hover your mouse all the way back to let's say the beginning of March on the implied volatility indicator, and you look at where it is right now, it's definitely at its high end of the range going all the way back to March. So what is that, six plus months? So it's really at a high point over the last six months. And we typically, we like to see it over the 50th percentile over a 12 month period. But the fact is there's not a lot of symbols out there with high implied volatility right now. So what we're wanting to do is we're wanting to put some positions on. And so really what we default to is, what's the best thing out there? What's the highest implied volatility on the board? And natural gas is the one that meets that criteria. Is that kind of like saying, sorry to interrupt. Is that kind of like saying, yeah, you gotta take a risk with something. So let's do it with this. Yeah, exactly. And the fact is, we make more money and we have a little bit higher probability of success when we sell premium with implied volatility that's higher. But the reality is you can still make consistent returns and you can still make good money. Even when the implied volatility is lower, you just don't collect as much credit upfront. You just don't have as much profit potential when it's a little bit lower. But the thing is, A, for one, for this contest, I mean, we've got a three month period. I mean, implied volatility could stay low for the next three months. And if we're sitting here not putting any positions on, well, that didn't really benefit anybody, right? Right. And the other thing is part of trading and getting to understand trading and becoming consistently profitable is putting on and taking these trades off, learning how to adjust and always staying engaged. So if we have a period of a couple of months where it's low IV, so we decide we're not gonna put anything on, well, we're not engaged in the markets. We don't really have that feel for what's going on. And so I think it's really important to stay engaged, keep positions on, stay active in the markets. And sometimes you're gonna have a little bit better opportunities than others. And sometimes they won't be as great of an opportunity, but it's still a profitable way to trade overall anyway. So I wouldn't be encouraging a trade to put on if I didn't think we would make profit. I mean, this is my money. This is $50,000 of real money that we put in here. So I'm definitely not putting on a trade thinking I might potentially lose either. I wanna win on every trade that I put on. Of course you do. So you mean you didn't want me trading all that money last week? Right, right. I did have one question. I don't know, do you have like a Q and A time or there was one question that I kind of keep thinking of and I wanted to come back to this. And that was like, let's say it just because I'm on UNG natural gas here. We're looking at this and if somebody that's new is scrolling through here, they look at this and they're gonna go 10 and they're probably gonna keep on scrolling and think that it's not worth anything if they're not used to what they're looking at. And then UNG, it's like, okay, yeah, that might be one of the better ones. But at the same time, I kind of be thinking myself, I kind of thought to myself the other day, why wouldn't I just trade the ETF? And I was like, so that's kind of the question. What's the difference? Why would I make the call to trade a future over an ETF or an ETF over a future? Yeah, great question actually. And I'm glad you brought that up. So if you look at UNG and you see the price of UNG currently is trading at $6.30. So go to the trade tab real quick and open up the options for 42 days to expiration because that's the one that we would trade in between that 30 and 60 days. Open that to all so we can see all the strikes. So what you'll see is, and let's change a couple of columns here real quick on the up right under calls where it says last X, go ahead and change that to basic and then go down to open interest. And then let's under net change, let's change that to under option theoreticals in Greek, let's change that to Delta. So what you'll see here is if you look under open interest, you see that there's thousands of contracts trading at some of those near the money strikes. So you say, okay, well, there's great volume, but if you look at the at the money, what the at the money options are trading at, I mean, you're looking at seven, 10 cents, on the put side, 13 and 16 cents, you just, you're not getting any premium. There's not enough juice in those options because it's such a low priced, low priced symbols. And that goes for stocks and ETFs. If you get under $30, I mean, you're really looking at a situation where you're just not getting enough premium to make up for the transaction costs that you have and the risk that you're taking on that trade. So for a situation like this, with UNG, this is a symbol that I would never actually put a trade on because you just, it doesn't make any financial sense to do so. It's just always low like that. What's that? It's always low like that, the bid and ask prices. They're always, yeah, there's just nothing to trade in there because it is such a low priced symbol. So if I'm trading natural gas, I'm always going to trade the future in this case, but I always look at UNG on the chart for that implied volatility reading. I got you. So, and Matt, this is just a nuance about trading futures. And that's one of the reasons that we're putting out a course here in a couple of weeks to really go through in detail every single symbol that we would trade and why we trade it and how to use the ETF in conjunction with that. So that's not out yet. So great question. So I'm glad you took the time to answer it still. Yeah, so let's go ahead and click on NG, forward slash NG then. And once that populates up, we're going to look at the other nuance to understand on, stay on the trade tab there. The other nuance to look at is, remember we're trading between 30 and 60 days is when we want to enter the trade. So we would look at the 52 days. And if you see, there's two different options. You've got the financial or the physical. So unless you are wanting barrels of natural gas to physically show up on your doorstep, we want to stick to the financials. Barrels of gas. And I'm saying that tongue in cheek, just kidding. That's not going to happen. I've never heard of anyone getting any physical delivery of anything. But for our purposes of trading, we're really just going to always focus on the financial option. Okay. Let's go ahead and open those up. Scroll down to at the money. There we are. And when we put this on, we're basically going to sell a strangle here. And we anywhere from kind of one standard deviation range. So anywhere in that kind of 16 to 20 delta range. And just remember, you know, the closer we go to the money that gives us more potential profit, a little bit lower probability of success. But yeah, that 20 has a lot of volume, a lot of open interest. And so that would be the one that I would default to. It's kind of what I was looking at. That one had more, I guess you would call it more liquidity. Correct. Yep. All right. See, I'm learning something. Let's go ahead and right click sell strangle. Yeah. So that populates our call side. So now we got to go over and view the, scroll up and view the put side and find a similar delta on that side. So there's a 17. Oh, if you went a little too high. Oh, there it is. 17 or the 21. So I would get, yeah, either one, either one of those is fine. 17th, the quality. Yeah, we'll do that. Two, 2.75. Yeah. So you'll change your put option to the 2.75 strike. There we go. And then let's right click anywhere on the red and let's analyze this. Let's trade. There we go. And so go ahead and squeeze that graph up so we can see the trades down below and then bring it up, slide it up there. Yep. So what we've got here is a one standard deviation, approximately strangle. And so if you want to go ahead and set the slices by clicking on the little three bar menu up top there, what, up, up one, there you go. I want to do set slices to break even. And then 1128 is our expiration date. Okay, so that up here. Yep, you're one step ahead. You got, you got, you want to make sure that calendar up there is set correctly and it is. Go ahead and, and go ahead and squeeze that graph so it's a little bit tighter on your screen. This way. Yep. So that, that other, yeah, there you go. So that other break even was, was off the screen. So you'll want to, right there, that's good. Go ahead and set those slices to break even again so we can, so it sets that other slice for us. There we go. So now we got a slice on each side of our break evens and you can see that percentage in the middle, in the middle says 73.07. So the probability of us making money on this trade between now and expiration is 73%. That sounds pretty good. Yeah, that sounds, that sounds good, but what's even better is the fact that we do not hold our trades all the way to expiration. So we're going to manage this at, let's say 30, 40, 50% of max profit. And so our probability of, of making money on this trade is actually closer to 90% probability of success. That also sounds good. So what we need to do, we have our default set to 10 contracts, but let's, so let's go down to your, your red order box down there and let's kick that up to, or down to, let's just start with one. What? One? And when you hover over the graph, what you'll see is that the max profit on this is $810. So the goal of, of what we're trying to do here is I want to get to the point where we're using anywhere from 30 to 40 to a max of 50% of total, of the total capital of the $50,000 that we're working with, but we're, but I don't want to put it all in on one trade. A implied volatility is very low right now. So, so we had a big spike in implied volatility. I want to have some dry powder. I want to have some cash on the sidelines, ready to go. And then, and then it's just never a good thing to jump all in and load the boat in one day anyway. So over the next several weeks, we'll continue to put more positions on until we build up to that point. So let's just go ahead and jump in here with one contract and let's go ahead and get that filled. So simply right click on the red box anywhere and hit confirm and send. Is this, is there anything in here that I should be paying special attention to? Yeah, so what, this is just kind of your, your order details show so you can see over, describes each column on the left. You've got your, you've got your break evens. Well, first you've got your order description. So that's just the order we're placing. You've got your break even. So that's, it's the slices that we just set our, our break evens at just to give you an idea. You got your max profit, which we know is $810. Our max loss is shown as infinite because this is a strangle, we're trading naked options. So it's undefined risk. If we were trading an iron condor where we, or a butterfly or something where our risk was defined, it would show the exact dollar amount there. And that just shows the commissions included the buying power effect on our account. So it's going to take us $650 to put this trade on. Okay, that's the number to look at and make sure we have that amount of money. Correct. Of course we're good to go. Yeah. And then it's the resulting buying power for stocks because this is a margin account. So we, you know, we've got, you know, available for trading 46, but are actually, actual buying power for stock is double that because we're, we've got a margin account. Okay. And then buying power for options after we put this on trade on will be 45,827 which is $650 less than what you see over on the upper left hand column which is the 46,470. Got it. So go ahead and hit send. See if it actually takes it the first time, first run. Yeah, we'll have to, yeah, go ahead and click on that little arrow with the line above it down at the very bottom. There you go. And click on your order bar and right click and cancel replace. And yeah, let's go ahead and kick it down to 0.079. Is this one of those that has to be on the, well, that'd be a big 0.079, there it is. Yeah. So we may get filled the point away, but let's just go ahead and confirm it, send it 0.079 and we'll definitely get filled there. Hey, we're sold and filled. And we got filled. So then now if you hover over your graph, we had to give out just a couple pennies. So instead of the 810 as our max profit, it's 790. So that's the first. Got it. Cool. It didn't cost as much to get into it, but I got you. Yeah, we didn't, you know, the mid price and the natural price that Thinkorswim provides, those are real, those are really theoretical prices at where they kind of a range of where price might be trading. And so that's where we go in and do some price discovery and just kind of, you know, try to get filled at different prices. And sometimes you gotta give up more than you want and sometimes you get filled better than mid price. So it just depends, you know, I just know on natural gas that you're usually gonna get filled one tick off the mid price. And that's just from kind of trading it over the years. Got you. All right. Cool. So now we have a NASDAQ strangle on and now we have a natural gas. And I wanna put on one more trade before we get off today. Yeah, definitely. So let's go to, let's go back to the charts and let's click on TLT. TLT, I'm sure. So this is another situation where TLT is the ETF. And in this case, TLT is a very tradable ETF. So if you go to the trade tab, open up the 42 day options. This one would fall into the realm of what would make the call. Where I was at earlier. Yeah, so you can see, A, there's thousands of contracts trading in open interest and there's decent premium. You know, if we're trading the 20 delta or tighter, I mean those are trading for 47 to 50 cents and same thing on the put side. So this would be a very tradable ETF. However, in this case, I actually want to trade the Ford slash ZB, which is the corresponding future. And again, either one of these is fine. I mean, you could trade, I trade TLT all the time, but just for the purpose of this, we're getting more leverage. ZB is a little bit bigger of a symbol. We're using more capital to put this on. And again, I just want to do a little bit more focus on futures in these training sessions, just to help you learn them and help others learn them as well. So yep, you're right. Yeah, open up the 49 days to expiration. Scroll on down and we'll do kind of a similar thing. We'll do right around that 16 to 20 delta and do that on both sides and sell a strangle. You have a preference either way. It looks like 16 or 21 both look pretty decent. Yeah, they're both decent and it's just preference as far as how close you want to go. So I'm going to leave this one on you, Matt. Do you want a higher probability of success or do you want more potential profit? I was gonna say, I like the higher probability of success. Wait, okay. So you're saying that's the higher probability of success with a 22, but probably get an end up with a higher profit with a 16? It's actually the opposite. Oh. Yeah, the further away, so the price right now is trading at 151.5, let's say. So the at the money, you know it's at the money because the different shaded areas, that's where they meet right there. So the further away from at the money you go, the higher probability of success you have. Okay, so the further down, I'm probably gonna have more probability of success. But lower profit potential. Lower profits. Okay, I think I like, I mean, they're not that far away. So I think that would, I think 22, well not 21, would probably be a good place to sit. Yeah, and we're really splitting hairs here. I mean, we're talking about a few percentage points difference as far as our probabilities. But yeah, so either one. But yeah, personally, I like to always default a little bit closer to collect more credit for more potential profit. I do. Because we're still getting a good probability of success as well. So go ahead and right click sell strangle on that one. I'm glad we're on the same wavelength there. That's good, so, sell strangle. And we wanna scroll up on our put side to check out which strike we need to choose there. 16, oh, I got like our 16 and 22. I was like kind of the same boat over here. Yep. Really fairly liquid in either direction. So that one's sitting around at 22, it's sitting at 148. Yep. So we'll change the put to the 148. Okay. Let's go ahead and right click and analyze that one. Great. Is that right? Yeah, so you can go ahead and set your slices. And then you can widen out that graph there on the bottom if you wanna open that up a little bit. So if you wanna drag the actual graph over to the left, you can click up higher above that line and drag it over. So that'll widen it and then if you go up above, click on it, there you go. I see what you're saying. So as you can see with the probabilities here, we've got a little over 68% probability of success. And that's if we held it all the way to expiration, we're gonna manage it early. So we're looking at closer to probably 85-ish percent probability of success. Okay. So let's go ahead and go down below and it's at 10 contracts. So let's go ahead and kick that down to one. Then hover over the graph there and we've got a max profit of, hover over the center of your graph. Yeah, there you go. We've got a max profit of $1046.88. So it looks good. So let's go ahead and let's actually kick down that, go down to the red bar down there and kick the price down to 102 because we probably won't get filled at 103. So I'll not see. Okay. And then right click and confirm and send. And if you wanna pause here real quick, you can see this, the buying power, oh, and we got filled. Sorry. No worries. I was just gonna show you the buying power that it took to put this straight on was a little over 1700 bucks. Oh, okay. So anybody that wants to go watch that can pause it really quickly there during that split second. So cool. So we've got a trade-on in the NASDAQ. So we've got a trade-on in the bonds and we've got a trade-on in natural gas. So cool thing here about this is we've got three completely uncorrelated symbols, stocks, bonds and natural gas. And so that's kind of part of the process of building your portfolio and building the different positions is keeping on uncorrelated positions. So you don't wanna load up on all stocks. I mean, if you look at like the S&P, the NASDAQ, the Dow, the Russell, I mean, if you had positions on in all of those, those are very highly correlated, meaning they move in very similar fashion. But we've got three different symbols that are completely fairly uncorrelated to each other, which is what we want. So if we wanna go back and look at them, we can always just go to the monitor and kinda check things out. Yeah, so there you go. So you've got three different positions on. Obviously we just put these on. So you're always gonna see that you're down on the trade initially because the commissions come out and you're getting filled based on the spread between the bid and the ask. So you'll see your tiny loss at first, but then as this theta decay, as the time decay happens, and as our options decay, as we get closer to expiration, we'll see those become profitable or if we have big price moves, we may have to make adjustments and we'll do that as necessary. Yeah, definitely. So I definitely wanna get used to looking at this and keeping an eye on that. So if we need to make those adjustments, you know, then we can do that or you know, I know it won't happen for a few days at least cause we just started doing these trades, but eventually we'll get to the point where it's like, okay, we're at that 60% that we're looking for where we're gonna get out or 80% or whatever it is. I think on the screen on paper, it's gonna look like around 60 or 70%. And then there's our profit. Let's get out before something happens. What would happen if we didn't get out? Well, if price is in our range and we held it all the way to expiration, let's say we fell asleep and wake up for a couple months and price was in our range, well, it's just gonna expire worthless and we're gonna keep all that, we're gonna keep max profit. If price is outside of our range, so if one of the options is what's called in the money, and in that case, we are, and we go all the way to expiration, we're probably gonna either get assigned the future or it depends on the different contract we're trading, we're either gonna get assigned that specific future or we're going to just get, it settles to cash and then it just kind of wipes out and we move on. Okay. But we are active traders, so we'll continue to manage these and monitor them and hopefully we get a little bit higher implied volatility in something and potentially jump back on here in the next few days to a week or so and find some more stuff to trade. Yeah, definitely, I like that. So thank you for having me coach with you or work with you on this, this is exciting. Yeah, well, we're excited to have you as well and we're just kind of feeling our way out for this contest. We're gonna do these contests more in the future and so we're just trying to make, and so you're our guinea pig, Matt, so hope you don't mind. It sounds good to me. Let the pioneer of the way. Yeah, sounds good. Well, we'll sign off here and we'll catch up again next time and record this for everybody to watch as well. All right, sounds good. Thank you.