 What's up trade hackers welcome to today's update today's Thursday April 2nd Starting with the trade hacker question of the day Can you explain the mid and natural price when placing a trade? Let's jump on the platform and take a look at an example. Let's just go to SPY SPY being the most liquid ETF there is so if we go to the trade tab and what I did here is I just set up a Typical short strangle, so I just want to have at least two legs on there and what you'll see here is that The price at this time there and we've got about 40 minutes until the market closes So the market's still open, but you see here There's about a five cent difference between the natural and the mid so what the platforms do is is keep in mind This is a theoretical price for this spread. Okay, and that's so that's what they're giving you It's a theoretical price The price that the spread is actually trading at is What you get filled at okay, so the markets obviously are always moving and And so they give you kind of a theoretical now in something like SPY I will start right on the mid price and hit confirm and send to try to get an order filled if I was gonna place this trade There are other You know other option chains if you get in the weeklies that spread between the mid and the natural widens out a little bit If you get into some less lick liquid symbols Like let's just go to best buy as an example and I'll set one up real quick So if we're gonna do a short strangle, let's Sell the 22 Delta and sell the 20 Delta here So you can see see how much wider the the spread is between the natural and the mid We're talking about what is that? 17 plus 67 cents Between the mid and the natural so if I was gonna place this trade I wouldn't I wouldn't start on the mid I would move just off of it a few pennies and so in this case I would do something like this a lot of times you'll get you get Filled closer to right in the middle between them in in in much less liquid stocks or ETFs You have to go closer to the natural so it's just a theoretical price And so you can kind of just play around in that to see where you get filled sometimes all I'll move it down to somewhere like that and then confirm a cent and I'll actually get price improved So instead of getting filled at 336 which is where I set this at I'll actually get filled at a better credit of let's say 340 or 345 Sometimes you'll place it on the mid and you'll get filled at even better prices So it just depends on where the spread is actually trading where the computers and the market makers are actually filling those prices at But this just gives you a good idea The other thing to keep in mind at the time right now at this in this period We're in such a period of high implied volatility that what happens is the bid ask Spreads widen out. So you see here, you know on this 20 delta put you're seeing a bid of 170 and an ask of 257 that's a very widespread When we're looking at selling options or trading options in general we really want to Stick with the most liquid stocks the most liquid ETFs and have the smallest distance between that bid and the ask spread because that the difference between the bid and the ask You can almost think of that as commission. I mean, that's what the market makers are keeping And that's and that's what's paying the exchanges and the facilitators of your orders. So Tighter bid ask spreads more liquidity. That's where you want to be But that that's kind of the the distance between that's the difference between the natural and the and the and the mid going back to SPY just to Just to reiterate that and I gotta let me let me set that up again because there's one other point I wanted to make and that is, you know, typically well, I'll just do it right here So typically if you're if you're looking at the at-the-money options in a monthly cycle So this is May 43 days out. So this is a typical cycle that we would enter a trade-in If you look at the at-the-money options, so at the 250 strike in this case the difference between the bid and the ask right now is about seven or eight cents, right and so That the reason I point that out is again because of the volatility that we're seeing right now That is a much wider spread Then you would typically see in a Should I I don't want to say normal, but should I call market in SPY sometimes you're gonna see those spreads penny-wide one or two or three cents wide Whereas right now you're seeing seven eight nine cents wide at the money even though there's all that open interest So the more more open interest the more volume the more spreads or the more options trading at that particular strike is Typically gonna represent a smaller bid ask spread But if implied volatility heightens, you'll see those bid ask spreads widen out as well So it's okay to also just put your order in and let it set to see if it gets hit The downside is that the price could just run away from you and you never get in the trade Of course it if it happens to be a winner then you're you're mad you didn't get in Of course, if you if you do get filled and it goes against you you wish you would have waited So it's just a game that that's trading and so it's just a game of doing a little bit of price discovery Kind of moving that price around on your trade tab Around that mid and natural price to see where you get filled because the fill price is The actual price that that spread is trading at so hopefully that helps. Let's let's jump into what's going on in the market today Again, we've got about 30 minutes till the market closes s&p's up over 40 Got the Dow up over 300 Just about an hour or two ago. They were they were falling down and and the Russell was negative It's just barely positive now, but they have bounced back up Pretty small range again. We've talked about two days ago the range being the smallest that we've seen in weeks having another fairly narrow range and If you look at this range over the last week and a half or so, you know from 2600 down to about 24 25 ish, I mean Based on what we've been seeing where we're have, you know, we've seen 200 point ranges in a day We've got about a 200 point range over the last week and a half or so. So a little bit of consolidation going on and I see that as the markets just kind of winding up for the for the next move So again, don't don't fall asleep at the wheel based on the somewhat lower Volatility moves that we're seeing intraday compared to what we've seen over the last few weeks Because keep in mind. I mean if we look at a one-year chart If you go back before all the craziness started happening, you know, I mean look at the look at the look how small those bars Look compared to what we're seeing now. And so You know, I think the volatility is going to continue and so when I say the markets consolidating It's kind of weird to say that the market is consolidating in a 200 point range in the S&P But that is in fact what it's doing So you've got to look at the current environment To kind of look at look at that consolidation Not just an average over the last year because then you'd be taking in the consideration these tiny moves that we were seeing Previously compared to what we're seeing over the last couple months The other thing oil big boy move in oil currently up 22% it was up Quite a bit more about 35% at one point. So much needed in our positions You know, we have been kind of managing and rolling these positions as it's been sliding and now we're getting a little bit of a bounce And so much welcome bounce in oil. Hopefully that continues a little bit big move in gold up over 3% Bonds pretty flat, you know, they're up about a quarter of a percent Natty gas down a couple percent. So still some decent moves going on around the around the marketplace Boeing looking at the stocks Boeing down six percent Some, you know, some big movers in in stocks as well CVS Delta Airlines, you know, the airlines still continue to get hammered banks pretty flat today Expedia down almost 10% if you look at some of the Casino stocks like wind down another 4% and then zoom, you know, we've talked about this a couple times if I go to a year to date You know, it's it's down over 11% today It's been down the last four days in a row pretty significantly at one point The stock was up 140 percent year to date now. It's up about 76 year to date And so what's going on in zoom? I mean people are still staying home. People are still using zoom conference calls Well, there has been some news I don't know if you heard the new terminology is Zoom bombing and and so what's happening is So there's a concern about the privacy and security of zoom But the main thing that's happening is, you know, if you've ever used zoom, you know, you can just send out a link There's no password protection or anything. You you can have a room password protected But you can also just send out a link that anybody can join so imagine a big company 3000 people on the call And then somebody randomly gets a hold of that link and jumps in your zoom call with you We've got all your employees in there and there's been there's been reports of big calls going on and random people to jump in there and start Uh posting pornography and racist videos and all kinds of stuff So people are you know, it's kind of like photo bombing when somebody jumps into your photo Well, this is zoom bombing somebody's jumping into your zoom call and uh and and playing videos and things that are Not really what you intended. So to me, it's kind of funny But so there's all this talk about the privacy and security, but in reality, it's it is The people who are creating these zoom calls creating and sending out these zoom links They're just they're not being careful with who who's getting them. So anyway, kind of funny stuff, but uh If you're using zoom be careful. Make sure you are securing your calls. So you don't get any crazy people jumping on Uh, so that's what's going on in the market. So what did we do today? Uh, we ended another entered another double calendar when implied volatility is contracting Those have been working really really well Uh, and then um, and then we rolled a couple positions. So That's all I got for you. Everybody have a great evening. I would be posting the uh Recap of all of our alerts to pro members tomorrow. So I'll see the rest of you next week. Take care