 All right, good morning everyone or good afternoon depending on where you're at. I hope you guys are all enjoying your Saturday so far and your weekend, just getting off to get start. Gonna get started soon here. Let's just do a quick introduction first while we wait for some more people to join. But this is a part of an option seminar series or course series for X trades. And this is Timehawk. I am a analyst with X trades. And this seminar series is just gonna go through to A to Z's on options from basics to advanced strategies. I will try to review some of the more basic stuff as we go through each presentation just because I know a lot of people have questions about those kinds of things and every single time I present a topic we always usually have to go back and review some of those things. So I'm just going to include those at the beginning of each seminar now. And I'll usually only try to spend like maybe three or five minutes, three to five minutes going over those basic definitions. I kind of assume most people have it at least a general understanding of options already. But today's seminar is gonna be on vertical spreads and it is a part two. We covered part one in our third seminar. This is the fifth one. So that was about about a month ago now. And that one in that one we covered the basics of vertical spreads and then we talked about debit spreads, right? So today we're gonna be focusing on credit spreads which is the other aspect of vertical spreads. So with all that said gonna have to include my usual full disclosure disclaimer. This presentation is for educational purposes. Past performance is not necessarily reflective of future performance, right? But I'll definitely show you guys the strategies, tell you what worked for me, things like that, right? So hopefully you'll find that useful and hopefully you guys have found previous seminars useful on things like our ER calendar spreads or cover calls, things like that. But let's get started here. So I kind of did this already, but Timeock analysts with Xtrades which is a Discord training community. We do have a mobile app and a web app in development as well so you can follow trades. But we focus a lot on providing education, play ideas, things like that and just to help people get going on trading and knowing how to trade more effectively as well as more profitably, right? So I've been trading for about seven years now. I focus primarily on swing trading and if you're wondering what that Bulbasaur is doing at the top, that's my profile icon on Discord and the X is our logo for Xtrades. So I'm not gonna go through that part since we talked about that. But if you guys aren't part of our Xtrades Discord I highly encourage you to come join us, right? I'll put that link in the chat. Apparently my OBS is not logged into Twitch so I am unable to post my link actually. That's a little bit awkward. So I'm gonna do this in a very rounded that way and post using my other account. I got the link in the chat now. So going back to our slides here. So yeah, definitely join us out and check us out if you haven't. And we do regularly stream these seminars every two weeks and on a Monday through Friday basis we have 007 of Wall Street here. He's another trader with Xtrades and he provides ER reports and charting throughout the week, so after hours. So definitely check that out. All right, so today let me go through that quick run through of option definitions so everybody's on the same page. Then we're gonna talk about vertical spreads again. Again, I'm just gonna kind of whiz through that since we did talk about that in seminar three. If you need to learn more about those things later refer back to the old seminars. They are uploaded on a Google Drive now. So Twitch only lets us store it for up to two weeks and I haven't gotten around to editing and uploading these videos yet or seminars on YouTube or other platforms but I have uploaded the unedited versions on a Google Drive and that link is available in our Discord. So again, check us out on Discord. Then we're gonna be going through credit versus debit spread mostly focusing on the debit spreads aspect and then we talked about this last time as well but exercise an assignment for those debit spreads like the risk of that aspect and then we're gonna go through Q&A and then throughout towards the latter half of this seminar we'll be doing actual examples and then we'll see if there's any good plays to look at for credit spreads or if there's any artsy guys wanna look at, right? Okay, so basic definitions here. What are options, right? I consider them to be basically insurance, right? So the textbook definition is a financial derivative for an underlying security that offers the owner of the contract the right to buy or sell at a pre-specified price. So calls give contract holders the right to buy at that strike price and puts give contract holders that right to sell their shares at that strike price, right? And there's always an increments of 100 shares, right? One contract gives you the right to buy 100 shares or sell 100 shares. And if you're on the opposite end of this trade if you're an option writer, for example then you have to deliver those shares, right? Or just depending on the trade that you're taking. So other definitions here. So options are alert at X trades we always alert by the action. So it's gonna be BTO which is buy the open, STO which is sell the open and then if it's B instead of an O then it means we're closing, right? And it's gonna be a ticker symbol. So TSLA for Tesla, Amazon, AMZN, et cetera, BA, Boeing, right? Then we're gonna have the expiration date. So one is that option expiring the strike so that the price that we are going to buy or sell those shares at if we exercise it, right? And then the price paid for that options contract. Other important definitions, ITM, ATM, OTM, right? So that's in the money, at the money, out of the money respectively. And it's just, when the price of the asset is past the strike, is it in the money when it's at the same price? So for example, BA 200C and BA is at $200 and that means it's at the money and then out of the money is the opposite money. Oh, and hey, 007, welcome to our stream today. I'm glad you can make it. And also thanks a lot, young bull, for helping out today too. But yeah, if you guys have any questions, feel free to drop them in the chat. So option writer, that's the person who's selling the contracts. And with a credit spread that we're talking about today, we are actually, we are selling contracts, right? But we're also buying, that's why it's a spread. But okay, so intrinsic value of a contract is any value that is in the money. So that's usually thrown between the asset price and the option strike. And extrinsic value is the premium, the extra premium that you're paying for a contract. And usually we're dealing a lot with extrinsic value of options. Legs, so like when you have options with options strategies with multiple contracts, which is whenever you have a spread, right? Then each part of the strategy is called a leg of the contract, sorry, of the option strategy. All right, Greeks, so there's five main Greeks that I'm gonna talk about right now. Hopefully you guys are already familiar with this. We have Delta that measures the change in option price when stock price moves, right? So if Delta is, so Delta is always gonna be from zero to one, right? But if you see a Delta say one, or maybe that's not a good one, let's just say a Delta is 0.5, right? And say that your stock price moves up $1, that means that the options price is gonna move up by half of that, so it's 50 cents, okay? Gamma is the change in Delta as stock price moves. So as a asset moves closer to the strike price of your options contract, the amount that Delta changes is going to change because the probability is higher, right? The probability of it going into money is higher or maybe less probability of it going into money. And then so Gamma helps us to measure what the change in Delta is as stock price changes. So Delta is not static, right? It's changing depending on where the price of the asset is at as well. Vega is for change in options price as IV changes, and so implied volatility, right? Delta is decay in option price every day as the expiration gets near. So if Delta is say 250, then that means that on the next day, if you're holding a contract for one whole day, then you expect that contract price to decrease by $2.50. And of course, this will change over time as well. In a row, this was incorrect at the last time. And you might notice that the fault is different as well for this one because I fixed it, but it measures a change in option price as a change of interest rates. Usually this is not too significant for us as traders. All right, going into the meat of things now. So what are vertical spreads? So a vertical spread, basically when you look in options chain, right? Then that's just, you know, when you go and put it in your order for your option strike, you see all the strikes listed out on a vertical basis, right? It goes from, I don't know, say $100 all the way down to $0 strikes, right? You probably wouldn't have a $0 strike, but you know what I mean. So basically, you know, because we are trading two contracts off our spread that is up and down this chain, that's why they're called vertical spreads. So we're basically buying and selling two different strikes on the same expiration date. Now, if we were buying and selling two of the same strikes on a different expiration date, that's what we call a horizontal. And that's because when we go across time, usually we measure time on the X axis, right? Or if you're looking at a calendar, you go left to right, right? Usually that's how we think of it. And so that's why it's called the horizontal. But in this case, we're looking at verticals, just two different strikes, same expiration date. It could be either calls or puts, and then you have debit and credit spreads, right? So today we'll be focusing more on our credit spreads. And for debit spreads, refer to the third webinar, which was presented last month. Those are uploaded in a Google Drive, and you can find that link on our Discord. So what are credit spreads? So credit spreads are somewhat directional option plays. I actually forgot to change this when I was typing in debit spreads and I changed the credit spreads. So they're not really directional plays. I'm gonna have to correct the slide. They can be slightly directional, but they're more neutral rather than directional, right? But you can add a slight directional spin to it if you want and I'll talk a little bit about that. When we talk about the use cases for credit spreads. So in order to do a credit spread, what you're doing is, let me read this. I'm not sure if I even fixed the slide. You buy the further strike and you sell the closer strike on the same expiration date. Yep, I think that's correct. Yep, that is correct. So I did change that. So you have a net capital inflow, but because you're selling a closer strike, the closer strike is always gonna be worth more, right? Because there's a higher probability of that closer strike going into money, right? So then when you sell the closer strike, you're gonna be selling it for more than you buy the further strike. And so therefore you will have a net capital inflow or a credit. And then direction of your play is gonna be determined by whether it is a call or a put. If you're doing a credit spread on a call, that means you are bearish neutral, right? You're either neutral or you're thinking that it's gonna go down. If you're doing a credit spread for puts, then that means you are bullish or neutral. So that means you want the stock to increase or to stay flat, either or. And I kind of considered an income type strategy and that's because data works to our advantage in this case as time passes. The amount of total premium that we have collected will generally increase, right? Pros and cons of credit spreads. So the primary advantages of a credit spread versus say naked selling of calls or just buying puts is that it's cheaper to play. Because you have a defined range that you're playing. So it helps to offset costs and there's also less risk, right? So if I was just, you know, say I was bearish on something and I could buy puts if it's really bearish, I would probably just buy puts, right? But if it's, if you're only like slightly bearish or you think it's just gonna go flat or maybe just underneath a resistance area, you know, probably a credit spread would be better than just doing naked puts. But then also there's the other side of it where you could just, you could also sell calls, right? And I highly do not recommend just selling calls. Because if you just sell the call without having the other leg to create a spread, then you're introducing yourself to unlimited risk, right? So if I sell, I don't know, say Apple 140C or something. Or $5 or whatever, then that means that my premium only covers me up to 145 and that's my birth even point, right? So if Apple somehow goes to $200 and I'm suddenly on the hook for, you know, $55 or times 100, which is $5,500. So because with calls, it's unlimited risk because a stock can go as high as it wants, you know? And so that's why we prefer to use a spread in that situation because we don't wanna just sell a naked call and be at that unlimited risk, okay? So primary disadvantage, you have limited profit and you have a chance of getting assigned if the sold strike is in the money. So with the limited profit aspect, I mean, it's true that if you're selling anything for a premium, you're going to have limited profit because your profit is limited to the premium that you sold, right? That's the credit you receive. So, but in addition to that, with a spread, that profit gets reduced even more, right? But at the same time, it's a lot cheaper to play as well. So as a ratio, you can probably find a good balance. It's probably be more clear as you see more examples and do it more often, okay? So debit spreads, my main focus here, but just gonna briefly touch on it, right? So again, directional place works by buying a closer strike and selling a further strike. So this is kind of the opposite of our credit spreads, right? It's exact opposite. And you have a net capital outlay, meaning that you're paying money for this spread play in the direction, again, based on what there's a call or puts, except this time, if you're doing a call debit spread, that means you're bullish and you're doing a put debit spread, it means you're bearish. So it's the opposite of credit spreads. So it's just a cheaper, less risky, higher probability play than having straight calls or puts. And it's kind of for the same reasons as we mentioned for credit spreads. This is a chart of the different types of vertical spreads. I'm not gonna go through this whole chart since we did talk about it before as well. But I just wanna highlight one thing here, and that is if you look at the credit spreads, right? The two columns for the credit spreads, you notice that I say use in high volatility situations, okay? So that's something you wanna keep in mind. So when you're doing a credit spreads, it's more advantageous to use it in high volatility situations, meaning that the IV is elevated because that also means that the premium of that contract is elevated relative to normal. Yeah, and the way you can assess whether it's high relative to normal is by using something called IV Rink. And you can check that out on bar chart.com, which is something, a tool that you probably see me use a lot. But we'll be going through some of that in the more practical section later. So how to play credit spreads. We mentioned this earlier. So you're gonna saw the closest strike and buy the furthest strike, right? So when are you gonna use it? There's really two primary, I guess, scenarios of using credit spreads, or not two scenarios, but rather two ideas of using credit spreads, right? So anytime you would wanna get a call or put, but you wanna limit cost, risk, or the asset is not in a extreme movement of momentum move, then you can consider using a spread, right? And this applies for debit spreads as well. So you can choose to use a debit spread or you can choose to use a credit spread, right? You know, if you are more bearish or bullish, then you would use it in the money or at the money credit spread. And the reason why if you're more bearish or more bullish, and this more bearish or more bullish is on a relative scale, right? So really it should be two sentences here, but if you are more bearish, rather than just slightly bearish, then that means you're expecting a bit of a bigger move, right? So then you can collect more credit if you pick something that is in the money. If you're selling credit spread that is in the money, right? But in order for that to pay out, that means that the stock price has to go below the strike you sold. So that means that it's also a riskier move, but if you're more bearish, then that's something you could consider. On the other hand, the same thing with your more bullish, right? If you are more bullish, rather than just slightly bullish, then it's the same thing. And then if you're more neutral, you just expect the stock to mostly stay flat, then it would be recommended to use something that is at the money or out of the money credit spread, because that just means you just need a slightly neutral play and a bearish play would also pay out, but neutral works as well for at the money or out of money, right? So these are plays that you use when generally speaking, when you're mildly bullish, neutral or mildly bearish, neutral, depending on if you're doing it on calls or puts, right? So usually when you close it, I usually like to close them for 90 to 95% if of the max total value of the spread, if it is expiring out of the money, right? So I usually just, I don't like to wait until the very end of the day. If my credit spreads are going to expire that day, I usually just like to close them out personally if I can get 90 to 95%, then I'll just get out, right? The other situation is, you know, if the trade hits certain support resistance area and it looks like it's going to change directions, then sometimes I may also consider closing out at that point, just like the eye way with any other trade. And max profit is gonna be achieved whenever the asset price is below the sold strike at expiration. So how do you find good credit spreads? So these are just some general criteria and guidelines. They aren't absolute, okay? So it's just for reference, you can play options. You know, there's as many ways to play options as there are options out there. There's so many different strategies, but these are good general guidelines for credit spreads to get you started. If you find a particular certain niche strategy that works for you, then definitely use that, right? But generally speaking, for Delta, you know, the golden number for Delta that's recommended by a lot of people is 30, right? So we're gonna look for that net Delta difference between your two strikes of about 30. And so usually we're gonna be aiming for something between 20 to 45 to give us some leeway. And IV really, I say 2X Delta is reasonable here, but really you just wanna sell high IV. And that's just like what I mentioned earlier because when IV is high, that means the premium on those contracts is also high. So we can get a larger amount of credit for the play that we're selling. And for strike or money-ness, usually we're gonna be looking at something that's out of the money, maybe about 5%, I think it's good. But in the end, what I usually do is I just look at the chart to determine where our support and resistance is. If I think something is a good support or a good resistance, then I'm gonna try to include or incorporate that into the strikes I am looking at. And that's usually how I determine my play. Exploration, so this is related to data again, right? Because of the credit spread, we want time to quote-unquote accelerate and just let us collect our full credit without having to pay anything back, right? So we just want the thing to expire worthless. So time is on our side in a sense as long as it's out of the money. But usually we're gonna be looking for something about around 30 days, okay? So you could do weeklies too, I think that's fine. It does require more management, but 30 days is that ideal area. And that's just because of how data works. And so I put on here 30 days to 45 days, but you could also do say 15 to 45 days if you want, right? But generally speaking, we're gonna be looking for those monthly calls. And the reason for those monthly calls is because it affects pricing and demand. You're gonna find a lot more volume on those monthly calls. So it's gonna be a lot easier to play spreads on those and it's gonna be easier to buy it as well as to sell it. And that ties into all those things that are listed here. If there's a bid and ask spread, the more interest there is in a certain options contract, the easier it is to get a better or a fair price on that option, right? That profit versus risk, right? So usually I'm gonna be looking for something between a one to three ratio of credit received to spread with, okay? And the MOA 7 actually provided a really, really good example to me of a spread that he took this week. And I think he actually mentioned on Monday or Tuesday to me, he was like, hey, this is a really, really good time to take a credit spread on GME. And so I'm gonna talk about that in a bin, show you at play that he made. But the profit versus risk, I'm gonna be usually looking at a one to three ratio. And why a one to three ratio? This is kind of related to Delta II actually, but this we're looking for something that people think is going to pay out for them on the other side of the trade, right? So usually if you're playing on the long side with a credit or not credit spread, a debit spread, you wanna weigh your risk and reward too, right? Like if I'm paying $9 to make $1 on it, debit spread, maybe I won't find that to be such so attractive, right? And so it's the same thing for this. That's why we're looking for that one to three ratio cause it provides a good balance of risk to reward for us as well as them because we need somebody to buy those spreads that we are selling. Other considerations are gonna be ER volatility events. So those kinds of things can always draw a wrench into the works when we are playing like anything where we receive a premium for, and that's because it can affect IV, for example, of our options, right? And when IV changes, that changes the price. So generally speaking, when we're receiving credit, we want to sell at the highest IV, right? Cause IV helps increase the profitability of a play if you are long on it, right? Because if I'm long on a options contract and IV increases, that means the man for that contract is increasing and that means people are paying more for that contract now. But even if the stock price or the asset price doesn't change, if IV is increasing, then suddenly my call is worth more. So you see that happen a lot, right? With anything that's, you know, if any news drops or something like that, you'll often see IV suddenly spike on a certain contract and that affects pricing, even though maybe the stock asset hasn't changed as much. So those are the things we're looking at now. Oh yeah, data. So the reason why we're looking at 30 days is because of the exponential decay of data. Usually you see a significant increase in the data decay starting at about 30 days. And so that's why when we're looking for crisp spreads, we're looking for something around this 30 day mark because that's when we'll start to really start to notice that change in premium pricing. And so that's what we're looking for in our credit spreads in order to basically maximize our gains on their credit. You can do weeklys as well, of course, because it's even faster at weeklies. So breaking down the credit spreads, so the spread width, that's the difference between your two strikes, right? That's a max theoretical value of the play. So that's the amount, the total amount that you're risking on the play, right? And then the credit received when opening the spread is the max profit of the play. So when you are selling a credit spread, the amount that you receive in the beginning, that is already the most that you can gain from that play, right? So going to go through some examples, calls. So for this call example, it's going to be a, what is it called? A bear credit spread, a bear call credit spread. So in this case, we're going to be selling to open the XOM, XOM, 60 calls, and we're going to buy to open the XOM 65 calls. So the max value of this spread is 65 minus 60, right? That's the two strikes. That's $5 or an average of $500, right? So that's the max risk of the play. That's how much collateral plus credit that we need in order to play this spread. So when you're doing a credit spread, you need to have collateral because you need to be able to cover the max amount that you can possibly lose, right? And then your max profit is going to be, again, the credit received. I probably should have wrote this down, but just say for example, 60 calls are, I don't know, $2 or something, and the 65 calls are like 50 cents or something. So you're going to collect a total credit of $1.50 or $150. So now your max loss is going to be 500 minus max profit, which is 150. So that's going to be a 350, right? So the total amount that you can lose on this place is 350, and that's the amount of collateral that you need to make the play. So you're going to receive $150, and you're going to have to have an additional $350 on top of that credit received in order to cover the play in case things go south. But okay. And then the puts example is kind of the same thing, but 600p, 580p on Tesla. So we're going to sell it open to 600p, so that's closer strike, right? I think Tesla is about like 670 right now. So this is really far out of the money, but this is just for example, your max value is going to be 600 minus 580 or $20 times 100 is $2,000. So the max value of that spread is $2,000. And then your max loss is whatever 2,000 minus whatever the credit received for that play is. Not going to go as deep in detail. It's the same thing as a call, except you're doing the opposite side. And remember you're always selling to open the closer strike and you're buying to open the further strike, right? It doesn't matter which direction it is, that's always true if you're doing a credit spread. If you're doing the other way where you're buying the closer strike and selling the further strike, then it becomes a debit spread. So actual example from 007. So this is a bear call credit spread that he took on April 5th, which was Monday. So in this case, he did a GME, he did on GME and he did a total of four, right? Four contracts. So in this case, he sold to open the 187.5C and then he bought to open the 190C, right? So if we look at this, that means he risked a total of 250. So because a play in total requires him to have $250, right? Because that's including the collateral needed to make the play. And then he risked that to make $1 because that's how much credit he received. So he got filled for $1 here. So that means on this play, we multiplied by four since he did for a total. So he received $400 total. And then if GME expired or this spread expired worthless or GME closed below 187.5 on April 9th, which it did do, then that means he collected the max profit. So he made $400 on this play. And the most he could have lost on this play. So you have four times 250 or 1,000, right? And then minus 400 to 600. So the most that he could have lost on this play was go negative by 600, but he made $400 on this play. So anyways, let's take a look at what happened to GME to see maybe why he took this play. Or I think 007 is in the chat anyway. So if he wants, why did you take the play 007? What made you message me on Monday? And GME, hey, I think it's a good time to take credit spreads on GME. Because I remember you telling me that. And I also thought it was good to do. But let's take a look at the chart here. I'll pull up GME. So GME on Monday. We'll have the one hour chart. There are the indicators here. So if we look here, Monday was April 5th. So that would be around here. So trying to see. So he took his spread around the end of the day on GME, right? Let's zoom in real close here. So on April 5th, I think he took it around two o'clock. I'm assuming it was Eastern time, which makes sense. So GME was probably sitting around over here, around 185 to 182 range. So let's see. My thoughts on this is that we gap down on Monday open right for GME and it rose back up to fill the gap. And then it wasn't able to break over to Friday Heights. You see that this wick here. So it wasn't able to break over Friday Heights and then it rejected. I think at this point, I love someone who's probably like, it's probably time to take a short and because GME is innate action, right? So we see that GME is downtrend here. And if you look at it on a larger timeframe as well, you know, you kind of know that GME is probably just gonna do this for a bit, right? It might return back. Actually it's at my trend line right now, but I think it might go down here possibly. But anyways, he picked 187.5 as the call he sold. And you see that is above the point where GME peaked later on in that day, right? So he picked 187.5, which is over here and that kind of matches closely with the Friday low over here, you can see this candle right here about 188. And then he bought the 190s. So I think he picked a pretty good area to play. Personally, for me, this is kind of aggressive, right? Unless you're really, really confident about the direction of GME. Like he's for me personally, I would have picked something like over here, but that's really, really high. So I might have picked something like 190 and then I might have sold 195 or 182.5 because I would have liked to keep above this. But I think this was a good play as well because he probably saw this reject over here and he picked that play up. So anyways, it did pop up over that the next day, but then it just the rest of the week was just complete downtrend for GME and he was able to max out the credit. Oh, and 007 said he did it because of share offering and he's fundamentally bearish, which makes complete sense because I mean, honestly, GME doesn't deserve to be up here. I actually also have post spreads on GME. So it's a debit post spread. I didn't do credit spreads on GME, but mine are way out. They're like June and my June spreads are for like 200 to $80 or something because I don't know. I'm just overall bearish on GME in terms of the price where it's currently at. Like, you know, I think GME can do good things. It could possibly turn around with better leadership. They're gonna need to make some big changes in their business, obviously, but they're trying to do that, right? And so there's a lot of hype around it, but currently the VAT current valuation is just a little ludicrous. I can see it being around $40, right? Like I know it doesn't really, you know, $2 or whatever it was before last year was probably ridiculously low or $4, but you know, even pricing in, you know, good changes, a change of business strategy, good leadership, et cetera, I think $40 to $80 is probably the best at where I could say that, right? I don't think it belongs over $100, not an hour anyways, but all right, enough about GME. Let's go back to our slides here. So again, thanks to both of them for this play. So I know I mentioned risk of assignment earlier. So when we have, when we're selling a contract, you always have the risk of the person on the other end of that contract exercising the contract. So in a case of 007's credit spread, he did 187.5 and 190C, right? So if for some reason, you know, GME closed a week at 188, for example. That means that in reality, 007 still profited, right? Because he collected a total of $1. That means he has a whole dollar leeway and his break even point is actually 188.5, right? So even if it was 188, he still would have made money. Well, let's just say it was, I don't know, one day or something and GME was at 188. Now you have the risk of assignment because somebody could choose to exercise so it was 187.5C because they think GME is going to recover and bounce and be bullish for the rest of the week or something like that. So they don't want to just let it expire or whatever. They want to exercise right now because they're super bullish on it. And if that happens, and if that happens, then he would get assigned, right? And basically he would have to, he would just end up the next day with just his, what was it, 190 Cs, right? And those are probably going to expire work at the end of the week because it broke his play up. So that's the risk of selling options in general. But if you usually pick something that's out of the money, this usually won't happen. But there is that risk there if you are being more aggressive with a in-the-money credit spread. So in that use case where you're super bearish on something and you do it in-the-money bear spread, then there's that risk of being assigned is a lot higher. Of course, the profitability is also like the amount that you can gain from it is also a lot higher. And so that's just the risk and reward aspects of it, right? As for the rest of this assignment and exercise setting, I talked about this previously. So I'm not going to go over it again, but if you guys want to look at how they manage it, you can look at it, right? So when things are going to expire and this pretty much applies to all brokers, they will try to close out your spreads if they feel like your account is at risk. And usually that happens about an hour before close. This is true for tasty works as well, which is my primary options broker. But yeah, that's just something you need to be aware of. Usually I just try to close it out myself before then. Again, if my play is out of the money and it is the day of expiration and I can collect 95% of the total max value, then usually I just close out spread. So hands-on application, how to identify a credit spread trade. So I really like using bar charts screener to find things. You can also just do it by charting, right? If you chart something, you think something is, there's a good resistance or support in a certain area, you can always play off the charts directly and then look up the options for that. And then you can run them through option strats, see what the risk reward profile looks like for it, right? If you guys have anything that you guys want me to chart or look at right now, feel free to just pop that into the chat. Otherwise I am just going to go through the screener, go through some charts myself and see if there's anything out there that we could find a good credit spread for. But yeah, if you guys have something that you want to look at or you want me to chart or talk about other questions about options strategy in general, feel free to just pop that in the chat. So we're going to do a bar chart now. And that website is barchart.com. Go back to my browser here and we're going to pull up bar chart which is already pulled up, right? I just based it on the chat. Okay, so news here. Alibaba fine 2.8 billion on competition charge in China. So I know a lot of people have been asking about that because I actually took some calls on Alibaba on Friday and this news got dropped. So really, I think this is just a continuation of all the things that have been going on because all the big tech in China have been kind of being pressed by China and fine by China for a while already, like discussions and things have been going on, restrictions. And that's why Alibaba has decreased so much in price over the past few months and that's because this is an ongoing thing. So this being fine 2.8 billion is significant, but we'll just see how the market reacts on Monday open. Personally, I feel like it's significant but I'm still not bearish on it and that's just because I'm playing off the charts and I think that a lot of the price action on Bala that's been happening lately the past few months is already showing or is already reflected in the price of Bala. Bala supports at 220 and so that's what I'll be watching if we break below that then I might bail out. But we do have April 30 calls. I actually have butterflies and that it spreads as well in that and that's the bulk of my play along with a couple of just naked calls. But yeah, I think personally I'm not too worried about it. Okay, so click on the wrong thing. So if you go to a bar chart, you got options here, right? And then you can pick the strategy that you're looking at and this is just a screener in general. This screener, frankly, it just shows you like possible play ideas. It doesn't tell you if the idea is actually good or not. You're gonna have to assess that yourself. It just gives you play ideas, right? So I highly encourage you to use filters, right? So you wanna look for maybe less than 30 day or maybe wanna change this to 45 days or something like that. So we can get closer to expiration and if you want you can add things like implied volatility, right? So you wanna look for something with high implied volatility. So we want our leg one to have high implied volatility. That's a leg that we're selling and we want leg two to have less implied volatility. You can also look at the IV rank and that IV rank is how you determine whether the IV is elevated right now compared to how the stock normally is. And why is this important is because some stocks have high IV regularly on a regular basis and some stocks have low IV on a regular basis. They just don't move that much, right? So usually your tech tickers usually have higher IV, right? Or another situation of elevated IV in general where you'll find something higher is probably around earnings reports, right? When you get close to earnings report usually the IV is heavily elevated compared to normal and usually you'll see a higher IV rank in those situations. So that's what you would use on that. Moneyness, you know, I like to do out of the money and I don't really like to do in the money strikes. Just, it's just a risk reward kind of thing. I prefer to just be out of the money. So I'll probably change this to something like 0%. And I'm not logged in so I can't do anything but that's what I would recommend. I don't prefer to do in the money you can if you want if you want to be more aggressive. But yeah, those are the primary things I'm looking at. You can also, again, do Delta, right? So you want not Delta to be between somewhere between 20 to 45 is what I recommend looking at first. Once you are more familiar with doing credit spreads, you know, you'll feel confident about it. Maybe you can just base it off of the chart or something and I think that's fine as well. There's no wrong way to play an option strategy usually as long as you have a valid reason for why you're playing it in a certain way. It's just like how many ways can you cook an egg, right? Plenty. Okay, so if we look here at this, you can actually customize what is displayed here as well. But usually I'm just going to be looking at probability, right? I like something like 30% looks good, usually to me. And I really don't like these kinds of plays though because this is in the money, right? The current price of CCL is 29 and this is like one is 20 and the like two is 28. That means you are super bearish on it. But you can also see that it makes sense because your max profit is 758 whereas is your max loss of 42 cents. That means if you're super bearish on this, I mean, you could do this if you want but it's not the play I would take because in this event, if I'm super bearish I rather just do a debit spread and play the opposite way, right? I rather just get 28p and I would just sell the open to 20p, right? Instead of doing it this way. But you know, this is all just preference. I think I really need to use those filters because without using them sometimes this gives you really, really weird plays. So maybe let's just reverse this, see something a little bit that makes a little bit more sense. Yeah, these are all in the money plays and I don't wanna flip through this. So, all right, forget about it. But yeah, if you use these filters you then you can find the results that we're actually looking for. Wood ETF, what's a wood ETF? Is wood ETF literally wood? That's great. Dude, lumber looks all a bullish. What's going on here? Is it because of expected infrastructure spending or something? Yeah, this looks really bullish. Honestly, I would prefer it to play a long position. I wanna see that 50MA retrace back down and this is definitely looks like all time high to me. So, you know, I guess you could also take a credit spread on it, but it seems because I have no preview above data over here to identify resistance points. I'm not particularly keen on that. Yeah, for me personally, I would look for a retrace back down to 50MA, right? So, something like, you know, maybe end of April or something if it's around $86, $87. I look for something over here to play up again. The ticker symbol for wood is wood, W-O-O-D. I don't know if 007 had something else in mind there, but yeah, it's wood. All right, so another thing here is option strat. It is another tool I like to use a lot and you probably see, you know, talk about it all the time and use all the time. So, if you look here, they have, where are my credit spreads up here it is. So, a credit spread or a call will be called a bear call spread, right? And then a credit spread on puts will be called a bull put spread. So, it's just different naming system than maybe what you're familiar with hearing, but they're all the same thing. Yep, so a bear call spread. And so over here it tells you, it used to tell you the chance of profit over here and it also used to tell you what the Greeks are. So we wanted to see that net delta of about 30, remember, that would be preferred, but now it's all blocked and that is because option strat has rolled out its subscription system. So now you can't see this information without subscribing, which I think is really annoying. The chance of profit has always been calculated based off of standard deviation of the move. So for any stock price, there is a standard deviation of a move and that's how they essentially calculate the probability of profit for any given strike and that for more advanced strategy, they just combine all these probabilities together based on those standard deviations to give you that chance of profit. So all these things you can self calculate too, of course, right? Net delta probably isn't too hard to calculate, you just grab the delta from this one, this is 0.587 and this is 0.527 and you just put them together and you get your net delta difference, which is probably 0.06 or something like that, right? But yeah, it's not really that hard to calculate if you want to calculate it, but it is a hassle to do that. And so it's a little bit, I think there are other calculators online out there that you can use too, but it's a little bit frustrating that option strat has moved all of those basic functionality into their subscription program, but you can still use this for the visualizer, which I think is the most helpful part, and you can even account for changes in IV, right? So if IV increases, you can see that the profile of the risk and reward changes. So if you're usually, I don't change this unless I know something is happening. For example, like if there's ER or something, then I know IV is gonna drop and you can actually look up the historical values of IV drops for ERs online or through like, I don't think or swim, it shows you the past six or eight incidences of ERs and they show you how much the IV usually drops for each of those incidences and then you can click that into your calculator to see what actually happens. Don't recommend playing over ER unless it's a spread. If you're playing naked calls or puts, chances are you're gonna get IV crushed and this is how you can tell what will happen for that. As you can see here, as we decrease the IV, you see that the numbers are getting more and more green, right? Compared to before, even though I'm not changing the chart range, right? So these prices are still the same relative to it, but as my IV decreases, it gets more profitable and as IV increases, it gets less profitable. And the reason why this is true is because this is a Reddit spread. And so that's why I mentioned this earlier as we were going through the slides, but I just wanted to help you guys visually see it too. It's that we wanna sell when IV is high because then IV can drop, right? Because when we sell a really high IV, more chances are higher that the IV will drop by the time our options expires. And so as IV drops for a credit spread, we get more profit. And if IV instead is low at that time when we open our credit spread and IV increases suddenly, we suddenly find ourselves at risk of losing more or being less profitable. And so this is why you need to sell high IV and you sell it when IV is high, okay? So that's that. But I feel like Spindle, it might have something to do with the Ultrabook that I am streaming this from. There's integrated GPU and it's an Ultrabook. So it's really lightweight. It might have something to do with me streaming it. And so that's why the sound might get in and out as it tries to broadcast and keeps up with things. And the fan is seriously going on high throughout the whole entire stream. So that might be it. But if turning it to 480p works for you, then great. But hopefully you can still read things when it's at 480p. Okay, anyways, I'm just looking at Tesla here because all right, this is a really, really messy chart. All right. So for Tesla, let's look for a possible credit spread play on Tesla. Personally, I'm actually in a few butterflies on Tesla and a butterfly is a combination of a debit spread and a credit spread at the same time. So we can talk a bit more about that in a future session if you guys are interested in playing butterflies. But they significantly reduce the cost of a play when you use butterflies, as opposed to just doing a credit or a debit spread. So we see here that we had a symmetrical triangle on Tesla right here, right? And then it popped up at the beginning of April and it hit resistance at about 710, right? And then it rejected that resistance and it retraced back into our symmetrical triangle trend line. So this is where I was looking to go bullish on Tesla, right? Because I expect, to me, this is a confirmation move if you're retesting it and it bounced off of it. So that's what I'm looking for. I'm looking for it to break out. But right now it doesn't seem like it's quite breaking out yet or doesn't want to, right? Let me delete that. You can see that it's in the downtrend right here relative to that. So as soon as it pops up over this trend line, I think there's a high chance it's going back up to 710. So you can see there's just a big indecision candle here on Friday for Tesla. I feel like there was some news on Tesla as well, but they don't recall. Let me see if there's anything in here. Yeah. Sometimes this news doesn't tell me, it increases price of Model 3 and Model Y for US. I think I saw a lot of vehicles in China. And I think Musk tweeted about a NIO selling or selling X number of vehicles on Friday. And so NIO had a little bit of an afternoon pump on Friday. So if we look at NIO, right? So you see this huge volume of spike on NIO towards the end of the day. This is around when Musk tweeted. So he's really good at his PR. And if you look at Tesla, Tesla did not do the same thing, though it also increased. But NIO increased more relative to the day's price action and had a larger volume spike. And that's just because of the tweet, I think. I don't know if NIO had other news as well, but I think this was a huge contribution factor for the sum of taking volume. It might be people or it might be algos that are following the accounts. Because there's a lot of algos that just read headlines and they go, OK, let's buy that right now. Whenever the positive news pops up or something like that. But OK. So if I was looking for Tesla and I wanted to do a credit spread on it, I would personally at this time probably opt to do a put credit spread, right? I mean, honestly, I probably wouldn't do just a credit spread right now. I'd either just do a debit spread or a butterfly, which is a combination of a debit and a credit spread. But just, for example, say that if I wanted to do a credit spread on Tesla, which I think you can still do that. I think Friday might have been a good time to do it. Because when Tesla dipped into this trend line I have for Tesla in the 15 minutes, like over here, this was probably a good time to open a put credit spread. And that means that I am bullish on Tesla. Because I think Tesla really, really wants to pop back up again, right? You see the rest of the market has been moving up a lot lately. I think Nasdaq is back to near all-time highs, right? Yeah, we're almost at all-time highs for Nasdaq again, just barely off the top. Spy is, I mean, it's all-time high, right? It's just moving up. So Tesla hasn't been participating as much in it, which frankly, I mean, it makes sense, right? Tesla is incredibly, incredibly quote-unquote overvalued as a company, I think, and they're pricing in many, many multiples of their earnings. But regardless, I do think that Tesla does want to pop back up. And then the reason for my basis or bias is because last time Tesla did this, I went bearish. And then it gapped up. So you can consider this to be a revenge trade for me, right? So back in September to November, I saw Tesla had died off the top. It was doing this move right here. And then I think around over here in October or something like that, I remember talking to 007 about this, about how I was going to go bearish on Tesla, because I thought that it needed to return back. It is all trend line over here at least, right? So 350 or something. And previously Tesla has done a, this is a 62% move in like a month. This was during the COVID crash, right? But I thought it was possible for that to happen again, for it to at least retrace back down to this trend line from that March low. So I thought that it was a good chance of that. So I took puts over here and they were paying out at first, right? And then suddenly Tesla announced S&P 500 inclusion and it gapped up and suddenly my play went from being green to just to break even, right? But except it was, I think I was almost at red on the position just because I had opened over here and I had lost value from data. So even though I had opened the hire and I had to get out right away because it gapped up. And so basically it broke up on this symmetrical triangle and it flew. So I, I'm not sure if the same thing will happen this time. But we have another symmetrical triangle here off the top right here. Frankly, I think it might form an even bigger symmetrical triangle. So I might go somewhere up over here to like 780, 800 or so and then retrace back down a little bit and play out a larger symmetrical triangle before breaking up is what I think could happen. This is all ignoring fundamentals and valuation and whatever, which frankly for stock like Tesla, which is a lot of hype behind it, I don't, you know we're just going to play off the charts and play the technicals, right? So anyways, I'm bullish on it this time and maybe it'll go bearish. But maybe you guys want to do the opposite trade with me but I have a lot of butterflies on Tesla so it's not as expensive to play. So I'm not too worried about it. Butterflies are more neutral in general. But anyways, credit spreads, right? So I would prefer to take a put credit spread over here and what I would do is, you know I know that is following this trend line up, right? That's about two touches on it. So I think this area over here is probably good, a reasonable support area. So that's about 670. So that's what I would look for. I would look for 670 to sell 670 puts. And then I would probably sell like one or two strikes from that, so 665 or something like that. Yeah. So let's take a look at what that looks like on our actual calculator. So what did I say again, 670, not this one. So if I look here, 670, let's just take May, one month from now will be about May 14th or so but that's not a monthly contract. May 21st is the monthly contract. So let's look at the May 21st contracts. And this actually works out a lot because it just means that even if you dip down here to say 660 and then Tesla bounces up, I say that in the April and I am bullish on it, right? But say for example, it goes down over here and then bounced back up, we have time for it to play out. And so this is why like even though options lose more value the closer you get to expiration, so 30 days and under is good for that purpose. And if we're playing credit spreads, we're corrupting premiums so we want it to expire faster, right? But you still want to, you can still consider taking longer plays like this because it also still gives you time for your play to pan out and you won't make as much money, right? So for example over here, if you look here on May 12th, if Tesla is, is this a bear call spread? Let's flip this around because I'm actually going the other way, right? So I want to, I want a bull put spread because I'm actually bullish on it, right? So if I get a 665 and 670, right? Let me refresh this just to make sure that it's current prices are more close. So if you look here, switch that to mid. So if you look here, this is going to be the price on Monday, right? So if Tesla is bullish as I think it is and it goes up to $700 on Monday, for example, and let me decrease the range so we can see that a little bit better here, then that means this play on that as $48 and we, our total outlay was $500, right? And we collected on that credit up to a 45. So that means the contract will be worth for 200 about, because we're collecting, this is a credit play, right? So this opposite of what you would normally think for a debit. So you would collect $48 here on $500, which is about 10%. So I'm going to do this in profit loss percent, max risk, or did I do my math wrong? Oh, it's because they're doing it based off of the risk instead of the total amount, including collateral. But okay, whatever, we'll just use theirs. So let's just say it's about 20%, right? So this is for April 30. So if I went to April 16th instead and you did 700, then you see that it's 40%, right? So you get a lot more value out of it if it's basically, it's expiring sooner, right? But the downside to that is, you know, if it's not bullish and if Tesla is flat or goes red you also lose more, right? So you see here, 671 is minus 8%, whereas this one is minus 4.5%. And just in general, more time gives you more time for your play to pan out. So if this goes down over here, for example, and it's bearish instead of bullish, like I think it is, then, you know, maybe it takes a week or two weeks, but then on the last week, I have April 30th. So, you know, then it will have, give me time for it to bounce back up from this support area. And I think that this 660 area is really, really good support because it bounces off of here quite often, right? You can see it bounce here as well. And then it can return back up here and that would get us back in the group. Long story short, kind of rambling here, that basically buying time or having time on your play is always a good idea. But yeah, usually you want to look for something about 30 days out and I usually like to play the monthly contracts. Sometimes if I'm more aggressive, I do play the weeklies as well. This is just up to you on how you want to manage your risk. But let's just use May 21st for this example. So here you see $500 is the total cost, right? That's the difference between our strikes. So in this case, we're selling the 670p for $50.23, which is really expensive. And we're buying the 665p for $47.83. Or did I reverse that? Okay, we're selling this for $50.23 and we're buying this for $47.83, right? So that gives us a net credit of 240 and our collateral total is gonna be an additional $260 because we get 240 credit. So that's $500 total. So our max loss is 260. So it's about a 50-50 split. I think this is a really, really good ratio here because it's actually more than one to three. Because remember we're looking for ideally about a one to three ratio or higher. Higher is good too, as long as you are confident in the play. And so basically, our break even is above 667. And 667 is above this pivot point right here. So I really do think that this is a probably a good play for Pesved if you are bullish on Tesla. And the thing about why you would take this Pesved is because maybe you just expect Tesla to just kind of bounce in this area like it's been doing for the past month, right? Tesla has been rejecting this 710 to 720 zone like multiple times, right? Like it rejected over here, rejected over here, rejected here. It retested it two times on two consecutive days and store rejected and then I did it again over here. So if you're not super bullish, but you're slightly bullish then a put credit spread could be a good way to play this. So you think it's just gonna close above 676. I do think that this is decent risk reward too. You get 240 and your max loss is 260. If Tesla closes below 665, that's where you have your max loss, right? So as long as it holds about 667.60, this is a good play and over time you will get more credit even though it stays flat. So that's the advantage of this spread type play is that even when it's flat and doesn't move, you will still collect some money, right? And that's just because data is on your side. So if you're neutral on it or bullish on it, I think this is a decent credit spread play on it. Otherwise, you can be like me and do a butterfly. So butterfly, I did it out of the money, butterfly so it's a little bit more bullish, but it works in a similar manner, right? Do you like debit or credit spreads more? Honestly, it depends on the situation hustling. So I do like to use both credit and debit spreads and that's why I really like butterflies because butterflies are a combination of debit and a credit spread. Usually though, I am more prone to play a debit spread than a credit spread, but again, it depends on the situation, right? Remember what I was saying about IV, we want to sell a high IV. So that means if IV on Tesla is not high, then maybe a debit spread is probably the better play, right? Because on a debit spread, increasing IV increases the profitability of our play, whereas for a credit spread, decreasing IV increases the profitability of our play. Otherwise, if all of us is equal and IV is the same, a credit spread and a debit spread, like if you're playing it in that same direction, will be functionally be very similar and will result in similar results in my opinion, right? If you're playing, like if your Greeks are all the same, it's just that you're in a reverse direction, right? Then the results are going to be similar. The difference is IV. When IV is elevated, you want to do a credit spread. When IV is slow, you want to do a debit spread. So that's the big difference here. I hope that makes sense to you guys. If you guys need me to explain a little bit more, just put that in the chat and I can further address it. What's been most profitable for me? Most profitable for me? Usually, I think my debit spreads have been more profitable for me, but in general, my best performing account this year has been selling. So selling options has been more profitable for me than being a net buyer of options. Right? So let's see. Yeah, all the spreads that I've been doing this year where I was a net seller have probably paid out more than the other way around. And I think that just has a lot to do with because of how the market has been the past couple of months, right? So if you look at the market here, right? You know, a pop-spy or Nasdaq, whatever you want. You know, we had a lot of crazy volatility here this year so far. And so these situations were times where spreads probably could have paid out more because you probably had high IV spikes during these times, right? So now that we're resuming a more bullish trend and this is speaking seasonally, right? So if you look at, you know, a seasonal chart, right? Let's look at close election year, right? So seasonally we know that, you know, February is usually pretty bearish and March is usually has some pretty big whiplash too like this. And then following that, you know, we should be bullish in April, bullish in May and then up to early summer or mid-summer as the market is bullish. So when this is, when you have a trending market, that is probably where I would probably do more, I would think that this spreads would probably play out a little bit better in a trending market. When you have more whiplash that increases volatility, kind of like over here, when you see all these ups and downs and that's kind of what we saw this year too, right? You saw this, we got this volatility, with volatility increasing, then in that case, the credit spread would pay out better because the IV is elevated. So I think this is all just a reflection of what the current market situation is. So just use the tools as the market dictates and that's what I would do. But yeah, I, so far this year, credit spreads have definitely paid out better, but in general for me, debit spreads have paid out better for me as a whole throughout the time I've been trading. The wheel strategy seems to be best lower risk higher reward. Yes, the wheel strategy is definitely excellent. You know, if you're not afraid of owning shares of a stock, then selling puts on a stock for a wheel strategy is very effective. So I wonder if there's anything that I would wheel right now. I've been wheeling AMC, right? And that's just because it had incredibly elevated IV and that's just because of all the GME hype and whatnot. And of course, I was bullish on AMC because it was at rock bottom back in January, right? I don't know how many of you guys remember, but in January, I actually alerted AMC calls, right? I think they went up like 10X or something. I don't even remember how much they went up by. But at this time, this is also when I took, started doing covered calls on AMC because I was like, this is rock bottom. It doesn't get any lower than this, you know, $2, right? It's hell of a support. I mean, it can still drop below that I've been wanting to, but the risk in your reward was really, really good. And so over here, if you wanted to just do a wheel, you could have just sold something like two P or even two and a half P, right? Puts, right? 2.5 puts or two puts and then just collect that premium that way. But, you know, for me, I just jumped, I skipped that first step and I jumped straight into buying the shares and doing covered calls. And the reason for that was because I was fairly certain that it had already hit bottom and it probably wasn't going lower. So I wouldn't be able to get the shares and I really wanted the shares. So this huge rising wedge, like, like look how long AMC has been in the falling wedge. Sorry, I said rising wedge, you're like, I meant falling wedge. It's been on a rising wedge for the past, you know, five years, since December, 2016, right? It's been in this falling wedge until 2021 January and it, you know, exploded, right? You know, it went all the way up to like almost $20 or something, if I remember correctly. Yeah, something like that, $20, about 17. I don't know if there's a wick here or not, but anyways, I was looking for this explosive move and it played out. So wheels are definitely really, really good if you can find a good stock to do it with. Sometimes I just jump straight to covered calls if I'm particularly bullish on it, but doing a wheel is definitely a safer strategy as it allows you to get in at a lower price if it dips and if the stock is already particularly expensive. And you don't lose anything from doing a wheel if you don't get exercised on anyways or assigned, right? You just collect the premium, which is great too. It's still a win. So, you know, covered calls are covered calls, wheels. I mean, covered calls are part of a wheel strategy, but yeah, those are definitely excellent. Let's see if there's anything that I would do covered calls on. Oh, I realized I was on a weekly try desk while it looks a different than usual. So, you know, PLTR, I think it's kind of stagnant now. I'm a little bit afraid of it forming ahead in shoulders here, right? And it's kind of a shoulder here. It's got a head over here and it's, you know, I'm not really sure if it's trying to form another shoulder over here. Maybe go back up to $30 and then drop, but it's a possibility. I know there's been a lot of interest in PLTR. I personally think it's stagnating. So, but you know, if I were to do a wheel strategy in PLTR, I'd probably pick, you know, something like 21P or something and I would sell those. I don't know how much they're worth. They might, the premium might not be worth it right now because it's a little bit elevated off of that. But you know, this is held good support. And so that's something I would look at to sell put set because if it's below this price, that's probably a good deal. And lastly, just completely breaks down. Basically this is the head and shoulders, right? And it goes all the way back down to, you know, like $11 or something, which is really where the next support is. So if you look at PLTR here, you see that on when it went on opening day price, when it hit the markets, the top of that was about $11. And you can see that over here kind of rejected in this zone. And then on the breakout, the breakout candle broke through this, right? So about $11 to 1140 is where I would expect support to be if we just play out ahead in a shoulder's pattern. I hope that doesn't happen. Don't think it is on the cards right now, but yeah, I would sell 21P on PLTR for a wheel type strategy. Let's actually look at that, just to see what it looks like. So this would be a short put, right? So short put here, what was this PLTR? So we look at short put on PLTR, let's just say that we're going to do a wheel on weekly. So if you look at the weeklies, 20P on PLTR, it's hardly worth anything. Yeah, it's $6, your max loss is $1,994. Technically, you're just buying the shares, but not a really, really great premium right there. So if it ever gets close to, if it drops back down over here to 2185, then I might consider doing a 20P or 21P wheel on PLTR. If you want to be more aggressive, you could probably do 23 or something too. And remember that this wheel strategy, the short put, you can also play it as a credit spread, right? So I could do 23P and I could buy 22P or something like that, right? All of these things kind of go hand in hand. It's just options just give you the ability to better define and manage your risk and change that risk profile of the play, right? And that's why doing spreads is so helpful. Most options expire worthless, right? That's just how they work. And so, spreads allow us to increase that probability of success, but it also reduces the profitability, right? Because usually you get less reward, less risk, less reward, more risk, more reward. It's just a matter of how you want to balance it, but with trading, I think the most important thing is to make sure that your accounts stay healthy, right? And that you can continue to go and play, right? PLTR is super flat, yeah. So with PLTR, actually, you could probably do like an iron condor or something, right? Pick something like, pick your range to be something like $26 over here and then pick like $20 for the other end and then just do an iron condor on it and collect credit that way. But you can also do just a put spread or just a call spread or credit spread as well. Both will work. It's pretty flat, yeah. Big caps have definitely been making big moves. Microsoft, have you gone to the other play from this week? Congrats, because we got a nice 40 plus percent move on it. It's been wild. Basically, it just bounced up off this support area and just kept going. My final price target for runners on that play is up here about $260 for Microsoft. But Microsoft has been incredibly bullish compared to, you know, the thing, I mean, the thing has also been bullish the past week or two, but Microsoft is going all time highs while everything else is just in the consolidation zone. Right now on Amazon, I'm a little bit wary about further upside just because of this potential for a triangle consolidation pattern here. So originally, we broke out of this triangle on ER and then they just dropped out the ER and it broke down. So it was like a fake out move here. And this is why we usually wait for confirmation of a breakout move and confirmation of a breakout move is a retest of the trend line and then we look for that bounce, right? Just like I was looking at here on Tesla, right? So on Tesla, I didn't go bullish on Tesla until I saw it break out this and I wasn't bullish when it broke out this, right? I waited until I saw it retest this trend line and then it bounced off of it. That's when I decided to go bullish on Tesla. That's why I went bullish. You know, I could still break down, of course, but that's what we're looking for. And we look for those kind of confirmation moves to prevent something like this from happening where we get a fake out where it popped up and then it broke down and retested it, but it didn't hold this trend line, right? I just rejected it again. And you know, I think this was a real move right here and it broke all the way back down to our pivot low of the consolidation. And this was a great buying area, honestly speaking, but everyone was super unsure at that time because the markets were tech anyways, just didn't look that great. But right now I'd be looking for disresistance over here on Amazon at about 3,380 or so. That's what I'd be looking for. If we can break up over this, you know, I think we could be bullish. I'd expect to head back over here about 3,430 as our first price target, but right now I'm still wary of entering here anyways. If you got in earlier, then you're totally fine, right? You know, we had a big move, but this is what I'd be looking for next week to see if we can get a rejection here and if we can get down over here, probably to the 0.618th area, which is about 3,290 to 3,300. And you can see this candle forming a base here, right? You got two bases with this red candle and this green candle that it basically bounced off the 0.618th area, right? So that's where I'd be looking to go along again if we can get a rejection here. If we can go back down here, I'd look for calls probably, with Amazon says it's always expensive, it's definitely gonna be a spread, right? So probably a debit spread, honestly. I might consider doing a credit spread, a bullish credit spread for this area, because I think 2,3,290 is probably good support. So I would sell the open 3,290 and then buy the open, one or two strikes lower, just trying to find that one to three risk reward ratio right there, and that's the strike I would pick, because I would expect that this 0.618th then to hold. So if we do reject here, that's what I would look for. Guys, I think we're gonna close our stream here, but you know, guys about any questions, last call for none. And be sure to also, if you haven't already, vote on the weekend report form. There, let me know what occurs. You guys want me to analyze for the weekend report. If you guys can do that for me, they'll be greatly appreciated. But yep, I think we're gonna close this, the seminar part of this for now. If you guys have any last minute questions, if you have to answer them. Otherwise, the next seminar, I think I'm gonna be pretty busy in the later half of this month. So I might not have another seminar this month yet. So we'll see about that. I think, you know, but otherwise it'll be in about two weeks, maybe the end of the month or the beginning of next month, is when we'll have our next seminar. It just depends on my schedule, but I do think I'll be really busy at the end of this month. So I might not be able to do another one this month. But I have the old seminars uploaded on our Google or on a personal Google Drive now. That link is available in the Discord. And, you know, if you guys aren't part of our Discord or do join us and subscribe to our Twitch channel too. I only do seminars about every two weeks. And but, you know, Monday through Friday, 007 is here for you guys. And helping you guys out with, you know, charting ERs and the analysis of the market. He's here after hours every single day, Monday through Friday streaming. So definitely come check us out at those times too. Yeah, I can share the Amazon chart. I can just put it in the chat right now. There's the chart, put that in the chat. All right, if you guys have any other questions later, you know, feel free to DM me on behalf of the answer any educational related questions on, on spreads and stuff or analysis related questions. And I hope you guys enjoy the rest of your weekend. Thanks, 007 for helping out in the chat today. And thanks, Yongbo as well. And thanks everybody for joining. Hope this session was helpful to you guys. Yep, I always forget to show this slide at the end, but there's nothing special about it, but there it is. All right.