 Hey, good morning everybody. Lilo here from smartoptionseller.com. Today is Saturday, March 27, 2021. Welcome to another edition of our Saturday YouTube videos. As you can see on the screen right in front of you, the topic of discussion today is that age old question. Selling put options versus buying call options. What is better if either is better? I get emails all the time. Lee, I'm bullish. Should I be buying calls or selling put options? What should I do? Which one is better? And which one will make me more money? Okay, so those are the questions that I get. So that is what we were going to talk about today. Selling put options versus buying calls. What's it all about? Is one better than the other? So let's discuss. And after that, we will jump into our Saturday synopsis where we look at the charts. We look at the indexes. We look at individual stocks to see what happened over the last week's worth of trading and try to get some information on what may be happening in the week ahead. We look at chart patterns. We look at support and resistance levels. We look at all different technical analysis. So let's jump right in to our lesson of the day. Selling puts versus buying calls is either one better. So the first thing that you need to understand is that in my opinion, neither one is better. There's no black or white answer. There's no right or wrong. It all depends on your outlook for that particular stock, your risk tolerance, how much money are you willing to wager and the probability of each strategy paying off better. Okay, so it really comes down to you gotta take all these things into consideration. How strongly do you feel that the stock can make a certain move by a certain date and how much are you willing to risk? And we'll take a look at the probability calculator to help us understand which strategy may be better or right for you. There's no right or wrong answer. It all depends on you. So let's go down our cheat sheet here and take a look at some of the pros and cons for each strategy, what people may think is a pro and con. Now, as you know, we are big option sellers at the SmartOptionsSeller.com. Selling put options is our bread and butter. We sell naked put options and we sell put option spreads. And I've just, over the 30 years that I've been in the business, selling options has worked for me. For my temperament, for my risk parameters, that's just what I like to do. And some people have liked it as well, but some people would rather buy calls or buy puts or be a buyer of options. That's fine. I'm just saying for me, selling options works. But let's go over the list here. So selling put options offers lots of room for directional error. Selling options is one of those strategies where you can be completely wrong on your directional assessment of the stock and you can still win on a trade. And that's a big deal for a lot of people. It was a big deal for me because trying to gauge the right direction for stock and where and when it may get to that price is a very hard thing to do. And when you're trading options, all options have an expiration date. So if you're a buyer of an option, whether you're a buyer of a call option or if you're a buyer of a put option, you have to get the direction right of the stock in a certain timeframe before the option expires. If the stock doesn't make that move and you hold it all the way to expiration, you will lose your investment. So you have to get the direction right of the stock. Now, on the other hand, selling options, whether you're selling put options or selling call options, does not rely on you getting the direction of the stock perfectly right. The stock can move in all different directions, up, down, sideways, and the seller of an option can still win in all three of those cases. Now, obviously you'll have an initial directional bias for stock, but as an option seller, if the stock doesn't make the move that you were thinking, you could still win on the trade. So that's why I like to sell options because there's lots of room for directional error. Buying options does not afford that luxury. So you have to make sure you understand where the stock is going to move to within a certain amount of time. But we're talking about selling puts here and buying calls because selling puts and buying calls are more of a bullish type of strategy. Definitely buying calls is a bullish... Buying calls is definitely a bullish type of strategy. Selling puts is more of a neutral to bullish directional, but both of them benefit when the stock moves higher. But selling puts offers lots of room for error. Buying calls, very little room for error. Definitely depending on which strike price you pick. Now, selling put options. When you sell an option, whether that's a put or a call, your reward is limited. Your reward is limited to what you're paid for that option. When you sell an option contract, you are paid for that option contract. And then that is the maximum amount of money you can ever make. That's your maximum profit. Whatever they paid you for the option, that's all that you can make when you're a seller of an option. Buying calls, on the other hand, has unlimited reward potential, unlimited. So you can make as much money as for as long as the stock moves in the right direction. So that is the appeal to option buyers, is that, oh, wow, I can make as much money as possible. But you have to remember, the stock has to move in the right direction in order for you to make that kind of money. And it has to move in that right direction within a certain timeframe, meaning the expiration date. Lots of people get, they see the money signs when they buy options. They think they're gonna make all this money, but they forget that the stock has to actually make the move in the time allotted for that to happen. And lots of times, it doesn't happen. So yes, buying calls has unlimited reward potential, but the probability of making that reward is a lot smaller. So that leads me to our next thing here. Selling put options has a high probability of profit, especially if you're selling out of the money put options, like we do at Smart Options Selling. When you sell out of the money options, you're giving yourself lots of room for cushion for the stock to meander and move around before you get into any kinds of trouble. So you have a high probability to make a profitable trade because you have so much cushion for directional error. Now buying calls has a much smaller probability of profit. The stock has to move in the right direction within the right timeframe in order to make a profit. It's very hard to do. So buying options, buying calls in this case has a smaller probability of profit. Selling put options has a higher probability of profit. Now lastly here, we wanna talk about the risk. There's always risks in every trade. Selling put options, as you know, or if you don't know, has a potentially unlimited risk probability, okay? There's a chance you can lose all your money when you sell put options. Let me just make sure everyone understands that. When you sell a put option, what you're doing is obligating yourself to potentially buy a stock at a price of your choosing. So let's just say you end up buying a stock at $50 a share. Well, the stock could go to zero. Stock could fall to zero dollars and you'll lose all the money that you've invested in that stock. That's the same risk that any stockholder has. Is that the stock falls? Okay, so when we're talking about selling put options, it's basically the same risk as owning shares of stock. The stock price can drop on you. Now, if you have a stop loss point, obviously you won't take a maximum loss. You just get out with your 10%, 20% loss, whatever you decide. Buying calls or buying puts, any buying of an option contract has a limited risk. Whatever you pay for that option contract, that is the maximum you can lose. If you buy call options and the stock drops to zero dollars, the most you can ever lose is whatever you paid for that call option or that put option. So the risk is limited, yes. The risk can still be big. If you paid a lot of money for that call option, you can still lose it all. But with selling puts, you have the risk of the stock dropping all the way to zero. So we have all these potential pros and cons for each. Now, right here, I said there are pros and cons to each. You have to decide what works for you, okay? Selling puts offers lots of room for directional error. Buying calls, a little bit of room for directional error. Selling puts has a limited reward potential. And buying calls has an unlimited reward potential, but that leads into the next one. The selling puts has a limited reward potential, but the probability of making that reward is very high, okay? Buying calls, yes, you have unlimited reward potential, but the probability of making that reward is very small. And the risk I just talked about. So once again, it's you have to weigh out what matters to you most, how good are you with your potential directional stock picking abilities and how much money you wanna risk. So there's goods and bads to each strategy. Now to me, selling options has more good than bad, so especially selling put options. That's why I've been selling puts for the last 30 years and that's what I teach people to do. So let's break it down. Let's take a look at an example here and I'll run some numbers through the probability calculator and we'll see which may work better for you. And the last thing to hear down, the biggest factor is to always know what your break even price is, okay? When you buy or sell an option, you always have to figure out where on the stock price is your break even level. That's very important to understand because that way you'll be able to possibly take profits sooner and or you'll be able to lock in losses at smaller than you could potentially take. You always wanna take small losses. You don't wanna turn into a big loss. So it's very important to understand the break even. We'll take a look at that. So let's go to, let's take a look at the charts here for a second. Let's look at Apple as we typically do. We'll go over some examples of buying calls versus selling puts and maybe it can help you decide which you would like better. Now, here's a daily chart of Apple, a bar chart. Each one of these dash marks, one of these bars is one day's worth of trading, okay? I'll try to open this up a little, move myself over here a little and let's widen this out. So you can see each one of these bars is one day's worth of trading. And here's Apple and it hit all time new highs around $145, $145 a share towards the end of January, 2021, okay? And you're thinking, okay, Apple's going up. I wanna buy some call options and what happens? Apple starts to trade down. So if you're a buyer of call options, you're losing money. So you have to figure out when, where do you think the stock's going to go? Now, if you bought some call options here and Apple went up, you're thinking, great, I'm making some money, but did you take your profits? Because if you didn't take your profits, now Apple's gone all the way back down to where you first bought the call options. So you've given back profits. So it's very important to understand that when you buy or sell an option, especially when you buy an option, you need to lock in gains at some point. And those gains could come very quickly and they can get given away very quickly as well. So that's one of the reasons why option buyers fail a lot is because they don't lock in their profits. They think, oh, I can make unlimited amounts of money. I'm gonna hold this option all the way to expiration to give myself as much time as possible. And one thing you need to understand is that you don't have to hold an option till expiration. You can get in and out at any time, even though there might be three months left until the expiration date and you've already gotten 100% return on the call option that you bought, maybe it's time to take some profits. Never hurts to take profits because you can see stocks go up, stocks go down. And that option that you bought is like a ticking time bomb. It's ticking away towards expiration. And as it moves towards expiration, it has less and less value. So you're giving up gains, you're giving up potential profitability if you don't take some money off the table. So be very careful when you're buying options. You want to take profits off the table. All right, so let's look at Apple. So here's Apple. It goes up, it goes down. Let's take a look at some options on Apple and see what we can do, whether buying calls or selling puts is better. So here's the option chain for Apple. We have call options on the left, put options on the right. Option chains pretty much work the same way. Call options on the left, put options on the right. Very important to always look at the bid-ask comms. Those will give you the most up-to-date value for the option, bid-ask comm for calls, bid-ask options for puts. Now, Apple last trade was right here, about $121 a share. Let's just say we're bullish. We're bullish on Apple. What do we want to do? Do we want to sell a put option or do we want to buy a call option? And once again, that'll depend on your outlook. How far do you think Apple's going to go? How, when do you think it will get there? And what's your risk tolerance? So let's take a look at put options first because put options is our bread and butter. That's what we like to focus on. Now, Apple's at $121 a share and we're thinking, okay, we want to get bullish on Apple but we don't want to buy shares. We don't want to buy call options. We want to sell put options. We want to give ourselves an opportunity to potentially buy Apple at a much cheaper price than where it currently is. It's at $121 now. And we're thinking, you know what? $90 would be a nice place to potentially buy shares of Apple, 90 bucks. It's a $31 discount to its current price. It's over a 20% buffer between Apple's current price of $121 and $90 a share. It's over a 20% cushion and it's got a $31 discount. So we think, okay, we got to sell a $90 put option. Now, this is just an example only. This is not a recommendation. So we look at the May 21, 2021 put options, 55 days to expiration. The 90 puts right here. Went out Friday, March 26, 2021. 30 cent bid, 42 cent offer. So we figured we could sell these somewhere in the middle, 35 cents a contract. Okay, so we sell this put option, this 90 put option for 35 cents per contract. That means someone will pay us $35 right up front. 35 bucks we get in our pocket and now we're obligating ourselves to potentially buy 100 shares of Apple at $90 a share. So that's how you sell a put option and that's what you get out of it. And we're selling the $90 put for 35 cents a contract. That's actually $35 in our pocket. You have to multiply the prices by 100. That's the option multiplier. So what are the chances of Apple falling from $121 down to $90? Well, but what we do in this case is we look at a probability calculator. And I've shown this in just about almost every video that I've done. Probability calculator can help you see the chances of a stock moving from point A to point B and it'll give you your chances of that option working out or not. And in this case, we don't want Apple to fall from $121 all the way down to $90. Why? Because we just want the option to expire worthless and we'll walk away with our $35 that the option buyer paid us. But if Apple does fall down to $90, then we'll follow through with our obligation and buy 100 shares at $90 a share. It's a nice $31 discount. So in the probability calculator, we put in the current stock price, the days until expiration and the volatility number, which is about 35% for Apple right now. And we put in the strike price of our target in both boxes, $90. That's, we want to see what are the chances of Apple falling from $131 all the way down to $90. And we click on Go and here's the two bottom boxes on the corners is what we want to concentrate on. There's a 98.5% chance that Apple will not fall from $121 all the way down to $90. So we know there's about a 98.5% chance we won't have to follow through with our agreement and buy 100 shares at $90. And that's fine. We don't care. We'll just take our $35 that the option buyer paid us and we'll go away and we'll sell some other put options on other stocks and we do this all year round. Just collect all this money, okay? So that's only, we get $35 and there's only a 90. There's only 1.5% chance that Apple will fall that far. So let's look at the other side here. Let's look at buying a call option. So let's just say someone thinks that Apple's gonna go up in price sometime in the future and they don't wanna pay a lot of money for the call option. They just want to take a gamble, think that Apple's gonna go up. In the next 55 days, they think Apple could rally all the way up to $160 a share. Let's just say, you can choose any level you want. Here are the strike prices. You have to decide where do you think Apple might go to in the next 55 days. So someone says, you know what, I'm gonna take a stab but I think Apple could rise up to $160. And that option will cost about 32 cents a contract. Here's 27 cent bid, 32 cent offer. Do something in the middle. So you buy that contract for 32 cents a contract. That's $32. All it takes for you to get into this trade is to pay $32 to the call option seller. Now, once again, we wanna know what the break even is. Where does Apple have to move to by expiration if you hold it until expiration in order to make any money on this trade? Well, Apple has to move up to at least $160 a share. You're buying that 160 call strike. And you add the 160 to the price that you paid which is 32 cents. So Apple has to move up to $160 and 32 cents just to break even on the trade if you hold it for the next 55 days which is what most option players do. So let's take a look at the chance of Apple going all the way up to $160 and 32 cents. And we put it in each box, 160, 32. Click on go. So here's what it's telling you. There's a 98% chance that Apple will not move that far up in the next 55 days. Conversely, there's about only a 2% chance. 2% that Apple's gonna move up to your break even. Do you want to take a trade that only has a 2% chance of winning? That's up to you. If you're thinking, well, it's only $32, I don't really care. Well, that's fine. That's up to you. But just know you have less than a 2% chance of Apple moving that far. Now, let's talk about, as I said earlier, stocks can move pretty quickly and you can take some money off the table. Let's just say that Apple moved from 121 all the way up to 140, let's say, in the next week. Well, then your option will be worth a lot more than the 32 cents that you paid for it. It could be worth $2 a contract at that point, maybe $3 or $4 a contract at that point. We won't know until it actually happens. But we know that you can take some money off the table. You bought something for 32 cents. Now you can sell it for $2 or $3. You better take some money off the table. You don't have to wait to 55 days because Apple can go up and then it can go back down and give back all that money. Let's take a look at the chart one more time. So here, let's say you bought the contract for 32 cents when Apple was here. Now Apple jumped all the way up here. Now that contract's worth $3 or $4 a contract. You can lock in a nice gain. You can make maybe 10 times your money. That's 1,000%. If you sell out your option here. If you don't, Apple comes all the way back down and now you've just given up those unrealized gains. So you have to play in the market. Sometimes you can't just sit and wait till expiration. Gotta take the money off the table. So the probabilities, as we see on the calculator, buying call options has a very small probability of paying off if held until expiration where the selling to put options has almost reverse. Selling put options has about that 98.5% probability of paying off. And in one trade, you're getting money. The other trade, you're paying out money. So you have to decide what's worth it to you. Do you think that Apple can really go far as you needed to in the time allotted? Or would you rather take the high probability trade of selling put options, collect your money, and then just wait to see if you get to buy shares of stock at $90 a share? So it all comes down to what you think Apple can do in a certain time frame. $90 a share where we're selling the put options. Here's the 90 strike all the way down here. Apple hasn't been down here in a long time. So that's why there's a very small chance that Apple can fall from 120 all the way down to 90. Very small chance. But people will pay you money for that opportunity. Okay, maybe I'll buy Apple for $90 a share if it gets that far. But the chance of that happening is very small, but people are still paying me for my obligation. Buying the call options, Apple could go up. Yes, if you don't take money off the table, you can give it all back. So you have to understand the risks and rewards for holding options all the way to expiration. It does, sometimes it works out better getting out early. How early? 25% gain on the option, 50% gain, you have to decide. Some people are happy making 10% a year on their money. If an option is gonna give you a chance to make 25, 50% in a week or two, why not take the money off the table? You don't have to wait all the way until expiration. So going back to our document, you have buying calls, unlimited reward potential. Yes, but the chance of that is very small, but you can take money off the table early. Selling puts offers lots of room for error, buying calls little room for error. With your buying calls and the stock goes up and the stock goes back down, your option's not gonna make you any money. But when your sell puts, the stock could go up, stock could go down, the stock could move sideways, and that put option's still gonna make money for you. It's just gonna decay away. That's how options work, they decay over time. That's why we like to sell options. So always know what your break even is on that call option, that Apple call option that we looked at. The break even's at $160, over $160. Apple's at 121. It's a long way for Apple to go in the next 55 days. Apple's gonna have to go all the way up to all time new highs up here at 160. This is the 160 level. Can Apple move all the way up there in the next 55 days? Not according to the probability calculator. So take it as you will. Selling put options versus buying calls. Lots of different things to consider. Here's the list right here. These are some of the things that I've come up with. So you have to decide what works for you. Yes, buying calls has that appeal of a lottery ticket. You can make gobs and gobs of money, but what are the probability of that scenario happening? It's pretty small. Selling options gives you a much higher probability of profit. Yeah, maybe the payouts are smaller, but they're consistent, high probability payouts. You make money over and over and over again. And that's just what we do, okay? So there's your lesson, buying calls versus selling puts. It all comes down to what your outlook is. How good are you in picking direction? If you're not good at picking direction and you can't figure out where the stock's going to go, you probably shouldn't buy options because they're just gonna waste away and you're just gonna give your money away. Now, if you're really, really good at picking direction and you really know how to find a stock that's ready to move, then buying options could be your thing, okay? If you're a good stock picker, buying options could be your way of making lots of money, but a lot of people aren't good at picking direction. They just don't know it. They don't know technical analysis. They don't know how to do it. So we default to selling options. It gives you much more room for error, lots of cushion for error, and you can still make money if the stock moves in the wrong direction. That's a good feeling. That's why we like to sell options. So there you go. There's your assessment of why or which it might be better or worse, buying calls versus selling puts. That's my input. All right, so I hope that's been helpful to everybody. Let's move on to our next phase of the video, which is our Saturday synopsis. We like to take a look at the charts, look at the indexes, see what happened over the prior week, and give an idea of what we see going forward. We always start with our SPY, Exchange Traded Fund for the S&P 500 gives us a good overview of the market as a whole. What you're seeing here is the SPY. I mean, I can widen this out a little bit. We look at bar charts. A lot of people look at candlesticks. We look at bar charts. Bar chart will give you the high, low, open and closed for the day. And as I've been saying before, if you've been watching my videos, the closing price of the day is the most important number on a bar chart or the most important for technical analysis while we look at charts. Why is that? Because it gives us a gauge of how things are finished for the day, where people were really laying their money on the line. So let's take a look at the SPY. As I've been showing over all of my videos, stocks in an uptrend will hug the 20-day and 50-day moving averages on my charts. I look at the blue 20-day, the red 50-day, simple moving averages, not exponentials, simple moving averages, and the 200-day simple moving average. These are the three biggies that most people who watch charts will follow these same indicators. Some people will look at 40-day, some people look at 100-day, but a lot of people look at a 20-day, 50-day, 200-day moving average. And when stocks are in an uptrend, you also wanna see the moving averages in an uptrend as well, upsloping, as I like to say. And when a stock is in an uptrend and they have a pullback, they will typically pullback to either the 20-day or the 50-day, and then they'll bounce. As long as the market and the stock is in an uptrend, they will typically bounce off of one of those levels. So let's take a look at what the S&P did. Now, last week, in the beginning of this week, the market was on a downslope, okay? This is yesterday, Friday, right here. This big move right up here was Friday, March 26th, Friday, down here was Thursday. So Thursday hit a low. The last two weeks, going into Thursday this week, hit lows, and it bounced right off the 50-day moving average. And look where we finished. S&P 500 was up a good amount yesterday. Let me see, what was how much? It was up over $6. The S&P was up over six points yesterday. That's a big move for the S&P 500 right here. Open this up a little bit more. So yes, when we have pullbacks, it can pull back to the 20-day, 50-day, it can even bounce below the 50-day, but see how quickly it runs back, okay? So it rallied up again, pulled back again, bounced Thursday on the 50-day, and Friday finished real strong. So once again, I'm still bullish on the market. In the long run, the market goes up over time. If you have a long-term horizon, holding on and getting in, getting bullish, will reward you over the long run. Now, if you're a day trader or swing trader, it's a much harder thing to do. You have to play the intraday moves and knowing when to get in and out on an intraday like that, or even every two or three days, it's really hard. The market is very erratic in the short run, but over the long run, the market tells you where it wants to go. Here's a monthly chart of the S&P 500 down here. Financial crisis 2008, 2009, down and up. The market recovers. Here's the meltdown in 2000, down and up, it recovers. We had the coronavirus last March, down big V-shaped bounce, the market recovers. So long and strong as I say, over the long run, market goes up. My retirement accounts, I'm just betting on the S&P 500 going up over time. It's easy, it's passive. It works, okay? But in the meantime, to generate income, we sell put options. We like to sell put options, give ourselves a lot of buffer for error, room for directional error. That's why we sell out of the money put options well below the current price of the stock. Take in money, sell put options on different stocks, take in money, repeat the process throughout the year. You make yourself a nice little side income. But in the long run, the market goes up. So we're trying to figure out how to get into a trade. When a stock is in a nice uptrend and it has a pullback, look for it to bounce on the 20-day or 50-day moving average. If you're trying to time your trades, wait for the bounce, wait for the confirm move back up again, and then you get in, okay? So the S&P looks good, finished a week real strong. Not, didn't hit all-time new highs, but look where it finished. This little dash mark on the right-hand side tells us where it closed for the day. So it closed right near the highs of the day. Here's our all-time new highs. So I think the S&P going into Monday next week should be starting out on a strong note, barring any horrible news coming out over the weekend. Let's take a look at the Dow industrials, which has been very strong, very, very strong, just like the S&P 500. In the uptrend, all the moving averages are sloping upwards. That's a good sign. Had I been in this channel here, popped above the channel, came back into the channel and bounced. You can see it right here. Bounced right off the 20-day moving average blue line. And look where it went. Had a good day. Thursday hit lows, and at the end of Thursday, it rallied all the way back. I don't know if you can see it. Let me widen this out a little bit. You can see right at the end of Thursday where it closed, little dash mark on the right side of the bar. So it closed Thursday on the high, Friday it closed on the high. So Dow looking real nice here, okay? And so let's look at the NASDAQ because that's getting a lot of attention these days because the NASDAQ is still a little on the weak side, hasn't recovered yet like the S&P 500 and the Dow. Here's a daily chart of the NASDAQ, mostly made up of tech stocks, as we all know. NASDAQ had this nasty move last month, made this Dow move, but did bounce, which was good, rallied above the 50-day and the 20-day right here these two days two weeks ago, but it came back off again. We've been seeing the sell-off in the NASDAQ, rotating out of the NASDAQ and into some of the Dow and S&P 500 stocks. But yesterday, Friday, you can see right here, this bar closed right on the highs of the day, a little dash mark on the right-hand side of the bar. So that's a good sign. And it finished above this little trend line, this support trend line that I drew a while ago. So the NASDAQ finished on the highs yesterday, still below both the 20-day and 50-day, but if it could get its footing here, it could possibly start the next leg higher. If the NASDAQ gets off its keyster and starts moving up, you're gonna see a humongous rally ensue, not only in the NASDAQ, but probably in the Dow and the S&P 500 as well. Everyone will start buying stocks. Now here in the U.S., coronavirus vaccines are really rolling out. We're getting millions of people vaccinated a day, got stimulus checks going out to individuals. People are gonna start spending that money. Businesses are opening up again. That means businesses are making money. People are buying products. That means businesses' earnings are gonna go up. That means their stock prices will go up as well. So that's all a good thing happening here. And people talk about interest rates going up. Yes, that's a possibility, possibility of inflation, possibility of the Federal Reserve raising interest rates, but that's not gonna happen until at least end of 2023, 2024. But people will get ahead of themselves. They start talking, well, if interest rates go up, stocks typically go down. Okay, that may happen in the short run, but in the long run, I've shown you the charts, stocks always go up over time, no matter where interest rates are. Yeah, we may get a reaction, we may get a bearish reaction, but over the long run, companies still pump out profits, they still make products, people still buy those products, and they make profits, stock prices go up. That's how it works, okay? So don't get scared out by the news, the fear mongers out there, everyone's always talking about when's the next bear market, when's the next bear market? Why do you have to think there's a next bear market? I don't, I'm in for the long run, markets go up. Okay, so that's the indexes. We haven't looked at the VIX in a while. Let's take a quick look at the VIX. VIX is the fear indicator, the volatility indicator, tells us two things. It tells us how much fear is out there in the market, meaning are people panicking and buying put options, and it also means, what's the actual dollar level of option prices? Volatility has an effect on option prices, and when volatility is high, option prices get higher. When volatility is low, option prices come down, and you can see this huge spike was last March, 2020, when the pandemic first started, and then volatility came back down. You know why? Because the market went back up. The price of the market and the volatility move inversely to each other. So obviously, the market had been going up, so volatility has come down. Now, we've got our long-term average here, around 20% volatility. It has broken below that now. So volatility has come down, fear has come down out of the market, and so option prices have gotten cheaper, and that just means the market feels more complacent. People are calmer, and as we can see, the market has been going up since last March. Here's the Dow Jones, here's the pandemic last March, hit the lows, and has just rallied ever since. So people are back in the game, stocks are going up, volatility is going down. So let's take a look at a couple individual stocks, see where we are, and see what's been happening. Now, we take a look at more of the popular stocks, because that's what people like to trade, and that's what people are interested in. So once again, let's take a look at Apple. We always look at Apple. I like to look at Apple because I'm long Apple. I want my investment to go up, but I also look at the charts to try to help me gauge where Apple could be going. So Apple had this congestion pattern blew out to the upside out of congestion pattern. That's typically what happens. It'll either go down or up once it starts coiling into this tight range, went up, went up all time new highs, and now has moved into this downtrend channel. You can see the blue lines that I've drawn, that's called a downtrend channel. But what I like here is that Apple has started to move sideways. Okay, it's trading right on the 20 day moving average here, still below the 50 day. So Apple has some work to do. It's definitely more in a bearish slant, but not down for the count yet. What I like is it has this little bit of sideways action, trying to get its footing. It has moved outside and above the downtrending channel. Typically if it was in the channel, we would have seen Apple start to tick down towards the bottom end, but it has gone above the blue line here. So it's trading sideways. So I'd like to see Apple try to find a bottom here, maybe a little circular bottom, and then start to move higher and try to take out, move above the 50 day moving average. We don't like to see the moving averages curl over to the downside. That could typically mean that stocks are either gonna trade lower or trade sideways for a while. So Apple's certainly starting to trade sideways. We like to see that. We wanna see Apple start to get off its, you know what, and start to move higher. But for now, maybe the selling is done on Apple. It's got the up sloping to under day moving average coming up to meet it pretty soon. And we want that to act as major support to under day moving average. We wanna see Apple continue to congest here and then possibly move back up. I'm rooting for the upside. I'm hoping for the upside, but time will tell. Once it's moving to this downtrend, it has to digest that movement. So that's why sideways action might occur before we see the eventual upside. Let's take a look at Tesla. Obviously a favorite to a lot of people. Tesla, we've drawn a number of these congestion patterns. Blows out, blows out congestion pattern here, went up a little, made another congestion pattern. So it was in this tight range. Then it went to the downside. Another congestion pattern went to the downside. Has moved back up. I drew this other little triangle here, congestion pattern. Now it's moved to the outside down below it. Tesla's still having a little bit of trouble here. It had to digest the massive, massive move higher. People taking profits, institutions taking profits. So Tesla's had a bit of a pullback. It hit $900 a share, went down to about 550 on the lows and it's trying to find its footing here, trying to find its footing. So Tesla could meander for a little or it may come down a little more to meet the uptrending 200 day moving average. So I see a lot of action going on, probably between $500 and $700 a share. I know that's a big range, but that's the range that Tesla plays in. It's going to meander for a little while. It has to digest this down move before the next up move can occur. It has to find people that are willing to buy now. Everyone has sold out who's gonna buy now. So it has to digest, it has to move sideways. And then when more people become comfortable with Tesla, then it will go back up. But we will probably see some more sideways action in this wide range here. Let's take a look at Amazon. And we use the patterns to try to help us gauge what's the next move. I've shown this every week. It's in this wide channel here. And it blew out of this congestion pattern here. It's trading below it. Trading below the 200 day moving average, trading around the 20 day and it's certainly below the 50 day. So Amazon's had a hard time to get off its butt and start to move higher again. It's below two of the moving averages. It's actually below all of them right now. Let me see if I can blow this up a little bit here. We can see, here's where Amazon closed yesterday on the highs, which is good, but still below all three moving averages. We have the 50 day here, the blue 20 day and this the 200 day. So Amazon's got some work to do. It has to figure out what it wants to do next. And it's stuck in this channel. So Amazon could certainly still meander a little bit more. Now, if you're selling options on Amazon, that's a great thing. Sideways action is a great thing for selling options, but it's a very expensive stock. So be very careful if you're selling options on Amazon. It puts our calls because Amazon could explode on you, move against you and that could be very hurtful. So be careful. What else? Let's take a look at Netflix. Netflix is another favorite, Netflix stock. Also in this wide channel here, meandering around its moving averages. So Sideways action is the name of the game right now for a lot of these stocks staying within this wide channel. I, you know, it's trading below. Well, just right on the 200 day moving average that has to act as the last line of support. We need to see Netflix go higher if you're bullish on Netflix, but it is staying within this wide channel. So I see Netflix remaining in that wide channel. Let's take a look at some others. We have Oracle, which I like. I profiled Oracle recently. Oracle made all time new highs. Had the earnings disaster knocked it back down, knocked it back down about $10 a share. And it caught some support right on the 20 day moving average. I said, you know what? I like Oracle. I can see this thing gaining its footing here and possibly going higher. And that's what it looks like it's doing. It's going back up. Wants to close the gap here almost whenever you have a stock going from closing one day into a big move the next day. It creates this gap, this wide open space. It's called a gap. And typically stocks like to close the gap sometime in the future meeting. Once Oracle hits the lower end of this bar here that will completely close the gap. And it looks like it wants to try to do that. So Oracle looking good. Cisco is another stock that has done very well. It had been kind of hovering around the 20 day and 50 day moving average in the sort of little uptrend. And then it just started to explode higher. So like Cisco there, that one's looking good. What are the stocks we have? Look at Microsoft as well. Microsoft kind of hovering right around this upper resistance area. It wants to figure out where it wants to go. And it's hovering right around the 20 day and 50 day moving averages wants to figure out what's the next move. It is above this top resistance line. So the path of least resistance at this point with the 50 day moving higher, 50 day moving average sloping upwards could be a good thing. So Microsoft could see itself starting to move up a little bit in the near future. Let's take a look. What else we got? What other stocks do we like? What else do we look at? Costco is another stock that I had profiled recently. We had the massive move down, got well oversold on the RSI, had a huge volume spike on that down move. And I said, it's probably going to bounce there. Everyone got washed out. That's typically when the bounce occurs. And that's exactly what Costco has done, has completely bounced on the bottom. Now has moved back above the 200 day moving average right here. So that's a good sign. Costco, great company. Let's look at Walmart real quick, because that's another same industry. Walmart, I'm a fan of Walmart. Been waiting for the stock to possibly gain its footing. Walmart's come off a long way, but it's still kind of meandering. I like the little move here. We can draw a trend line. We can draw line off the bottom support. And then we can draw a little top here. That is called the ascending triangle. It's moving up, got a flat top here. If Walmart can blast above the resistance here, get above the moving averages here, Walmart should see its way back to 150, 155. But it's got to do some work right here. What other stocks am I liking? GameStop, we like to look at as well. GameStop still sticking around, still sticking around, bounced off the 50 day moving average this week, right at around, oh, what was that, $126, $27 a share, and moved back up above 200. GameStop still kicking around. I'm not trading it, but I like to watch it see what's happening. Lastly, we look at Riot. Riot is based off of Bitcoin for the most part. It's a blockchain company, a company that mines for digital Bitcoins. Riot, Bitcoin goes up. If the price of Bitcoin goes up, Riot goes up as well. We can draw some trend lines here, maybe a little bit of a triangle here. Do the tops, do the bottoms. So Riot's sort of in this wide range here, has bounced off the 50 day moving average, so that's good. So Riot could keep going up, but it's gonna probably meander here in this range for a little while and see what happens once it gets to the Apex. Probably move higher, Bitcoin goes up, if Bitcoin goes down, it'll probably come off. But I think Bitcoin is going up for the foreseeable future. All right, so I think that's it, everybody. That's our lesson for the day. That's our Saturday synopsis. Moving on to our 45 minutes here, getting long in the tooth. Let's quickly go to our website. Always wanna show you what you can do at our website. Click on the Put Selling Basics Guide. If you wanna learn about selling put options, free guide, put your name and email address here. Go to Put Selling Basics. Also on our website, services tab. Talks about our newsletters, smart options seller newsletter, vertical spread trader newsletter, and our one-on-one coaching, which people are getting great results from. So we'd like to do that as well. All right, if you found this video helpful, give me a thumbs up in the YouTube channel. I will post a video you can watch, buying deep in the money call options. The only option buying strategy that I recommend, call option buying strategy. And of course, I'll put up another Put Selling video that I've done in the past as well. All right, so that's it for me today, everybody. Give me a thumbs up, give me a comment, send me an email. Love hearing from you. All right, that's all from me today. Hope everyone has a great weekend and I'll see you next week. This is Lee Lowell, signing off.