 What's up everybody hope everybody had a great weekend today is Monday November 20th, and I am back with our contest winner Matt King Matt. What's going on buddy? Hey, man. What's going on glad to be back? So we are we're looking at your monitor tab here And we've got some good things going on if you look in the very upper left hand corner You can kind of see our total account value Hovering up over that fifty two hundred dollar fifty two thousand dollar mark So we're up up a couple thousand bucks in your account. So that's always a good thing, right? That's super awesome. I'm excited to do I was excited to get into thinkorswim and Look at the numbers today. It was over the weekend there Yeah, so we had so we've had a we've had a few things go in our favor And we can kind of go down the line here on your on your monitor tab You've got oil which and actually what we'll go over that one kind of piece by piece, but Yeah, let's just do that Let's just go over each of the symbols on the analyze tab to give give everybody kind of a visual of where we're at So yeah, go ahead and click on cl See what's going on here? So you can see we've we've had a decent contraction in implied volatility and oil We just actually put this one on last week and we're already up a couple hundred bucks Not enough to take off yet, but we'll just continue to to watch oil. Yeah, that one's looking good We'll keep an eye on it so far so good Then we've got our friend natural gas Kind of the same story up a couple hundred bucks, but we just we need a little bit more Move up in both oil and that gas. They're down today But implied volatility is contracting nicely now We just need price to move up a little bit more a little bit more into center and To give us a chance to book book profits in both of those Yep, and then NQ which is our friend the Nasdaq who has been kind of our Problem child to this point Is is doing okay? I mean we've got a little bit of a contraction in implied volatility We could use a little bit of a move in price down To to benefit that to get into a little bit more profit But we're almost back to break even in NQ So we've you know, we originally put on a position Put on a strangle then we added another strangle that we had to adjust both of those But now now it's starting to starting to cooperate apparently that that whooping we put on it a couple weeks ago You know sent it back to where you're supposed to be I Got for the market going down. All right. Yeah. Yeah, so So that's looking good Not enough to take off yet. You know, I mean think about this when when you start to make adjustments Really what your mindset should be is yeah, we'd like to get to profit for sure But really after you had to make a couple adjustments really your goal should be to get back to break even and So if we can because if we can just if we can put on trade And book winners, you know, so a lot of them will put on and just take off like we have But but then you're going to have the ones that that go out of your range You're going to have to make adjustments And so if we can if we can book our winners for 30 40 50 percent of max profit and then our losers We're able to manage and adjust through and get back to break even That's the ultimate goal, you know So we break even on our losers and we make money on our winners and over time That's that's going to be a very profitable way to do it Good rule of thumb. I like that now. That's not always going to be the case. We will take losers unfortunately from time to time But but that's kind of the goal Say if you have to if you don't have a choice, but Yeah, I hear you Then we've got bonds. So bonds is it's very centered. So The one thing to consider here is okay. We're very centered if if price makes a decent move either up or down Our profit is basically gonna Going to go down because we're we're so centered. We're right there dead center in the middle of our of our graph So a couple of things to consider with this a we're up money and bonds If you go back to the monitor tab overall Let's see where we are to date in our account in in zb So we've made In the in the mars contract. We're up 453 and in the december contract right below that We made 140 so we're up. We're up. Let's say 600 bucks total in bonds So it wouldn't be out of the question of taking this off Just as from a profitability standpoint Even though we're not our quite at our target of of max profit of where we want to take it off What i'm thinking is because it's so centered we book that profit And the other the other component to this of of that kind of bodes in our favor of of wanting to take this off Is if you go to the chart tab I'm getting there There it is. Yeah, go to the chart tab. So and to look at the implied volatility We have to go to tlt so you can either scroll up and click on it or you can or you can just type it in there Up in the there you go So you can see implied volatility is it the ivy ranks at 13 ivy percentiles at 26 so You know, we're at a point here where implied volatility is fairly low in there and with implied volatility Fairly high in several other symbols. It's kind of one of those questions. You want to think to yourself Would I rather put on a new position use that capital put on a new position in something with high implied volatility Or would I rather just stay in this one and you know, you know, if it's spikes higher that could hurt me Uh, if it does go lower, obviously that would help but we're in a we're in a range now where it's You know, it's not above that 50 level where we like to enter new trades Mm-hmm So in this case, you know, my my suggestions say I'm going to say let's go ahead and book that profit and reallocate those dollars Into into another symbol with higher implied volatility I like it. That's a good idea And so before we do that, let's just check out xrt as well mm-hmm Let me go back to analyze tab So xrt is is acted nicely. Remember we booked half these profits Before we reached kind of our target max profit because we wanted to use that capital to reallocate into something else Um, and now we've got the the remaining five contracts on here and we're to a point where we're kind of at that 40 to 40 plus percent of max profit. So we can go ahead and book profits here as well Sounds good to me Taking profits is always always a good thing, right? Yep. This this one's looking pretty good. So I'm happy with that. Uh, that choice Yeah, okay. Well sounds good. Well, so let's go ahead and do that. Let's uh, let's just start with xrt since we're here go ahead and highlight the positions down below the graph and Let's close this out Yep, we're looking at these ones right here xrt's and You can see everything fine this far down, right? I can. Yep. Okay. So we want to go Create closing order by yep and shoot for Yeah, probably get 47 see if we can get filled at 47 okay confirm it and and See if it happens fast Yeah, that's a few cents a few cents wide on the on the theoretical mid-price. So let's go ahead and and Actually, let's just let's just let that set And why we are waiting because we have other stuff to do Uh, this is what I would this is what I would really do I would I would put in the order I want to get filled at and I would go do other things for a while to see if I can get filled before I adjust You know sometimes for the video purposes We just go ahead and get filled right away But we've got some other things to do so let's let that set and uh and go to our next victim, which is the bonds Okay bonds And Same deal here. We're just gonna Buy back closing order Close that out for about a dollar 27 and we should get filled right away at a dollar 27 on this one Okay See if my instincts are correct I'd say they were all right. So we're out of bonds less. I was Well, so was the other one, but it looks like that was the bonds. Yeah, no, that was that was bonds Yep, so we're good to go. So um, so now what I'd like to do is so now we've got We've got on a position in oil We've got on a position in that gas. So we've got two energy Uh futures we've got nasdaq, which is stocks and we've got xrt, which is stock which we're getting ready to get out of So we've we've significantly lightened our load from stocks You know, there's there's implied volatility in a lot of stocks But we had kind of held off on putting any new positions because I didn't want to get too overweighted in any one category But but now since we've lightened our load in in stocks I want to look at another stock stock related either etf or individual stock to put one on And and one that we've kind of kind of discussed and looked at is cosco So go ahead and click on cosco and go to the chart tab So what you'll see here is, you know, they've they've just announced earnings back in early october So we don't have to worry about earnings in this next cycle and we've got implied volatility has You know came all the way back up near 100. It's it's still very high, but it's come off its highs It's about 88 on the percentile And it's got an iv rank of 79 So a great candidate to be selling premium in so I'd like to put on a trade in cosco It's good to me so one thing um one thing to consider is we're we're looking at january now because uh the Days left to expiration in december is 25, which is a little bit less than we Then we like to deal with So we're we'll look at january which has 60 days to expiration And we're going to do something a little bit different You know in this to this point for this last month and a half that we've been trading in this account We've done all strangles We've we've done some etfs mostly futures in this case. We're doing an individual stock And because of the the buying power requirement that it would take to put on a strangle in cosco I want to I want to have Use a little bit better use of capital and and let's go ahead and put on an iron condor in cosco Yeah, definitely. I'm excited to have to do do something a little bit out of the norm and try that out So yeah, and we do you know with alert subscribers, for example, we do a lot of iron condors just because You know, you are defining your risk. It's a lower buying power requirement versus a strangle in a lot of cases So so this is a very Very common trade that we we do a lot, but first time with you on this coaching session. So Go ahead and go ahead and walk us through an iron condor and let me know when you need If you stumble and you need any any help If I need any assistance, yeah So we're we're looking at something around that 20 20 delta mark. We have one here at 18 So we're just going to come down here and we're at the The january of 60 days to expiration I know that was already we had already kind of jumped in there, but Jump in here and Keep me from doing anything dumb sell or selling not buying and Instead of doing the strangles. We are doing the iron condor. So we're just going to take a look at this and 183 at all or it's got a we're looking at five points spread with that and So it automatically put that in for the The call side. So we're going to look manually look over here around 20 And it starts at 160. So we're just going to put that in over here on the put side And then the five points we bring it down to 155 For the defined risk portion of this correct and From there, we would just analyze I believe analyze the trade Perfect, then we can set our Set our slices break even. Yeah, they actually happened to already be there, but yeah, just that's perfect. Oh, is it cool? That's okay So there's one other thing that we're missing here to get our probabilities, correct Oh, let's see. Is it the contracts? It's not the contracts. We'll build that here in a second. Let's just say I did It's like I messed something up because it's uh, you didn't you know 99 percent Yeah, you didn't mess anything up. It's simply just has to do with with where the calendar was set with In toss at this point. So So Yeah, you just need to make sure that that matches up with your expiration date Uh, what was the expiration? So it's the dates in that bottom left corner of your graph. It's january 20th January 20th bottom left. I just want to make sure that I'm seeing it The one up on your graph the expiration date. It's not this one Oh Okay, there it is. That's what you're talking about. Yep. Okay, so You can do it day by day or you can just open up the little calendar if you want Obviously, I don't do that very much Well, and a lot of times nobody got time for that. Yeah to be fair bat to be fair Uh, most of the time it is it is it automatically kind of Goes to your expiration date for whatever reason when we were messing around with it before it was on a different date So no big deal. Cool Anyway, um that brought it down to 60 percent which is a little less than what we're used to with the strangles, but uh But uh, like you had mentioned, you know, that's what's going to happen with the uh The the iron condors. Yeah, if we're choosing around if we're selling around the 20 delta Options the ones that the the strikes that we sell that that's going to give us, you know 20 percent on one side 20 percent on the other side add those together. That's 40 percent If you take the inverse of that and that gives us the 60 probability of success And and you know, obviously the difference between this and a strangle is we're defining our risk uh, we're having we're We're using a lower amount of buying power to put the trade on because it is defined risk Uh, what we're giving up is we're giving up a little bit of profit potential And we're giving up a little bit of probabilities. So with a strangle, you're going to have a higher probability of success You're going to have a higher profit amount or you're going to collect a higher credit Uh, and so what you're giving up for this is you get to find risk and you get a little bit lower probability of success but both are great trading vehicles both are, uh, you know Vehicles you want to use when you're trying to sell premium when implied volatility is high Uh, it really just comes down to a determination of What the efficiency of buying power is for your specific account and then do you want? Defined risk or undefined risk and so there's no right or wrong answer It's just kind of a preference and how it fits into your overall portfolio In this case because we want to We want to reserve some buying power for other potential opportunities Uh, we're going to define our risk and on a stock that trades at, you know, 170 bucks Doing a strangle, uh, can use a decent amount of buying power And in fact, let's let's go ahead and set that set up a strangle real quick and I'll show you what I mean by that Uh What do you want me to set up a strangle and just uh, yeah in costco Yeah, so so go ahead and go to the trade tab back to the trade tab Back to the trade tab Set it with the same thing here So so so Strangle So when it comes time to put this on make sure I hit the right button. Yeah, no problem A lot. Whoops my bad. So we've got the 183 call so the put 2019 so 160 on the put side And you're becoming a pro at this I know tell you what to do So so if you can just go ahead and hit confirm and send you don't even have to analyze it Okay See that's gonna for one contract. It's going to take over $2,300 Okay, and we've got a max profit of 269 So we and we would be managing that at 30 40 50 percent of max profit So let's say we'd be taking out, you know, let's say a hundred bucks of profit Well, we're using $2,300 of capital To to make a hundred bucks Yeah, I just I look at that as not a very efficient use of capital Especially for the account size that we're trading and all the other trades that we have on and and want to potentially put on Okay, so that's why I just wanted to show that Real quick just just to give you an idea of why we're doing an iron condor over a strangle in this case Okay, so you can go back to the analyze tab All right And still got my iron condor up here got it got it all set so you can see we've got 10 contracts, which I said bump up Yep, I did put that up to 10 So So what that's going to what that's going to give us is a max profit if you hover over the Middle part of the graph there. We've got a max profit of one thousand two twenty And if you go over to one of the the flat flat sides there, you've got a max risk And that's the buying power that we would use is a little over 37 hundred dollars So the one kind of rule of thumb with iron counters is we usually want to collect about a third The credit that we collect or the max profit that we have we want that to be Around a third at least of of our max risk now. We're we're right there You know, it doesn't have to be exact But this is uh, that's just kind of a rule of thumb to kind of make sure that you got the The trade and the strikes in the right place along with the probabilities. So This looks good. Let's go ahead and Try to ship this out and and we're not going to get filled at 122. Why don't you kick that down to 1 a dollar 20? Kick it down two cents There we go, and then it's right click and confirm and send Okay And just hit the send button That was fast. There we go sold sold sold sold and Believer still waiting on the XRT to Um buy back as well. Correct. Good. So I almost forgot about XRT. So yeah, go ahead and Actually, what you can do is you can go to your trade tab trade tab And you can Go down to the your orders there on the left and you you can change that drop down from orders all Oh here. Yeah change that to working only And that'll show us our working order and then you can right click and uh cancel replace And wow surprise we're not getting so go ahead and kick it up to 48 Remember it's yeah, we're buying it back. So we're gonna have to pay up a penny instead of down And that one went went quickly it looks like and that's what it was trading at All right All right, so we're we're good here Uh, we do have we do have some capital that to put to use but um, I'd like to I'd like to wait You know if if we get some more downside in the stock market, you know here over the next day or two That's really gonna pump up IV So I'd like to uh stick with what we've got now. We've got Costco, we've got the nasdaq. We've got Nat gas and we've got oil so Good little diversified portfolio going on Yep, I like that. I like getting in here and taking a look at it even uh Oh wait, that was the wrong one. I was looking even as nasdaq's up We're in the whole at 35 when we started this call. We were in the whole at uh around 150 200 bucks It's coming up going down whatever whichever way you want to look at it I told you nasdaq odis money. They're they're just paying us back with the os. Yep. That's right. That's right Break even and take a little bit to boot All right, sounds good matt. Well, we'll sign off here Uh, have a great week and we'll talk to you soon talk to you soon everybody All right. Take care. Thanks