 Hey everyone. Hope your trading is going awesome. At the time of this recording, implied volatility has been on an uptick and that always means excellent trading opportunities for navigation traders. So hopefully this keeps up and we continue to get some amazing opportunities in the market. In this video I want to talk about why your opinion does not matter as it relates to trading options. And not only does your opinion not matter, but nobody's opinion matters. Okay and what I mean by that is there's so much garbage out there in the financial media that continues to spew this just these opinions and recommendations and you know analyst upgrades and price projections and it's all just garbage. It really is. And so when I say your opinion doesn't matter I'm saying you need to figure out your trading strategy and and and for those of you who follow navigation trading you know by now the philosophy that we follow. It's all about strategic positions utilizing implied volatility as an indicator to enter and exit positions along with all the other stuff that we teach in our courses. But what I want to really drive home today is the point that you shouldn't listen to other people's opinion. Okay that goes for me, that goes for economists, that goes for the talking heads on CNBC, that goes for the articles that you read in Money Magazine. Their opinions do not matter as it relates to your trading. Okay and I want to point this out with an example and I want to make sure that that you understand the point that I'm trying to get across and it's not that hey look I was right they were wrong that's that's not the point I'm trying to convey in this example. The point I'm trying to convey is that you need to choose your strategy, be strategic around that, use high probability trades, understand implied volatility and how that affects your position and don't worry about what anybody else says. Okay so here's the example I'm going to look at. This is Amazon.com ticker symbol AMZN and the date was that I put this trade on was 4-3 so April 3rd 2017. Okay so what I did is I bought a put spread. I bought a long put vertical and the reason I did that is because a couple reasons one I said okay if Amazon turns around starts going down implied volatility is going to continue to rise. Okay plus it was under 50 and if you follow navigation trading you know that we sell premium or net sellers of premium when implied volatility is over 50 and we can we want to buy verticals or potentially buy premium when it's when it's under 50. Okay so it's barely under 50 however we know that typically when stocks go down implied volatility goes up. Okay so I was taking a bearish position on this so which would mean that if my opinion was correct which again don't follow my opinion you can follow strategies you can follow my strategies but don't follow opinion my my opinion was that that that Amazon had been on a big run massive run up the last few days and at some point over the next you know 30 to 45 days we would see a reversal or a little bit of a pullback. Okay so that that was my strategy and so I put on a long put vertical here on 4-3 and and then what happened the next day is Amazon shot up again okay and and it had a pretty massive move and I thought huh that's interesting you know this this thing's on it on a nice tear to the upside okay I was I was taking a little heat in my position at that point and I thought you know what I'm just gonna check out Google Amazon stock and and just kind of read up on it see what see what people are saying so that's a point I want to make as well it's okay to read articles on on positions on stocks on the financial markets and it'll help it'll help you just kind of understand what's going on but what up what I would tell you definitely do not do is don't read articles for opinions don't read articles for trade suggestions okay and this is the example that I'm showing so so it shot up the next day so I thought huh I'm gonna I'm gonna check out you know what people are saying or what's potentially driving this stock up and so I read an article in on CNBC online the title of the article and this was on this day on the title of the article was the best could still be ahead for surging Amazon and here's how to play it I thought okay this is interesting I can't wait to hear what they have to say and so couple of the couple of the lines couple of the quotes out of the article Amazon could see more upside ahead some strategists say following a first quarter in which Amazon shares gained 18% and logged eight all-time highs okay keep in mind this date Amazon hit a new all-time high at the time of this recording was $923.72 another quote out of the article was Susca Hanna which is a big investment manager one of the analysts said the price said there's a price target now of $1,250 okay now keep in mind if you've ever read articles and and and tracked analysts projections they they try to just jump on where it's going so if if it's skyrocketing upwards they're always going to be putting price targets ahead okay if it starts to if it starts to reverse and fall they're gonna start putting price targets below okay it's just it's just a follow the leader it's just a copycat type of system and there's absolutely no merit to it okay if you can internalize that and understand that and not follow that stuff it'll it'll serve you very well in your trading okay so so this guy says 1250s an upside target according to Stacy Gilbert head of derivative strategy okay so this is the head of derivative strategies for this big investment firm using options would be the best way to play Amazon now okay so now I'm intrigued right I'm an options trader I can't okay let's see what let's see what this this analyst has to say options in Amazon are about as cheap as we have seen them really because if you look at the chart I mean implied volatility is up here I mean you know had this been down here where implied volatility low that's when the options are cheaper or over here is where they're cheaper but right now really they're the cheapest you've seen okay interesting so so if you're uncomfortable that our 1250 price target is too bullish or you're just concerned that the downside could be higher then we're pricing the options are certainly attractive way to play it and what is that option strategy you're going to tell us for example investors may want to go out three months and buy an at-the-money call option hmm okay so you're telling me that you want me to buy calls so we've got we've got first of all we've got earnings coming up in a couple weeks and if you understand what happens to the options after the in earning earnings announcements volatility gets crushed which kills the value of a call okay you can see it here got crushed got crushed here that happens after every earnings announcement so they're telling us we need to buy an at-the-money call and and prior to earnings announcements okay interesting so so I read all this and I thought okay that's that's interesting this person obviously has no idea how implied volatility affects options but yet they're the head of derivative strategies for for a huge in investment firm okay and I say right here so you want me to buy into all-time highs you want me to buy a call into all-time highs and if the price of Amazon goes up volatility will contract so that'll hurt your position you want us to do it ahead of earnings where volatility will contract that'll hurt our position so in other words unless Amazon has just has a you know a two standard deviation move to the upside on top of trading at all-time highs you know that that's really the only way you're gonna profit from this at-the-money call that they're recommending okay so so here I am I'm short Amazon I've got a long put vertical spread on and that I did on 331 and so let's let's see what happened to Amazon and in the next few days okay went up again kind of like started topping out and then it started to go down didn't go down much but then here so here we are today and today is April 13th okay so I I got in right here on 4 3 on this day here on this little little green bar right here went up against us took some heat came back down it's basically trading at the very same area that I entered okay so I was bearish and it didn't even go base it basically didn't even go below where I put the trade on but I took the trade off today I I sold my vertical so I bought it for 20 21 58 sold it for 2377 13 days later for a profit of $219 on per contract traded okay so if you traded 10 contracts that's over almost $2,200 and that's over a 10% return on capital in 13 days okay so again the point of this lesson is not to say look at me I'm right there wrong because guess what this price target of 1250 that could still happen okay and that at the money call that they're that they're recommending that could still be profitable okay definitely not the strategy I would take even if I thought the stock was going up however you know who knows this this analyst could be right over the next few months and I'll actually kind of check it out to see what it ends up happening just just out of curiosity but the point of this lesson is their opinion doesn't matter okay had I had this position on I read this article two days later and thought oh my gosh this expert says that Amazon's going to 1250 I must have made a mistake I'm gonna get get out of this trade and take a loss well I didn't do that right I their opinion doesn't matter so I did not take their advice I stuck with my position I stuck with being strategic and putting on a position that benefited from implied volatility and like I said the price of Amazon didn't even go down and I put on a bearish position yet I made over 10% return on capital in in less than two weeks okay so I hope that's helpful I just I want you guys to get in the mindset of really taking to heart that saying that your opinion doesn't matter economists opinion does not matter analyst opinion does not matter other you know trading gurus who make these price projections and market predictions their opinion does not matter so I hope so I know I've kind of beat a dead horse with that saying but but if you can internalize that and really get strategic around your positions like we teach it navigation trading it's really going to benefit you in the long run so I hope that was helpful if you'd like to learn more about the different strategies that we use to make consistent returns come see us at navigation trading calm we've got a ton of free resources including the navigation watch list which is a list of the most profitable symbols to trade for each type of strategy we've got the volatility indicator which you've seen on my charts you can download this directly to your thinkorswim trading platform and we've got a free options course called trading options for income which is a step-by-step guide to get you making consistent trades right away we look forward to seeing you there