 everyone and welcome. This is Melissa Armo with the stocks. What should I thought I would do a review of BABA tonight and a little mini lesson on options. So welcome. So here we are. I'm in the BABA. I did it this day here. Now first of all, why did I do the trade? I did the trade because it was a golden gap. It was a bullish gap. That's why. And I also did the trade because it was a corrective gap. One of the reasons was amazing trade and one of the reasons I went to the dream target the next day and you could have gotten out of the option that day. I did not because I have it out for five weeks till September 9th. But this actually is a corrective gap. That means prior to this day the stock was in a downtrend and immediately when the stay happened it was in an uptrend. And so this is a very nice position and the stock is higher. And I'm waiting to get it up through and over 100 which is another buy point in this stock that should lift itself up into 102, 103 and then 105 or 106 are the next numbers. So I want to wait to get it over 100. When I took the trade I decided I wasn't getting out of this trade until it hit over through 100. Which on the day that that happens it should have a big green bar like it did on Friday. So if you wanted the quick trade or didn't do it out as long as I did the exit was here. If you can't stand watching a pullback in something you do then you must get out of it on this day. Sometimes these options will be up a lot and if you have them out for weeks they wiggle and jiggle. Nothing goes in a straight line but this did go in a straight line and just went in a straight line in one day. And then it actually gapped up Monday. But then it gapped down on yesterday and the Tuesday had a perfect flip. Okay. All I wanted it to do was close above 95, low of the day it was 9505. What a spectacular, spectacular trade this is going to be and it is and I really a great call for me here and even to see 95 but it actually actually not only did it close above 95 it didn't even break it in the low and the bounce here. This is really strong people. Today the market fell in the morning but rallied into the minutes which I also predicted and how today I never went red. Another beautiful, beautiful move. Now someone, one of the people that did the trade and I believe he took it out this day said why did it move so quickly, so quickly so fast and it wasn't even at the target because I had made two options calls. You could have bought the 95s or the 100s and this is the lesson we're going to go over right now. So let's go over the lesson this right now I'm just going to pull up the option chain even though it's after hours just hold on. Okay so the call that I made for the people on the gap options letter and actually made this call in the trading room because I'm like I'm like take it everyone's in a blue moon I say something I say absolutely everyone here must take this trade I don't care take this trade right now. I say that every once in a while when there's 100% eviction and no chance of failure I say take it. Anyways these are the ones I'm in and here you have it I have 25 of the 369 open interest and I have a nice price in here because I took it on the day here all right but on the previous day up here this was worth 4.7 at the high so it's pulled back a little bit but it's holding extremely well because I'm through the strike so the closer you are to the number that you take the the position of the strike price whether you do a call or put these are the calls these are the puts we're betting long so you're on this side. Anyways the closer you are the stronger it holds to get through the number which this is and it did and even in the down day in here it held the strike and I just needed it to close above that but it held it in the low which is amazing so this will never break that this was a just this is just such a nice trade people anyways I also called the 100s I didn't end up doing these but on the day of the actual day that I made the call they were 30 cents today the high they were 150 so you could have made five times this even in this this morning but actually was worth way more than this on this day over here on Friday and I didn't look what the high wasn't this but Eric emailed me he got out and he and he said this just made my whole year and I actually didn't see what the high was on this day but this is the whole thing about this and I'm going to show you right now. If you're looking for a trade to have more solidarity in these options you want to get it closer to the strike or at the strike when you buy it or short it okay but we're talking about long so when you do a call it's along here in an option you want to get it closer to the number at the number you're going to pay up for that but it's more solid it's a confirmation because you're getting it into the momentum in the right direction right up into the number it's going to go through the number as soon as almost after you take it right the day you take it or right the next day you take it so that you're going to pay up for that though and of course and if you have more time in it it's even better because you have time for it to really run through the strike in other words then you don't have to worry about the expiration date because if the expiration date was in this today which is not there's nothing that I could have done to lose in this today because if I was in it all day would have made money even the last day of expiration one of the things that people do incorrectly about options is they get the direction wrong or they screw up on the timing but if you get it in a gap in a golden gap which is how I made the call here which is why I took the train and it was good that it was read the day I took it because I got it cheaper to buy it because some people went short this there was one person in the room that said oh my gosh thank God I didn't do a put in this Melissa I'm like why would you do a put in this but a lot of traders did puts into this thinking it would fill the gap and fall four or five dollars the day after the gap because it actually closed red in the day but see this is the one thing that I do so extremely well is number one reading directional bias in a chart overall number one reading the change in trend what it happens or current trend which is in play which a lot of people can't even do right and also I'm able to read gaps and they're very powerful so if you read this gap and thought this is gonna fall and fill the gap you lost that's not the reason this had this massive day but I will tell you it helped for this go to the dream target because your people covering and scrambling and covering their shorts on the day here because people shorted it and it was not a short it will never break the low of this bar here at 91 26 for the entire rest of the calendar year 2016 and I don't know if it breaks it again anytime soon and it will hit over the high before it even breaks that bar this is this is a serious serious trade in here people but I'm just doing an option here out to September 9th but I mean you could have be long this thought now as a swing trade for you know huge numbers which I'm not even gonna go over right now but anyways getting back to what I was saying Eric was saying about why did it move up and it didn't hit over 100 because you're getting because you had five weeks left you got very close to the number it got within a dollar 65 of 100 the 95s were up a lot on the day here to holding very firmly and holding more firmly in value okay so the 100s have pulled in a lot more but the 95s were holding better value even today in the run yesterday in the red date held the value so you pay up to get closer to the strike or right at the strike it runs into it even if you're not at the number though it doesn't matter you can still make money if you're getting in the right direction if you get in the right direction you can still make money on it and so that's what happened here and it was running running running running and actually this could have actually ran up to 100 if we had not closed at four o'clock Eastern time of the day that this actually happened and transpired we were only a dollar something away a dollar fifty five away so we could have actually done our 65 away we could have done it this day if we hadn't closed it for so that's why no matter whether you did the 95s or the 100s you had huge profit on Friday in that and if you can't hold through a pullback to wait to get to a bigger number which I am doing because this is such a good trade and I have so much time and the buy will come in over a hundred it's another buy point that you got to get out that day but you take it you get out of these trades and exit into the momentum people are emailing me what do I do what I do people are in it they want to get out here you want to get here you don't get out when the day is red if you're in it long get out the day it's green okay when you got the momentum and more time value but either way I'm playing this through with some time value but I am playing this through for the solid area of the train the confirmation of the number it is never going to go anywhere near 95 now not after yesterday and the other thing is to that I've got so much time left okay four and a half weeks now after today and also a buy point is 100 that's three points away three points away and I don't know if we hit through that this week but we will next week so this is a good solid train for those of you that are looking to do my system and cannot actively day trade money who's the ones that there's a Friday you can do options with the golden gap system so you learn the points you rate the gap you rate the gap with the points and if it raises golden gap like this did to the upside you would buy this as an option that day and actually you could have day trade this for money but it was like a scalp on that day expensive stock to day trade them but a beautiful beautiful move in here so the update on this is everything looks great there's absolutely nothing wrong with this nothing wrong with this at all it's a beautiful fabulous and not all gaps are created equal and that's why I have the rating system the rating system is 20 points or more you do it in the direction of the gap the higher the rating the better the gap corrective gaps are the most powerful gaps that happen in the market you do not see them every week or every month but when you see them you just do it you do it you don't even think you don't even question you just do it you just take the trade okay where you get out is up to you the money manager is up to you it didn't matter what anybody did with this every single solitary person in the room made money in this it didn't matter if you get out Friday to get out today didn't matter for pull back you still were up it was an amazing call that I made and one in many that I will continue to make but I will tell you if you're still in this you're waiting to get this up through 100 it is a buy point and you will get you must exit the train through a run-up into momentum dream target on this with four and a half weeks left I mean I'm just gonna give some silly numbers here is 110 excuse me 110 would be a silly dream target number on this for a September 9th expiration okay and the biggest I'll show you one more thing everybody go excuse me I'm sorry the biggest positions in this of the open interest I noticed was the 16th mid month for September but they're just too expensive now but this is not even too late to buy it I know that sounds crazy but it's not even too late to buy this now if you bought the same position I'm in right now or the hundreds you pay a dollar something for the 100s it's still not too late so the biggest positions in this are here do you see this this is September 16th expiration date expensive 95s why you're $2 through the number okay you pay this year and then the 100s this is actually it's only one more week after mine but look at the look at the open interest in this for this is 4.3 million shares and look what trades went off today you wowie I'm just seeing that now whoo actually there's a lot of action in that today but I will tell you the one the later out the ones okay these are these don't move as fast so mine will start moving faster and faster and faster over the hundred point so there's you're looking at all of these things but everything that I'm doing is based on the gap so if you're interested in more information and you'd like to learn my golden gap system you can email me at Melissa the stock switch calm the next class is August 27th and 28th this is this is so much fun it's so much fun doing it and I'm still in it we'll see where end of getting out of it I absolutely know that shout of it down at 100% conviction no chance of failure this goes through 100 and rallies and has another big huge massive green day after that buy point and that that day could be $10 I mean this is I know this sounds crazy but the day that that actually does it it can run up to 105 or 106 so that'd be great for me that would be 10 11 points through my strike price and I've 2500 shares so I would just be ecstatic this is this is gonna probably be the biggest options trade that I've ever done and maybe the biggest trade I've ever done so well we'll have to see I'm still in it I'm playing it out I mean I just so whole hardly believe in it and and not all trades are created equal not our gaps will create it equal you really got to know what you're doing with things and because it was a corrective gap I just I just knew that it was good people so we all did it congratulations everyone whether you get out Friday or not to be honest with you if you get out Friday you can still take it you can still take it it's not too late it's not too late so have a great day everyone email me and Melissa the stocks which calm if you like more information and if you want to sign up for the Golden Gap class I've an early bird special running through this Friday August 19th have a great day everyone