 Hello everybody, Lilo here from SmartOptionSeller.com. Today is Saturday, March 13, 2021. Welcome to another edition of our options training information and our Saturday synopsis. We'd like to take a look at charts, see what's happened over the last week and see what become forward. But today, we're going to be talking all about the options basics. We're going right back to the beginning. Still get lots of questions to get new students that want to learn about options trading or just starting out, they just need to know more information. So we're going to talk about just the basics. What options are, why they use, how do we figure out how they're priced and just all the general information that you need to know to understand to get your feet with starting options. So let's jump right in. Let's go right now. As you can see on my Word document here, which is where I usually write down some information to help you all understand options trading, going back to the basics, there's only two types of options contracts and those are either call options or put options. Today in this part one session for options trading basics, we're going to just talk about call options because most people are concerned with being bullish in the market or they like to buy things. So call options are more of a bullish type of trade, especially if you're an option buyer. So we're going to talk about call options and we're going to talk about the basics. So let's just understand there's only two types, calls and puts. And all options can be seen as instruments for speculating on a directional play in the market. They can be used as a hedging purpose, meaning you want to protect a position that you may already have in place. And it could also be used as a substitute for the stock. One of the strategies that I highly recommend as an option buyer is buying deep in the money call options. That's something that I've made other videos about. But today let's just talk about what options are and how their price, where their prices come from and what you need to know specifically some of the important factors. So all options contracts represent 100 shares of stock. So if you want to buy an option contract you have to know that you're going to be controlling 100 shares of stock. If you buy five or if you trade five contracts that represents 500 shares of stock. So you always have to know how many shares that you're willing to play with. And that would mean how many option contracts you would want to buy or sell. So option contracts allow you to take a position in the stock market without having to actually buy the stock itself. And options trade just like stocks. They have bid and ask prices. They fluctuate higher and lower. And let's look at some of the information here. All option values are tied to other inputs. That's why options are called derivative contracts because their value is derived from other sources. And the three biggest things that help give an option its price is the stock price of the stock that you're looking at. How many days are left until expiration and the volatility of that stock. Volatility is a measure of how erratic that stock is has been fluctuating over some period in the past and how erratic it's expected to fluctuate sometime in the future. So those three things, the stock price, the days expiration and volatility will have the biggest effect on an options price. Okay, so if you're gonna buy or sell an option, those option prices just don't come out of thin air. They're created through option pricing models and formulas that take all the current information about what's going on for that stock and it pumps out an options price. So options will have a bid and ask price just like a stock does and options can be bought and sold at will at all times. A lot of things that people misunderstand is that they think options have to be held until the expiration date and that is not true. You can get in and out of option positions one minute later, an hour later, a week later, months later, it's entirely how and what you feel the option prices moving. So you can get in and out of option trades all day long. So as long as you understand that options, their values are tied to other things, meaning the stock price, the days expiration and volatility and all options have an expiration date. So that's one of the biggest things that you have to understand. And options have weekly expirations, most options that have a weekly expiration, a monthly expiration, and they can go out very far in time. A lot of options have their contracts listed for two or three years into the future. So you can choose what expiration date you're looking at here. So options values fluctuate just like stocks and their option prices will fluctuate based on where the stock is moving during the day and all that. And there are two players in the market. Obviously there's option buyers and their option sellers and each one of those participants has a different view of the market and they have a different view of where they think the option might be going. And so you also have to understand that buying options, we're only gonna talk about buying options today, we're talking about buying call options because most people like to be bullish. One of the things that most new option buyers or option buyers, option players mistake is that they just wanna buy a very cheap option contract. They just wanna take a speculation, they think a stock might be going up. So they're just gonna buy any random call option without thinking about how much time is left to expiration, how that time affects the price of an option. They don't consider the strike price, they don't know their break-even, they don't know their probabilities. So there's a lot of things that go into figuring out what's the best strike price to buy, what's the best expiration date to buy. And most beginning option traders just don't know this information. So they typically buy the wrong option and they end up losing money because they just don't know how the game is played. So what I really wanna do is try to explain to you how we figure out what an option's worth, what it's break-even is, and where and when to take profits. One thing that a lot of beginning option traders also don't take into consideration is taking profits along the way. A lot of players will hold on to the option until the very end, until expiration date, which I understand you wanna get as much time out of that option contract like you bought it. Let's say you bought a six-month option, why not hold it for six months? You never know where the stock's gonna go, but sometimes it's a lot smarter to take profits well before the expiration date, especially if you have a lot of profit built up. And we will talk about that as well. So lastly down here, knowing deltas and calculating break-evens are very, very important in assessing how that option will move. You know, all options have different strike prices. That's how we list options. They each have a different strike price and they will all move, those options will all move at varying rates, right? If the stock moves, you have to make sure that the option price is gonna move along with it. Otherwise, what's the point of trading options? So you have to understand the relationship between the strike price and how it will move in accordance to the stock. So let's just take a look at some information here. We're gonna pull up an option chain from interactive brokers and we're gonna look at some Apple, Apple call options, okay? So on the left-hand side here is call options on the right-hand side is put options and this is all information as if close a business yesterday, March 12th, 2021. So the first thing that you need to understand is when you look at an option chain, this is what's called an option chain. This is where you will see the option bid and ask price is the last price. Some of the Greeks, we talk about Delta today a little bit. You always wanna make sure you have the Delta column whenever you're looking at options. So here you can see this last price where my mouse is, Apple finished a day about $121 a share, okay, right here. And the options prices will be reflecting where Apple stock is trading at that moment in time and how much time is left until expiration and all that. And along here we have some of the tabs for the various expiration dates for Apple options contracts. So we're just defaulting to 69 days here, May 21st, 2021 options. And the, let's just look at, most people will say, hey, you know what, I wanna get bullish on Apple. I don't really wanna buy shares, I just wanna buy an option because I know it only costs a few dollars to get into the trade. So if Apple's at $121 a share, most people will opt to look at like very cheap options, cheap in dollar terms, okay. So let's just say someone's looking at the 160 calls. Here's the strike price column. The strikes tells you all the levels in which you can buy or sell, potentially buy or sell shares of Apple sometime in the future. And each strike price has different characteristics and the option value for each strike will move in various degrees along with the stock itself. So that's very important to understand. So here's the 160 strike. We scroll over here and we look at the bid ask, okay. Every option has a bid and ask price just like a stock. It's 62 cents bid at 60 cents offer. That's how it went out yesterday, Friday, March 12th. And we try to do, we always wanna try to transact somewhere in between the bid and ask. So let's just say 64 cents per contract. That is 64 cents per contract. And since each option contract is worth 100 shares of stock, you always have to multiply these numbers to get the actual dollar amount that you would have to pay when you buy these options. So 64 cents times 100 is $64 a share. Or $64 per contract, I should say. Now, if you were to buy 100 shares of Apple, you'd have to pay $12,100 for it, okay. Buy 100 shares, you have to pay for it upfront. So that's $12,100. In this case, you can control those same 100 shares for only $64. You think about that. That's why people love buying option contracts because it only costs so little. So now you get to control 100 shares of Apple for only $64 a share. And if Apple goes up in price, what you can do is this option price will go up in value as well. So you could turn around and sell that option at a higher price than what you purchased it at, okay. That's how you make a profit by trading options. If you buy it at one price and the option price goes up, you can sell it and lock in again. But here's the thing, you have to understand, we wanna know what the break even is. If you're going to hold the option until expiration, where is the break even? There's always a break even price on an option contract. And the way to figure that is you take the strike price and you add it, you add the premium to it. So 160 plus 64 is $160 and 64 cents. I'm sorry about that. Just getting myself all jumbled up here. Let's take a look. Let's open up this other word document here. So to find the break even, I'm gonna type this out. Equals stock price plus option price. And so that would be, sorry, strike price didn't need the stock price. Strike price plus the option price. So that's 160 is the strike price plus 0.64 equals 164, 160, 64. That's how you figure out the break even price. And then make this a little bit bigger so we can all see it. So figuring out your break even is super, super important. That means that Apple has to go from its current price of 121 all the way up to $164 and 64 cents in order for you just to break even on the trade. You paid 64 cents per contract. So Apple has to go at least to $160 and 64 cents in order to break even. So let's go back to the option chain here. So 160, so that's what people don't understand is that if you're gonna hold all the way to expiration, what are the chances of Apple going from 121 all the way up to $160 and 64 cents? That's almost another $40 move that Apple has to move in order for you just to break even. Now that's if you hold it until expiration. Here's the thing that I wanna tell you is that if the stock starts moving up quickly, if Apple starts to go up quickly, then this option price will start to go up as well. So you might wanna take profits earlier than holding all the way to expiration. I wanna show you why that is. Let's pull up an option calculator from, let me get the option calculator. That's the volatility, I'll show you that as well later. So here's an option calculator from ivolatility.com. I love this website ivolatility.com and you can use an option calculator. Option calculator will tell you, you can do what if scenarios? What if the stock moves from here to here? What's the option price going to be worth in a certain number of days? So let's take a look at Apple. Let's change this to Apple closing price 121.03 and let's go out to May. That's the contract we're looking at. And we were looking at the 160 calls. Put this in here, calculate. Okay, so in this case, ivolatility had the option price call at 55 cents. Let's bump this volatility up a little to get it at the same price and see a little bit more. Let's try 43%. Nope, 42%. Okay, so here now the Apple call option is worth about 64 cents. That's what we were going to pay for it. Now, the amount of time left until expiration is a huge deal. It'll tell you how the option price is going to move over time. Now, if Apple shoots up very quickly, let's just change the price of Apple. Let's say it moves up to $125 a share in the next 10 days. There's 69 days left until expiration. Now, let's just move that down. In 10 days, Apple's gonna go up to $125 a share. Let's see what this option price changes to. Okay, so it only moved up five cents a contract. All right, only moved up five cents a contract. And let's say that's not a lot, okay? Apple went up $5 a share, but yet your option contract only made $5. It's not a lot, right? Aren't you looking for more bang for your buck? Well, let's just say Apple managed to go all the way up to $160 in the next 10 days. A huge move, right? A huge move in 10 days, $40 per share, move for Apple. Let's see what that option value will be worth. Okay, so now it's worth over $10 per contract. That is a huge, you're gonna make over $900 in something dollars on that move. That's if Apple goes up to $160 in the next 10 days. But let's look what happens when, if it took Apple all this time to move up to 160, let's just say there's only five days left until expiration now. Okay, let's see what happens. Remember, this was worth $10 if Apple moved up very quickly. But now it's taking almost 50-something days to move up to 160 and hit calculate. Okay, so now the option is only worth $4 per contract with five days left. So it's very important to understand that if you buy a call option, the stock has to move very quickly in your favor right off the bat. Because the longer it takes for the stock to move, that option value is going to start wasting away. All options waste away as they move closer to expiration. So if there's only one day left, let's say Apple moves up to 160, the day before expiration, let's see what this thing is worth. See, now it's only worth $1.80 per contract. So you're making a little bit of money. Apple went from 120 to 160, that's $40. But now your option contracts only making you about 120-something dollars. Not a lot of movement, but if Apple makes the move very quickly from the time that you bought it, that's price, the call price goes up. So time to expiration has a huge influence on how that call value will change. So the faster the stock could move in your favor, the better the option will perform. So that's why it's also very important to take profits along the way. If the stock moves in your favor very quickly, don't be afraid to take profits. How much of a profit? Well, that's up to you. What do you like, 25%, 50%, 100% profit? You have to decide because the longer you wait, let's just say Apple made the move very quickly and now you have all this gain built up. It's worth $13. You only paid 64 cents, now it's worth $13. So you say, oh, I've got all this money built up, all these profits built up. But let's just say, you know, Apple doesn't go anywhere for the next 40, something, you know, 50 days, now there's only five days left and we hit calculate. Now the option's only worth $3. You could have sold it for $13 per contract if now you're waiting till expiration because you thought Apple would keep going up. Now it's only worth $3. So you just gave away $10 worth of unrealized gains. So the time to expiration is a huge deal. When you're a buyer of options, you want the stock to move very quickly in your favor. Otherwise, if it doesn't, the option value starts to waste away and waste away and you won't get as much bang for your buck anymore. So if we go back to the option chain and we were looking at the 160, so the 120 calls were considered at the money. The strike price is very close to the current stock price. 120, 121, those are called at the money. And though these options would be worth, that would cost $800 to purchase, $800 versus 64 cents, okay? $8 times 100 is $800. That's how much these options would cost. Whereas these only cost $64. So that's why people will default to buying these, these are called out of the money options because they're very cheap dollar-wise. But if the stock doesn't move, the option price isn't gonna move. If you buy these 120 calls, they will move a lot faster. The speed at which the option price will move in conjunction with the stock price is a lot faster. And that is calculated by the delta, okay? The delta column tells you how much the option price will move in accordance to the stock price. Delta's range from zero to 100. The higher the number is, the higher the delta to 100, that means the option will move the option price will move almost in lockstep with the stock. So if the stock goes up a dollar, the option contract value should go up almost a dollar as well. So you have to consider deltas. This 160 call option only has a .07 delta, which means the option price will only move about seven cents for every dollar that the stock goes up. These 120 calls will move about 55 cents for every dollar that the stock moves. So you have a trade-off. Do you want your option value to move a lot faster along with the stock? Or do you wanna pay less money for one of these cheapy options? It's completely up to you. Okay, so it's very, very important to understand where your break even is and where along the expiration scale, it could be time to take profits if we go back to our document here. So the break even for the apple trade, if you bought that 160 call option, take the strike price plus whatever the option costs, 160, 64. Now, if we bought the 120 calls, break even would be 120 strike plus $8 per contract equals, your break even is $128, right? If we go back to the option chain. So with apple at 121, all it has to do is get up to $128 a share just to break even. If you buy these 160s, apple has to go all the way above 160 just to break even. So you have to consider, well, what are the chances of apple moving that far in that amount of time? And that's something else we can look at which is a probability calculator. This is something that I've shown before. We'll talk about probabilities. Probability calculator, what you see in front of you is a tool that helps you understand what are the chances of a stock moving from point A to point B within a certain amount of time? Okay, so we're looking at apple and it's at $121 a share right now. And how many days were left before expiration? We're looking at May 69 days. Okay, so we're gonna put in 69 days here and we wanna know what the chances are. This future volatility number, I'll show you where to get that, but we wanna know what are the chances of apple moving up to $128. That's the break even if we bought the 120 calls, okay? So we hit go. So the chance of apple getting above our break even of 128 is a 37% chance, okay, 37% chance. Conversely, there's about a 62, 63% chance that apple will not get above the break even. You always want the stock to be at least above your break even. So in this case, we have a 37% chance of apple getting above our break even. For the 160 calls, the break even was 160, 64. You put that in both boxes. That's our target for both scenarios here. Click on go. So now we see there's only a 5% chance that apple can move from 121 all the way up to 160 in the next 69 days. It's only a 5% chance. Conversely, there's almost a 95% chance that apple will not move that far. So you wanna give yourself a decent opportunity for the stock to move from point A to point B. So choosing different strike price levels will help you get a higher probability. Yes, the option might cost more, it might cost more dollars from your wallet, but you have a higher probability of the stock being able to move that far. It's very important to understand that. Now, with stock buying, you'll never have more than a 50% chance of the stock moving above your cost basis. So if you buy apple at 121, what are the next tick of the stock will determine what are your chances are. So a stock will never have more than a 50-50 chance of moving above your cost basis on the next tick of the trade. And options won't, if you're buying options, they'll never have a higher percentage chance of 50% either because you can't get a higher percentage than what the stock would give you. But if we bought the 120 calls and we know the breakeven is 128, we'll just change this again, our probability is 37%, not as high as the stock, but it's still a decent amount. If we go up to the 160s, the 160.64, we know the probability is very low. Only 5% chance. So you have to take into consideration how strongly do you feel apple is going to be able to make that move. And once again, very important that if apple does move very quickly, try to lock in some gains because the longer you wait, apple could start to move in the wrong direction. So it's very important to take some money off the table. That's up to you to decide how much you're willing to risk here and how long you're willing to wait. So as far as finding this future volatility number, this is one number that you need to put in the calculator. And we find that by, let me just move this over here for a second. We go to ivolatility.com again. We look at the volatility information for apple. You get to the page, you type in apple, click on go, and it'll bring up a volatility page. All you have to do is click on this chart down here. You click on it, it'll bring up another window. And here's your volatility chart. This is not a stock chart. This is a volatility chart of apple. And if you look at the percentage over here, apple's trading between 30 and 40%. So you take that number and you plug it back into the calculator. I put in 40%, I use the higher number there. If you put in 30%, your chances are gonna be even smaller of going above the break even. Remember, we only have 5% chance now. If we reduce the volatility from four to 30 from 40%, watch what's gonna happen, click on go. So now you only have a 1.5% chance of apple moving from 121 all the way up to 160. If we put in the 128, probably is dropped as well. 128 is our other break even. Okay, now it's only a 33% chance. Okay, so volatility, this number tells you how erratic the stock has been moving. The more erratic it is, the higher probability it could get up to your break even level. So volatility plays a huge deal and the ability of the stock moving from point A to point B. So let's go back to our document here. That's really it in a nutshell. Buying options is all about being able to figure out is the stock going to be able to move from point A to point B? And if so, how fast will it get there? Choosing a strike price is very subjective. It all depends on your wallet and it also depends on how strongly you feel the stock can move from point A to point B. Like I said, most people default just to buying cheap options because they're cheap dollar wise, but they're not really getting a lot of it. The stock really has to move pretty far in order for you to make a profit. So you have to balance it out. How much are you willing to pay versus how much you think the probability is of making a profit? And just remember, it'll always be less than what it would cost to buy 100 shares of stock. Apple would be $12,000 to buy 100 shares. With the 120 strike we were looking at, that would be $800. The 160 strike is only $64. You choose, going back to the option chain. Delta's very important. That'll tell you how much the option is going to move in conjunction with the stock. Don't you want the option to move along with the stock? If so, you have to choose a higher delta option. You can watch my videos about buying deep in the money calls, and it'll talk all about deltas. So higher delta options obviously costs more money, but it's always less than buying 100 shares of stock, okay? So that's it for your basics of option buying. Part one, buying call options. Just remember, know your deltas, know your break evens, know your probabilities, and just know that all options values they fluctuate. They have bid and ask prices. You can get in and out. It will completely up to you. All right, so that's it. Let's move on to our next part of the video is our Saturday synopsis. We look at the charts, we look at the indexes, we look at individual stocks, see what happened over the last week, and what may happen going forward. Let's blow this up here. We always look at the SPY, which is the broadest measure of the market as a whole. Exchange traded fund for the S&P 500. We've had some good volatility over the last two weeks. Last Saturday we're talking about how the S&P 500 was just able to get up to the 50 day moving average. Let me widen this out a little bit so we can all see here what's happening. And let me blow this up a little bit. Let me move myself out here for a second. What do I want to do? I want to widen this out so we can see these bars. So let's say Friday, Thursday, Wednesday, Tuesday, Monday. So here's where we ended last Friday. This long bar here, this each bar is one day's worth of trading and it closed above the 50 day moving average. Very important. We have the 20 day, 50 day, 200 day moving averages which really helped me decide how a stock is going to move and where it might move next. When you have up trending charts and up sloping moving averages, that's very important to keep the bullish momentum alive. And whenever you get a pullback, it will typically bounce either off the 20 day or 50 day moving average. So here last Friday, it traded well below but finished the day, each little dash mark on the right side of the bar is the closing price. Closing price for the day is very important. So we finished above the 50 day moving average and we had a good week this week. The market was up the whole week, very strong. So I like the momentum to keep going for the S&P 500. Looks good. It's above both the 50 day and 20 day moving averages. If there's another pullback, it will probably bounce off of one of these levels as well and keep going. Let's take a look at the Dow Jones which had been the strongest of all three indexes this week. That's the Dow, the NASDAQ and the S&P 500. We saw some rotation out of NASDAQ stocks into these Dow Jones stalwarts. And you can see, we've just had a monster move this week up in the Dow. Once again, all time new highs, bouncing off the 20 day and 50 day moving average which is good. So we have this bullish momentum. Dow looks pretty strong. If we widen out to a monthly chart, we can just see how this is the meltdown in 2008, 2009. Just moving up nicely. This was the pandemic last March or one years out now and look at the nice rally, all time new highs for the Dow. Let's take a look at the NASDAQ. NASDAQ got hit last two weeks. It's starting to get its mojo back. So last week, definitely had fallen below the 20 day and 50 day moving average, had a nice rally back up this week. Friday, which was yesterday, March 12th, finished just below the 50 day moving average. So let me widen this out. We can see it. Here's the 50 day moving average closed on the highs of the day, still a little bit below the 50 day moving average. The 20 days starting to curl down and we can draw some trend lines here. Trend lines help you. We've got a down move starting to develop in the NASDAQ, okay? We've got a new channel, a down trending channel right now which we don't really wanna see. So we either need the NASDAQ to pop out and above the moving averages again needs to pop out or otherwise if we get a sell off it's gonna start coming back down probably to hit the lower end of the channel here. That's how it works. So we may have a new different movement now. We've been so bullish for so long and now it's starting to come off, okay? The 20 day moving average is starting to curl over. It may cross down below the 50 day but this is critical. Either it needs to pop out above the resistance line here or if it doesn't it's gonna get knocked back down and possibly come down to the lower end of the range here. So we have to watch the NASDAQ very closely. It needs to jump out of the gate right away come Monday. So we'll be keeping an eye on the NASDAQ. The Dow and the SAP 500 are both a lot stronger. Here's the Dow looking good and the SAP 500. So it's sort of a battle right now. If you've got the SAP 500 and Dow looking strong NASDAQ it's really those a handful of fang stocks that have been getting hit and taking the brunt of the move. So we can get the bottom feeders to come out. The NASDAQ should regain its footing. So let's take a look at some individual stocks. We usually take a look at some of these NASDAQ stocks because those are the most popular and the ones that are moving the most. This is Apple. We usually look at Apple. Apple still in this down move. We can still draw trend lines. So this is all part of technical analysis. You're looking for patterns. The trend lines can be drawn along the tops and along the bottoms of the prices of the bars. So Apple's sort of in this downtrend now. We need Apple to pop back up. Otherwise the next move could be down towards the 200 day moving average and the bottom of the channel here. Don't want to see that. I'm bullish on Apple. I'd like to see Apple start to move back up out of the channel here. Let's take a look at Amazon. Amazon's been sort of caught in this longer term channel here. Let me close this up a little bit here. So we look at Amazon and it's definitely fallen out of this triangle. The congestion pattern went all the way down to the bottom of the channel. Bounce back up and now it's hugging right on the 200 day moving average right here. This is the line in the sand. The 200 day moving average. It finished well below it. Hit the support here and it bounced. So what we need to see come next week, we need to see it bounce above the 200 day moving average and possibly back within the congestion pattern to feel more bullish on Amazon. Amazon really hasn't been doing all that much. Same thing with Apple. It's just kind of meandering and slowly dripping lower. Let's take a look at Netflix. Netflix also in this longer term channel here. It's above the 200 day moving average, which is good but below the 20 day and 50 day. Just kind of meandering around here. It goes up, down, up, down. So Netflix kind of stuck in this range. Not really much happening there. Not much to say about that. Let's take a look at Nvidia. These NASDAQ stocks we're concentrating on is because that's where a lot of the action is. Nvidia was stuck in this channel as well. Went down below it over the last two weeks, fell below the 200 day moving average but has once again popped back up and has popped back up above this lower support line. So that's constructive. That's constructive. We want to see Nvidia start to move back up towards the top end of this channel here. So we need the NASDAQ as a whole to start moving back up. What other stocks do we take a look at? We look at AMD. We always look at AMD. AMD is a favorite of ours in our newsletters. We sell put options on AMD. AMD also in a new sort of down trending channel fell down to the bottom of the channel and the 200 day moving average as well. You'll see a lot of action around a 200 day moving average because it's such an important number. Everybody follows the 200 day moving average. But what I like about AMD is that it finished above the 200 day moving average this week after being below it. So let's see if AMD could move back up towards the top part of this channel. That's what happened. You will see the stock ping pong within whatever channel is drawn now. So let's see if AMD can get itself back together and start moving up again. We looked at Oracle because it had been bouncing off some trend lines. And we talked about Oracle last week. Had a nice up channel, up trend, bounced off and then had nice highs. Had earnings this week, got knocked down but sitting on support at the 20 day moving average. We had some action. We took some trades on Oracle this week because I like how it's sitting on support here. So look for Oracle. Hopefully to regain its footing and start to move back up again. Anything else of note that we like to take? We look at Tesla. Tesla also, let's blow this up, you can see it. Tesla is very erratic. Had these congestion patterns finally cascaded lower. Another congestion pattern here, cascaded lower found footing around $550 a share. It's so expensive. And now it's trading around close to 700. It's hugging or right below the 20 day moving average. Let me see if I could widen this out a little. Yeah, so Tesla is just still volatile back to the middle of this past congestion pattern. Let's see if it could move above the 20 day moving average next week. Otherwise it's probably gonna maybe fall back a little bit but Tesla, very erratic, very hard to trade sometimes. Game stop, another one we look at. It keeps going. Game stop keeps going. Here was the initial move up to almost $500 a share. Gave it all back. This is back down to $50 a share and then all of a sudden trading back up to 350. I don't know what to say. It's fun to watch. I'm not trading it at all, but it's certainly fun to watch. So game stop, maybe wants to go back up to all time highs, $500 a share, we'll see. It's good to watch. And if you're playing it, be careful out there. Let's see, Microsoft, let's take a look at Microsoft. Same thing, we've had this long channel went above it, down below, above it below. So it's hugging the line here. At one point it was resistance, then it becomes support. It's got the 50 day moving average, 20 day moving average. So it's in between all these things. It's above the 50 day, right on the 20 day, right near the resistance line. So when you have all these lines drawn on a chart, they will act as magnets, basically. And you can see that Microsoft is trying to figure out where it wants to go next. Is it gonna bounce off the 50 days? Is it gonna stay above the resistance line? Is it gonna move back above the 20 day moving average? So these are things we have to consider. As far as being overbought or oversold, nothing's happening there. It's right in the middle, near 50, the 52 range. That tells me it's neither overbought nor oversold. So Microsoft needs to figure out where it wants to go. Last chart I wanna show you is this Costco trade that we talked about, or the Costco chart that we talked about last week. Costco, great company, had been cascading down, got very oversold on the RSI. When we put the volume on here, let's look at the volume, discussed how we had this huge spike in volume well above its normal range. Here's the volume on a daily basis. Had this huge spike, to me, which signaled that all the selling was capitulating. It was just everyone was getting rid of every share of Costco that they had. And that typically, that is when a stock will bottom, when it makes that capitulation move. And that seems to be happening right now. It's bounced pretty good off the lows and it's moving its way back up to the 20 day moving average. Now, these are down trending, down sloping moving averages. You gotta watch out for those. When moving averages are sloping downwards, that means it's gonna be harder for the stock to really get a rally. Whereas, if you look at the SPY, the moving averages, let's get rid of the volume here. The moving averages are sloping upwards, okay? So that makes it easier for the stock to keep moving in that direction. So you wanna play, it's hard to buy a stock when all the moving averages are sloping downwards. It's like trying to swim upstream, it just makes it harder. Okay, so there's your synopsis for today. Let's see if the markets can stay above the moving averages and keep moving higher. I'm still both, things are looking good. Vaccines have been rolling out and I think the market's got much more upside to go. All right, so that's it for your Saturday synopsis. Let's take a quick look at our website. Once again, PutSellingBasics. If you wanna learn about selling put options, which is what we do here at the Smart Option Seller, please download our free PutSellingBasics eGuy. Just put in your name, email address, and you will get a free copy. If you want any more information about what else we do, we have two newsletters and our one-on-one coaching. Having a lot of great information, have a lot of great stuff in our one-on-one coaching if you wanna leg up or just wanna get more handholding on how to get started. All right, so I hope this has been valuable to you. If you like the content, please give me a thumbs up in this YouTube channel. Don't forget to subscribe, hit that red subscribe button. And leave me a comment, send me an email. I'll always answer. All right, that's it for me today. I hope everyone has a great weekend and I will see everyone next week. This is Lee Lowell signing off.