 Okay, in this video I want to show you how to enter a long call vertical spread. So as you see on the chart here our market assumption when we put on this trade is bullish meaning we want the stock to go up. It's best to put these on when implied volatility is low. The optimal time frame, just like most of our trades, is 30 to 60 days to expiration. Looking for a profit target of about 25 to 50% of max. So we want to manage this trade. We don't want to wait until it goes to expiration. We want to manage it at a percentage of max profit. And the downside risk is defined. So this is a defined risk trade. We'll know exactly what that is when we put the trade on. And of course this is bullish so the upside risk, there's no risk to the upside. It's only profit to the upside. And the probability of profit on these trades is about 50%. It's about 50-50. So these are purely directional trades. You're not gaining the high probability like you are on some of our other strategies. However, you can use this trade A if you have a strong directional assumption that you think the stock is going to go up. You can also think of it as like a stock replacement. So instead of putting up a ton of capital to buy the stock, you can simply get in the trade for a lower amount of buying power reduction by using this strategy. So the trade setup is essentially we're going to buy one in the money call. And anywhere from the 55 to 75 delta range works well. And then we're going to sell one out of the money call, kind of in that 15 to 40 delta. And really we want these strikes to be equal distance away from where price is currently trading. And we'll get to the platform and I'll show you what I mean. As far as a note, so theta can be positive if price is higher than the breakeven point. And theta can be negative when price is lower than the breakeven point. I'll also show you what we mean on that. So let's go to the platform and take a look at an example. So the example we'll look at is in Tesla. So as you can see, Tesla had a huge run up and now it's since pulled back. And what will happen sometimes when stocks make huge runs like that and then they'll need to take a breather and people need to take profits. The stock may not be done running to the upside, especially when it was so strong. Now it could very well keep going down. There's nothing to say it can't. But to me, this is a good entry point. After a strong stock makes a little bit of a pullback, a lot of times it'll continue on. So what the trade is basically saying is that when price is right now, sometime between now and expiration, it's going to trade a little bit higher. So I think that's a good bang for your buck. So there's no other technical analysis or any garbage, no trend lines or support resistance or those things that only work about half the time anyway. We don't use those at navigation trading. Really this is all about just adding this position to our portfolio. The other reason I like it is because I want some long delta in our portfolio. So I want some bullish directional exposure in the portfolio and so this is a good stock to choose potentially. So if we go to the trade tab and so the first thing, so we're going to go to the call side. We're buying a call vertical and essentially what we'll do is first we want to find the, first of all, let's see where price is at. So price is currently trading at about $250. So we want, we want strikes that are equal distance away that are in the money and equal distance away out of the money. So if it's trading at $250, let's look at the $240 and the $260. So that would be 10 points away on either side. So let's go to the $240 and we'll simply buy vertical. Then we want to adjust this down here to reflect the strike that we want, which is the $260. And the reason this isn't so definitive, I mean I could do the $245 and the $255 too. And once you analyze the trade, then you can make a better determination of which exact strikes you want to be in. Really the key up front is just making sure that you are equal distance away to the downside and equal distance away to the upside. So we've got $240 and $260. So let's right-click and analyze this trade. And so here's what we've got. So as you can see, and then you want to, it's already set, but you want to set that, set your slices to break even. Now it goes off the screen, but just choose the expiration date, which in this case is $422. And make sure this calendar up here says the expiration date as well, so $422. So we've got our line in the sand, kind of where we're at right now. This is the break-even point. And as you can see, the probability of being profit is around 50%, and the probability of loss is around 50%. And so our max loss with just one contract is $998. And our max profit is a little over 1,000. So it's a pretty much 50-50 deal. We're just hoping that the stock goes up. And then we can capture that for a percentage of max profit. So let's go ahead and get the trade. The other thing I wanted to mention, as I said on the slide, is that theta can be positive when price is higher than the break-even. So to this side. So if we click and drag the hash mark, watch the theta number here. That'll start going positive. Meaning every day that price is above our break-even, we'll be collecting that theta. So theta's working in our favor, just like an iron condor or a strangle or any of our income strategies. Now if price moves down below, you can see theta gets negative. Because then theta is working against us at that point. So just keep in mind, just something to watch and just understand that theta will be positive if you're winning in the trade. And it'll be negative if you're losing. So that's really important just so you understand how it works in conjunction with all your other positions. And you always want to be net positive theta so that you're earning that income every day that you're in the trade. So let's go ahead and place the trade. I like to click off that just to see where the current price is trading. Because the market is open. So we want to know where price is. So we simply right-click, confirm and send, and we got filled at $9.99. So now we're in the trade and we will wait to see if we can get an up move in Tesla. If we do, we'll manage it for a percentage of max profit. If it goes against us, we're simply going to, we're going to take the loss that it gives us. With defined risk trades, we don't really adjust those. We really need to just be comfortable with the amount of risk that we have in the trade. So I'm comfortable losing $999 on this trade if Tesla goes against me. And that's how you have to be with defined risk trades. Because of transaction costs and other things, it doesn't really make sense to do any adjusting strategies or rolling. So we're looking at this as simply a win or lose trade and so we'll see what happens. I want to talk about how to close a long call vertical. So I'm not going to go through how to close every single strategy in the course. Because it works basically the same in every situation. But I did want to show you one example just to give you an idea. So remember we put on a long call vertical in Tesla because we had a bullish assumption, applied volatility was low, entered it with between 30 and 60 days to expiration, looking for a profit target between 25 to 50% of max profit. Downside risk is defined. So we knew exactly what our risk was when we put the trade on. And on the upside, obviously no risk because we're making profit as the stock moves up. And with a long call vertical, it's about a 50, 50 bet, it's about a 50% probability of profit. So really we put these on when we're just looking for that directional position. And we're looking at it to add long delta to our portfolio or if we just have an assumption that that stock is going to move up. So let's go to the platform and take a look. So on Tesla, we put this vertical on back on March 2nd. Today's the 16th, so 14 days ago. So two weeks ago, we put this on and if we take a look at the charts, we can see, put it on when it was right around here. And we were looking for, it had this huge move up, had a little bit of a pullback, and we were looking for a little bit of a continuation move. So there's no technical reason to do this. I didn't magically say at this point it's gonna reverse. What we did is we're simply, based on some other positions in our portfolio, we were looking for some long positions and a lot of times after a huge move and then a little pullback, a stock will kind of continue on its way. And so that's what we were looking for and that's what happened. As you can see a couple days ago, had a big move up and it's moved up a little bit since. So if we take a look at our analyze tab, you can see this is where we're at. This is where price was when we started. And it has since moved up from there. And so look at our max profit is a little over $1,001, let's just call it $1,000. So we wanna make anywhere from $250 to $500, right? 25 to 50% of max profit. We're at the profit of about $323. So that's about a little over 32% of max profit. So good time to take this off, we'll bank this profit and we'll redeploy that capital into another trade. So to close the trade, if you've seen any of the other courses I teach, real simple, simply highlight, so you click on one leg, shift, highlight the entire position, right click, create closing order. And we're gonna sell the call vertical because we bought it to enter. So we're gonna sell it to exit, your order queue will pop up. The spread is between 1240 and 1325. So we probably won't get filled right at mid-price. So let's kick this down a few cents, get confirm and send and see if we can get filled at that point. Looks like it's not quite trading there either. So we can go in and cancel replace. And let's move it down to about, price is moving around a little bit on us. And you can see it jump down. So let's go down to 1295. And this is part of the game that you play. And so we ended up getting, we put it in at 1295. Got filled at 1316, which is great. So take a look at our monitor tab now. You can see we bought it for 999, sold it for 1316. We just did one contract in this example. So if we pull up our handy dandy little calculator, all you gotta do is take 13.16 minus what we paid for it, 999. That gave us a profit of $3.17. Multiply that times 100 because each contract represents 100 shares. So we made $317 on this trade. So good trade in just a couple of weeks. That's how you close a long call vertical spread. Hope that was helpful. See you in the next lesson.