 Everybody, looks like Tom's just going to get ready to start sharing his screen. I'm ready, Falstow, I'm live. All right, all right, all right. Just get this ball rolling. All right, so everybody, welcome to Cybertrain University and one of my really great, great friends. And I would even call him even a little bit of a mentor to myself, you know, is my friend Tom Saas. Obviously, everybody knows who he is. He's the founder of Thinkorswim and he came out and launched Tasty Trade. But before we do that, and we do this quick intro and get ready to start, if you notice on the bottom right hand side, everyone in the chat, we are broadcasting this also live on Facebook and Twitter. So if you want to just take that link, I know some of you guys are in a couple of chat rooms and big trading rooms. Just go out there and just share it with them so they can watch it. You'll have to log into this room to watch this video. And it's being recorded for all you listening pleasure. Now with that said, everybody, regarding about Tom Saas-Norff and Tasty Works, I know Tom for, jeez, I can't even remember. It had to been about 15, maybe 15 years ago. And we met up in Canada at one of the Traders Expo's events that we've done. And over the years, you know, we became very, very good friends. I'd done a lot of events with him when he was at Thinkorswim. I'd do a bunch of events. I was on his show on Tasty Trade a few times and also, which was always exciting. And it's so funny. It's two New Yorkers against two New Yorkers just sharing how things work. But, you know, he actually, one of the big things Tom's always likes, which I have to get up there and get him some bagels. He's a big fan of bagels. If you have an opportunity, drop him some off. He loves to eat just like all he needs to do. But not only that, but just kidding aside, he's a really great trader. You've seen him on his show. He knows exactly how to, you know, coles things out. And the reason why I want to have him on Cybertrain University is that, listen, there's a lot of us out there that like options, want to know how to trade options. But you know what, there's a lot of junk out there too. And, you know, I can't talk for the haters out there and I can't talk for people that, you know, think they know how to trade options. But you know what, you know, options is not for everybody for the purpose of someone didn't teach him how to do it the right way. And you got to know where to start the foundation of and everything else. And that's what's great about his show. He really kind of puts his money where his mouth is. He definitely shows exactly what's going on in an options play. And you know what, you guys always ask me, would you recommend as an option? Listen, I'm a day trader. That's what I do. But I do do some swing trading. I do do some options. When I have to, there's only one place I get my information from and it's from Tom, if I ever had to. And so I pick on him once in a while. But before the one last thing, I just want to remind everything about Tom because I hear about this all the time. Great traders think you need six, seven, 20 monitors. And just want to tell you something, a little thing about Tom that I always learned about him. I share this with everybody in my classes. I tell everybody this, they say, how many monitors do I need to trade? And I love to get the first time I met Tom in his office, where we're sitting in the boardroom in front of all the traders in this room. I thought he was going to be in this big luxury, exciting, you know, corner room of in Chicago by himself, all glass. But he's not, he's a very hands on guy. And I was shocked, but the biggest thing I noticed about him, he was trading on one monitor. And I want to pass this on to everyone, because I think this is very important, okay? Because we have a lot of traders out there, I think they know how to trade. It doesn't mean you should, but it's okay to try. But one thing, the biggest mistake people always say, and this is coming from his mouth, he always told me, and this always sticks out to me. And Tom, are you going to appreciate this? If you can't make money with one monitor, how the hell are you going to make money with six? He always told me. And I'm like, you know what, that actually makes perfect sense. And ever since then, I knew I was going to hit it off with him. So with that said, listen, let me pass the mic over to him. Tom, I know you just finished your show, and just thanks for coming here again. It's always a pleasure having on Cybertrain person. So enjoy. Sure. Hey, thanks so much, Falstow. And welcome everybody. It's an awesome opportunity for me. I would do this every afternoon if I could. I feel like I do sometimes, but I love talking about markets, and I love talking about, you know, trading. And so here we are. Falstow, you feel, please feel, feel free to jump in anytime you want. I will take this conversation, any direction that you want. So, you know, again, I'm excited. Do you have something specific direction you want me to go, or can I just riff off on a bunch of different directions that I've kind of prepared for today? Just let me know if there's something specific that you want me to cover. Well, you know, Tom, I mean, obviously, you know, you know, I know you got a plan. I don't want to mess up what you have, your game plan. Just one, just one thing that my traders always, you know, in my room always, always ask me personally, maybe you could share your knowledge on that. They always ask me, you know, when is the right time to trade an option? Like, you know, specifically, you know, me being a day trader, you know, I always like to day trade to hedge myself or an insurance policy, you know, because I think that's what people, because if people starting to get a little nervous now, they're seeing this market, you know, 28,000, and I'm having people ask me, you know, should I take my money off the table right now? And, you know, and I always kind of like to use an option play as an insurance policy and say, listen, you know what, if the market crashes, you know, there's no better thing than, you know, you're not going to just sell everything now. Maybe, you know, you don't know yet. Maybe you should use that. Or, you know, maybe just explain to them a little bit, you know, how to find an option play, because a lot of people don't know which option to trade. And one of the things we always do, you probably see this all the time, you know, us being day traders, we just kind of focus on making a day's pet. You know, we find a stock up 200, 100%, and sometimes there's a great option play and they don't know where to look. So basically those two things might help. And then obviously, you know, talking about the platform that you got, and I think that also has a, I think that's the number one big play people have to understand, too, is like, you know what, no matter how good you are, if you don't have the right software, you're not going anywhere. Sure, okay, that's great. I'll take it from there. And anytime that you want to jump in, you know, just feel free to, you know, to interrupt me and to jump on in, you know, I'd appreciate the two-way. No problem. So welcome, everybody. And again, thanks Fausto for the opportunity. Yeah, Fausto and I go back almost two decades to the early 2000s when we originally built TOS, and I met Fausto and it was funny. I think I've been surrounded, I grew up outside of New York City. I think I've been surrounded my whole life with Jews and Italians, and I'm unable to distinguish between the two, and Fausto fit right into the mix. So we hit it off a long time ago. I have one public service announcement to make, and then I'll get into my discussion. On the chat today, on the webinar, are three people from TastyWorks so that I don't have to look at any of the questions. So when you send in a question, I actually won't see them. And that way I can go forward and just give, you know, kind of an objective presentation and just keep streaming along. But the good news is, Scott Sheridan, who is the co-founder of, basically Scott and I have been partners since 1987 or something. So we're over 30 years working together, and Scott runs TastyWorks. Scott's on with Chris and Ryan, and all three of those guys are on the trade desk and run TastyWorks, our brokerage. So no questions are off limits. You can ask them any questions about trading. You can ask them any questions about the brokerage firm. You can ask them any questions about the business. Everything is on the table today, and they're on full-time for the next hour with chats. So please feel free to pick their brains and to write to them, you know, write, ask any questions you want. And then Fausto and I can concentrate on the presentation. And I think everybody wins in that scenario. So Scott, Chris, and Ryan are on and light those guys up and ask them anything. It's part of our culture is we are completely an open, open, you know, open book in that regard. We have an answer. Ask us anything, you know, approach this business. So I want to, I want to say one thing, and then I'll get into the discussion of answering Fausto's question then about timing and then, and then give a presentation. One thing I think is important, and I want to make this clear from the start is, although I grew up as an option trader in this business and I'm going on close to the end of four decades now, and that's been my primary business. And I do trade about 80% of my trades on an, on this year, I'll make about 15, right around 15,000 trades. And all of my trades actually are, are displayed on, on this platform, which is kind of neat. So on the tasty works platform, we have something that's called a follow page. And in the follow page, you see all these people that actually work for us. And we show all their trades because we're one of the few firms that kind of practice what we preach. And these are just an example of like a bunch of, you know, all the trades that I made today, and you can scroll through them over the course. There's probably about 70 trades today, something like that. But over the course of the year, make, you know, 15,000 trades or something like that. What's important about that is that about 80% of my trades are option trades, about 15 to 17% are futures. And about two or 3% are stock trades. And that's the nature of, of our trading. My futures trades are about 50% futures and 50% futures options. So the way my breakdown really works is about 80% options, about, about 8% futures, about 8% futures options, and about two or 3% stock. And that's just to give you an idea. Now, the reason I'm telling you this is because I think it's important to understand there is no such thing as in my eyes anymore. There may have been in the past, but now there's no such thing as a futures trader. There's no such thing as an option trader, and there's no such thing as a stock trader. There's just traders. And traders should be agnostic to product. And investors and traders should be agnostic to product. And you should trade where there's opportunity. And that's kind of going to be the focus of today's discussion is, is looking for opportunity in the marketplace and trading where there's opportunity. The product you use is irrelevant. And the decision of which product to use is based on liquidity and capital efficiency. And that's a really important takeaway. Just remember the future of trading for individuals, for self-directed individuals. And every, there's a few hundred people on this chat. There's probably a few hundred more people listening in, in various places. And I think the most important takeaway, and I love to give tons of takeaways. And the most important takeaway for starters is just to recognize that what will, what will differentiate us, differentiate us in the future is a combination of know-how because technology is commoditized, pricing is commoditized, and content is becoming commoditized. So there is a level of know-how. And, and then there's obviously a level of expertise and there's a level of know-how, but the real change over the next couple of years, it's just going to be about capital efficiency. He or she who could be the most capital efficient, the most mechanical and incorporate the most products. And the reason why products and strategy are so important is that's about diversification. People used to think, hey, if I just trade options or if I just use one strategy, I can become very proficient at that. But the reality is that is not the case anymore. Nowadays, with as efficient as the markets are and without with as theoretically efficient as the markets are, in today's world, you have to be able to apply different strategies. You have to be able to apply different underlines. You have to be able to apply different volatilities, which is also important. And then lastly, there'll be different durational cycles. So in other words, you might use 30 days, you might use 45 days, you might use 60 days. And I don't care whether you're a swing trader, a futures trader, an option trader, whatever it is, all of those differences, volatility differences, durational differences, strategic differences and product differences all come into play and they are all super important for success. And then the underlying theme over the next couple of years and over the next couple of decades actually will be about capital efficiency. So that's where I'm going to start this discussion. Now, Falstow asked a question, which I think was really good. And it was talking about timing. And in the old days, you know, back whenever, and I'm talking about when dinosaurs, you know, I started on the floor of the CBOE in 1981, I think. It could have been 80, but I think it was 81. And I stayed in there for 20 years and then moved on to build thing or something then to build Tasty Trade and Tasty Works. But throughout my entire career, I used to think there was different times of the day when there was obviously more opportunity. Like the first hour, there's noticeably higher volume. The last hour, there's noticeably higher volume. But part of the reason we used to think it was more advantageous to trade when there was noticeably higher volume was because you would get more stuff done and the markets were more efficient because, you know, obviously it was a individual slash market maker industry back then. Today, everything's done with computers and price discovery is done with high frequency market making, which means that on the technology used, specifically, this is the Tasty Works platform that Scott and I built and released in 2017. It's the latest piece. It's the newest piece of technology on the market. It's an absolutely beautiful software platform. And it's the only retail trading platform that's built on high frequency middleware. So the marketplace is a high frequency marketplace and our technology is high frequency middleware. All the other platforms out there, you know, like TD, Schwab, E-Trade, Fidelity, they're all legacy platforms. Nobody's built on high frequency infrastructure except Tasty Works. So Tasty Works is noticeably faster and it has lots of different types of functionality. But the neat thing about high frequency technology today, and this is the real takeaway, is that price discovery is now done for you on the technology. So in the old days, like if I wanted to place an order and I wasn't sure what price to put it in that, like a spread or an option or something else or, you know, some kind of like a covered call or something, yet you'd have to put it in below the market and then move the price around and do all this kind of stuff. You don't need to do that anymore. The technology today does all the price discovery for you and it basically shops the order to all these high frequency market making firms before it ever even hits the floor of the exchange. So the order flow today gets price discovery done internally inside the software so you almost always get the best price available and you don't have to worry about it, which is a huge savings of time. So the focus today, and what I mean today, I just mean the focus overall for trading is you need to stay small, you need to trade often because law of large numbers is critically important. So it's one, it's about law of large numbers, two, it's about diversification, and three, it's about capital efficiency. Now what I'd like to do today, and Fausto, I think this is kind of a good discussion topic, is I would like to talk about trading in November, end of November 2019. So I don't wanna talk about trades that we could have made a year ago or trades that we might be able to make next year. I'm extremely bullish on the opportunity that's gonna be available to us over the next year. I think between now and next year's election and then actually beyond next year's election, we are going to see a heightened level of implied volatility, not necessarily dramatically, not like 50% or 70% higher, but maybe as much as two, three, 5% higher, which means if you translate that into opportunity, it's about 20 to 25% more opportunity in 2020, well actually from now until the end of 2020, then we saw in all of 2019. In 2019, we had a contracting volatility all year and there were not very many spikes in volatility, so it was tough to find kind of individual pockets of incredible opportunity. Opportunity is the inverse of fear, it's the inverse of uncertainty, and it's measured by implied volatility. And again, I'll say that one more time just so it's clear. Opportunity is the inverse of fear and uncertainty, but the cool thing is fear and uncertainty drives opportunity and it's all measured by implied volatility. And implied volatility in a traditional sense was always measured by the VIX or the VIX Futures. On this platform, I just moved my cursor to the VIX Futures and you can see here, they closed up a little bit today, but they closed it, you know, let's say 1525, this is the VIX Futures right here. And 1525 in the VIX Futures in the start of a new cycle is a little bit below the norm. So the norm would be probably about 18, so it's about 20% below the norm for volatility. That's right around kind of the mean volatility level for VIX Futures. The mean level for volatility, which is VIX, which I'll show you in a second, the mean level for volatility is about 15, so it's currently 1278. So the difference here is that the VIX, VIX at the top of the page, represents future volatility. It represents volatility out in December 27 days from now. And forward slash VIX, which is the volatility future, it's just a little lesson in volatility, represents the spot market in volatility, which is volatility today. In 27 days, these two numbers will be the exact same thing. But today, this represents volatility as of today, and the VIX represents volatility 27 days from now. So they're both about 20% lower than their mean. And that's important to know because unlike price, volatility is mean reverting. So again, unlike the price of just as an example, and I'll use Apple here. Unlike the price of Apple, which is trading for 263, Apple is not mean reverting. So the fact that it was 245 after its last earnings came out, you know, just two and a half weeks ago, and now it's trading 263, almost 20 hours higher, does not mean it's going back to 245. But the VIX trading at 15 and a quarter is mean reverting because the VIX is just a math equation. And so fear by definition and uncertainty by definition is mean reverting. At some point it will go higher. Apple is based on price, has no reason to go lower. These are all just like little takeaways. And if you've never heard me talk before, this is a big part of our discussion, which is, and I'm treating this as if, you know, obviously there's people on here that have never, never heard a Tom talk or never heard, you know, the stuff that we talk about at Tasty Trade and the stuff that kind of, you know, I preach and promote about trading just because this will give you some strong fundamental know-how. And, and I think it's important to understand price is not mean reverting, volatility is mean reverting. Well, one of the things that we've done on Tasty Works, Tasty Trade is our network, Tasty Works is our platform. And one of the things that we've done on Tasty Works, which is our brokerage firm and our platform is, we've defined implied volatility by using something called IV rank. So even before we get to a quote up here on the top line, we give you IV rank, which in the case of implied, which in the case of Apple is 20. And if we looked at some other stocks, like just to use an example of a stock that's been moving around a lot, Roku, the IV rank is 34. Now you probably say, what's the difference between 34 and 20? Well, on a scale of 1 to 100, and remember this, this all volatility is mean reverting. On a scale of 1 to 100, Roku is ranked at the 34. So between 100, it's ranked at 34. Apple's ranked at 20. For stocks that are IV rank over 30, this is the number up here. And we're the only platform that shows this at the top of the platform. With the IV rank over 30, volatility is going to contract. It's just a math formula. Volatility is going to contract over time, which means there's going to be embedded contraction in there, which is good to know based on the strategy you're going to set up. If I went back to Apple, if I went back to Apple, in Apple, the volatility rank is 20. At 20, there is no edge in volatility contraction. So at 20, if the IV rank is 20, volatility does not necessarily have to contract. And in fact, in most cases, you're going to have what we call a little bit of negative edge. And there is a more realistic chance that volatility will expand a little bit and not contract. Therefore, premium selling strategies in Apple are not as attractive right now. Let me give you an example. If the IV rank is 20 or below and you wanted to trade Apple, one of the things that you're probably not going to do here is I'm going to open up December options. Let me just make this real simple for you so you can see. One of the things you're not going to do with the IV rank at 20 is you're not going to sell premium. So for example, if you wanted to sell as just an example, you want to sell a one standard deviation strangle in Apple and like sell the 15, the 16 Delta call and the 16 Delta put. Oops, hold on. I'm stalking here by accident. Hold on one second. If you wanted to sell the 16 Delta call and the 16 Delta put, which is a one standard deviation strangle 30 days out, you would not do this with the IV rank at 20. So for example, if you want to take undefined risk and by the way, we have no issue whatsoever with undefined risk. The dollar of risk or the dollar value of risk when doing undefined option trades is actually a better use of capital than defined risk. But it just depends on how much capital you have. Again, in the case of Apple here, this is not a candidate for a defined for an undefined risk strangle. It's also I'll move these up a couple of strikes and I will just create a really simple iron condor here. And in the case of Apple, because the IV rank is only 20, it is not a case for an iron condor either. So one of the first things to understand is you have to really have a be able to put context around implied volatility. And if the implied volatility in Apple is so low that the, which is right here by the way, 25, that the IV rank is only 20 with an expected move of $11 or $12 in the next 30 days. These are not good strategies for this particular period of time. If I went to Roku, if I go to Roku on the other hand, open up December options and I've got to open up a few more options here because Roku is a little bit more volatile stock. And I went to sell the one standard deviation strangle. So I sold the 195 calls and on the put side, let's see, I'm going to sell the, I'm going to probably sell the 135 puts. So if I went to Roku to sell the one standard deviation strangle in this case, I'd be collecting a lot more money obviously 525 because the implied volatility Roku is 66. That's why you have a stock that's, that's $100 cheaper than Apple, but you're collecting almost three times as much money. And since the implied volatility rank is over 30, this is absolutely a doable strategy in Roku. Now, if for whatever reason you didn't have as much available capital and you wanted to turn this into an iron condor, you just roll the strikes up a little bit. I mean, it's obviously your choice and you can create a five, oops, I'm sorry. You can create a $5 wide iron condor. And this is a $5 wide condor short the 175 180 call spread and the 145 140 put spread. And in this example here, it is absolutely a candidate for an iron condor because the IV rank is over 30. So I just looked at two stocks and they're both in play. Apple and Roku are both in play. Apple has an implied volatility rank of 20, which makes undefined risk trades like strangles and defined risk trades like iron condors, not interesting to us at that implied volatility level. Roku on the other hand has an IV rank of 30 over 30 34.2. So selling an iron condor in there or selling a undefined risk strangle are both attractive strategies to us. And again, in the mix of putting lots of positions on the key here is trade small trade often and, you know, and put and trade small trade often and put trades on that fit mechanically into the, with or live within the context of whatever the current implied volatility rank is. Now, if you said to me, okay, but I really want to trade Apple. I don't want to trade Roku. I'm like, okay, that's cool. So we'll go back to Apple. So what are some of the types of trades that we can make an Apple with the IV rank where it is right now? And the answer is there's a couple of different things. So for low IV rank, I'll clear these trades. And for low IV rank, we can do a couple of different things. First of all, if you are, if you are bearish in Apple, one of the things you can do is you can buy the 265 puts, you can sell the 260 puts. And in this example here, you're just buying a put debit spread, buying one strike in the money, selling one strike out of the money. That is absolutely fine for an IV rank of 20. If you wanted to make it a little bit bigger and buy a seven half dollar widespread or a 10 dollar widespread, just, you just drag it. That's why this platform is so beautiful for option trading. And it's so easy to trade options on. You just drag it and you, there's never any clicks you have to make and everything defaults to mid-price. And all the price discovery is done, you know, is done for you. And then if you want it to route this order, you just double click on it. That's it. And it will pop up. Oops, let me put working orders here. It'll pop up into your working order column. If you want to cancel it or change the price, you just hit cancel order and it's gone. That's high frequency. That's a high frequency platform and there's nothing else like it, but it's super simple. So again, low implied volatility rank, you want to get short apple. There's a couple of different ways. A, you could sell the stock. That's totally fine. That's what we call a static play, but it's very expensive. B, you can buy a put spread and a put debit spread. That's another way. C, you can counterise something in here. So for example, let's just say, I'll just open up a fewer strikes so you can see this. You want to do a deez Jan calendar spread. And you're a little bit bearish and apple you could buy, you could sell the two 55 puts in December. And you can buy the two 55 puts in, um, In January. And that's about as cheap as you're ever going to see a calendar spread a put calendar spread in apple for $2 and 28 cents. Now you're probably kind of a little bit wondering, well, where could this spread kind of go to? And the answer is it could probably go to about $3 and a half based on where the puts are currently trading in December. So there's definitely an opportunity here to make, you know, I don't know buck buck and a half. If you like this counter spread with reasonable, reasonably low risk reward. But if you wanted to change this and make it into a diagonal, these are also trades that are absolutely appropriate for low implied volatility rank. So if you wanted to make it into a bearish diagonal, you would lower, you'd drag the, um, the short strike down one. And this is a long put spread. If you wanted to make it a bullish diagonal because you were actually a little bit bullish in, in apple, you would drag it up the other way and go from 255 to 257 or 260. And that's a bullish diagonal. So, so different strategies that meet the criteria for low implied volatility rank would be static delta, which is just buying or selling the stock a debit spread. If you're bullish, a call debit spread, one strike in the money, one strike out of the money. And if you're bearish a put debit spread, one strike, one strike in the money you buy one strike out of the money you sell, or you can do a one or two month calendar using the same strike selling the front month somewhere around the 35 or 40 delta is fine. And then, or I usually do the, I usually do the 30 or 35 delta. And then, and then you buy the next month out. And if you want to diagonalize that, you diagonalize it by moving the front month option higher or lower, depending on if you want to give it a little bullish delta or a little bearish delta. What's interesting here is this is a regular calendar spread. And when we look at a regular calendar spread, it's going to carry a tiny little bit of short delta. But if I wanted to make it a little bit more bullish, you can see I can turn the deltas long. And if I wanted to make it, oh, you know what? I should change the quantity here. So this makes it more sense to everybody. So this is a regular calendar spread. Just says only one lot. So you can see it. So it's a regular calendar spread. It has a tiny little bit of short delta to it for deltas, which is the equivalent of four shares of Apple. If I wanted to make this spread. If I wanted to make this spread neutral, I dragged it. I dragged the puts up one. If I wanted to make a little bullish, I dragged the short puts up another one. And now I'm long six deltas. If I wanted to make it a little bit more bearish, I drag the short side down one. And now instead of being short for deltas, it's short eight deltas. And that is how you adjust your trades. And that is how you strategically apply low implied volatility ranked stocks. Now one of the neat things about this platform is if the platform actually lets you easily search for high implied volatility stocks, like I have it high. This is Ivy rank on the market watch on the, on the watch list page. So I'm searching right here for high implied volatility rank. And if I click it twice, I get to low implied volatility ranks. I could see all the stocks with low implied volatility. So if I want to do something either static directional, calendar diagonal or debit spreads, I would look at this list. And if I wanted to do something and I wanted to look like I wanted to do something like that, I would look at the stock stocks that are candidates for short strangles, straddles, iron condors. I'd look at this list. So at the top of this list here is a stock Apache with an Ivy rank of a hundred. So we're going to go to Apache for a sec. And all you do on this platform is just click on anything. There's, you never have to type in anything if you don't want to. And the beautiful thing is there's no pages. It never takes you to a different page. You never get lost in a platform. That does not apply to a premium I run for of you all the time. So I just typed on Apache. The stock is trading at closed at 22 87, but the Ivy rank is a hundred. The difference between Ivy rank at one and Ivy rank at a hundred is almost 11 times. More opportunity. I know it sounds crazy, but it's 11 ex the opportunity of zero to 100, which it sounds nuts, but that's how much it is. implied volatility rank and you wanted to sell the nearest out-of-the-money call they'd be the 23 and the nearest out-of-the-money put would be the 22.5 and this is a $3 strangle which is wrapped around at the money if you remember the strangle that we looked at an apple with a 20% implied volatility rank was almost was just a little bit over $3 as crazy as that sound that's a $260 stock this is a $23 stock because of the high implied volatility 67 and because of the IV rank being virtually a hundred now if you said you know what I don't I'm uncomfortable with this naked position so I want to do something and like make it into like let's just say an iron fly for example here you go now you have an iron fly and let's say or this is actually I take this back this would be your iron fly 23 24 20 oh no no I take right here 23 so you that would be your iron fly and so that's almost like a perfect iron fly if you wanted to make this into an iron condor a little bit more of an iron condor you just drag these and you can have here's a here's a one and a half dollar wide there's a one and a half dollar wide iron condor or you can make it more equidistant and do it this way or you can skew it up and down and see you know again you can move it any which way you want this is Delta neutral right here if you want to make it if you want to make a little bit long because you were bullish for whatever reason in Apache you just drag the strikes up a little bit make a little bit more long want to make it even longer you just drag the stock strikes up now you're a long five deltas if you wanted to make it even longer you can tighten up the foot spread and so there's all these different things you can do and on the platform makes it super simple but all of these qualify for a high IV rank now I just threw a ton that was a lesson like of that was a that was a 20-hour course 20-hour graduate course thrown into about 20 minutes here so I'm gonna give you a chance to to to breathe for a second and Fausto I'm gonna just I'm gonna ask you to hop on for one second make sure that everybody's cool because I haven't been reading any of the chats or messages make sure we haven't lost anybody and that this is exactly the direction that you that you want me to go no Tom I follow I I'm following along with you very well I mean the only difference is that some of us traders you know you know my trade specifically we don't trade very expensive stocks you know being a day trader like right now I don't know if you've been watching it Uber just took off I don't know what news must have came out and I mean I own the stock I just bought it at the last hour so maybe you could kind of bring up and show them what would an Uber you know option play will be on that one if there's something out there sure sure let's talk Uber for a second so Uber is a little bit different so I happen to be I happen to be long a little Uber myself I'm long some stock I have a few option plays on in there and in fact in this account we have on a this is a both slightly bullish put ratio spread long one short three and it's a kind of a classic little bit of a bullish you know Uber play Uber does not have an implied volatility rank because Uber is a new issue and it doesn't have a hundred days of history yet I mean I'm sorry it doesn't have a one year of history yet so it doesn't have a true IV rank at this time but Uber and Lyft are definitely both in play now there's a couple things that you know we should talk about with respect to Uber and how you know it's in play and how you know it's liquid number one is it traded 51 million shares today anything that trades 51 million shares automatically is a good stock for stock trading good stock for day trading good stock for option trading it's plenty liquid enough second thing is during the day the stock market in in Uber is about a penny wide so right now it's a nickel wide because that's after hours market but during the day today Uber is size up only about a penny wide so it's definitely a tradable stock also when you go to the options you can see and this is what determines the liquidity but as long as there's you know there's 7,000 the 27 calls traded 1,300 of the 28 calls and and 800 of these puts traded so when you look at the volume of the options trading in December there's plenty of December options trading so there is absolutely Uber's tradable also when you look at the markets in here the Uber always shows markets in nickel-wide instruments but the spreads trade in pennies so if you're looking to do something in Uber I mean obviously like Falstah just mentioned Uber is definitely a stock that you can as a as a as as as somebody wants to trade or day trade or do whatever you can definitely do that with Uber because it is liquid and it is it's plenty liquid and it's inexpensive I guess it at you know 28 or 29 dollars the option marketplace is the spreads trade in pennies the individual options trade kind of in nickels I think they can fill inside of that but they don't have to and the nice thing about it is it has half point strikes to so 27 27 half 28 28 half 29 29 half and 30 so there's plenty of stuff to do Uber is one of those stocks that we consider every strategy because it doesn't have an IV rank so every strategy is open to you at this point in Uber there's no you don't have to limit yourself you know to low IV ranks strategies don't you don't have to be high IV rank it can be either one you can pretty much run the whole gauntlet of anything you want to do and the other thing with Uber is you probably want to take a look when you're when you're trading Uber you also kind of want to probably drop lift into your watch list not that they move side-by-side in fact today lift was down most of the day when Uber was up most of the day oops what did I do here oops I did it wrong hold on why I should know this because I have a bunch of lift positions on but as you can see here lift was down today when Uber was up so they don't necessarily always move in the same direction or the same way but it is important to watch the two now if you see the volume in lift at 8 million shares in Uber at 51 million there's definitely a reason that Uber should be the default over lift although the lift options are relatively liquid as well getting back to Uber for a second I just want to show the comparison between those two because Uber just trades more than lift it trades more volume every day then it trades a lot more by every day than lift does but what's available to you at Uber is is virtually anything so if you were looking at defined risk trades in Uber like I'll just show you like some of the stuff that we do if you're bullish in Uber here I like the position that we have on in this account which is a ratio spread which is like long one at the money put this is a typical trade that you put on for high implied volatility stocks like long one at the money put short two out of the money puts I'll just put it here and it trades for about a 15 cent credit this one by two it's the synthetic equivalent of being short like an out of the money put at the let's say the 25 and a half strike up it's about a 40 cent put your short theoretically and so it's a very high probability trade if you didn't like the idea of a ratio spread and you're bullish Uber's definitely a stock where you can just sell a put spread and it doesn't matter you know really what spread you sell you want to sell the 20 2826 you know you collect about one-third the width of the strikes that's pretty normal for a short credit spread on the put side if you didn't want to do either of those and you wanted to buy a call spread in Uber like let's say you wanted to buy the 27 and a half calls and sell the 29 and a half calls we'd be totally cool with that too a $2 wide call spread $1 in the money and trading for less than one half the width of the strikes absolutely something that meets you know all of our criteria if you decided okay I want to do something that takes a little bit more risk than that and you wanted a little bit of bullish you want a little bit of bullish Delta let's say in Uber we have no problems selling the 27 puts and like just as an example like the let's just say the 30 calls so this would be considered to be a skewed strangle where you're selling a little bit bigger put then you are a caller on move this down I'm sorry move this up a little bit to like here so you can do it so 27 puts 31 calls this would be an example of a skewed strangle which would let you play the upside in Uber because you're selling a bigger put than a call a couple things to note in Uber which is you should always just take a quick look at the skew so like Fausto talked about just mentioned a second ago and talked a little bit about you know like Uber is in play so something I want to show you about Uber which is pretty interesting if you look at the 30 the stock is trading for the stock flow we have to use closing prices so the stock closed at $28 right where this line is right at $28 if you go $2 up the calls are 55 60 see that right here okay and if you go $2 down 28 the puts are 50 55 so what we call in this case is there is no volatility skew in Uber so sometimes when you look at stocks and I'll show you some examples in a second but sometimes when you look at stocks the calls are more expensive than the puts because the perception is that the velocity of risk in certain stocks is to the upside in Uber there is no marketplace perception of risk so in other words they're valuing the calls and the puts risk wise almost equally so when Fausto says what do you think about Uber here well the marketplace is telling you that there is the perception of risk is about equal when you look at something very different like spiders which is the S&P 500 you're going to see huge downside put skew so the spiders closed at just under one just under 311 so if I go up to 315 the calls are $1.68 okay just these are $4 higher the puts if I go $4 lower down to 307 or 306 it doesn't even matter if I go down to 306 and go almost $5 lower the calls are 274 so 168 verse 274 the puts further out of the money are dollar more expensive the marketplace assesses what we call vol skew into the put side here so the velocity of risk or the perception of risk in the S&Ps is to the downside and going back to Uber for a second there is no skew in there the calls and the puts are virtually the same price and when the calls and the puts are the same price you end up in a situation where with no skew so there's no perception of risk in Uber which makes trading in it actually a little bit easier and one of the cool things about tasty works is if this view confuses you at all or just you think hey you know what this little hard we also give you a a curve view so you can see things in graphical format there's a distribution curve here these are one standard deviation and two standard deviation lines and then you see you lose money down here you lose money up here and you make all this money in the green area in between and then you can adjust your strikes by just dragging accordingly in here so the platform is very is very easy to use and it's also very visual for people that prefer a curve mode you know to a table mode I mean I personally prefer the table mode but that's because I'm used to looking at things up and down in vertical fashion a lot of people really especially people new to the trading business love the idea that we have a visual or curve mode because nobody else has that and it gives you you know just different views we also have an analysis mode we also have an active mode but those are you know things you can learn about it future at future times when you when you log on did that answer your question Fausto about about the you know just in general about about Uber oh okay I might have lost him but hopefully hopefully I didn't it's okay all right I'm gonna keep going then a couple of other things to to note here and I'm gonna clear off Uber for a second and I'm gonna talk about just in general I'm gonna talk about markets because this today was today was interesting because it was the first day that we had any kind of a down day and at one point today we were actually down about 25 handles we only closed down 10 handles so it's not that big a move but at least it's a little bit of a breakup of the monotony of the of the up move every single day what we would like to see here and what I'd like to see is a lot more two-sided action because I'd like to get into a situation where there's where there's some heightened volatility and when there's heightened volatility what's really important is that you stay with liquid underlines one of the neat things about tasty works is that we actually have a liquidity meter on the on the on the market watch page on the watchlist page so you can just choose liquidity as one of your drop downs and then you can look at everything that has four-star liquidity because that will put you in a position where price discovery and we're price discovery and the and the actual ability to get in and out of underlines is is right in front of you and is super important and you know what it is all the time also one of the neat things that we do is we spend a lot of time talking about potentially different earnings place now one of the stocks that has earnings this afternoon was Macy's and as you can see the IV rank is a hundred so that means that Macy's was you know there was the most the most possible as as much as possible uncertainty and fear in Macy's further earnings overnight which is a binary event so Macy's which is not probably the greatest earnings play in the world because it's only a $15 stock at least it had a lot of premium and you can see the volatility Macy's is extremely high couple things to note about about earnings place one is you can see the difference in volatility in the front month December of 75 and in the back month of of January of 69 and then it drops off dramatically in February and May to about 58 one of the things that people ask us all the time is how do I know where volatility is going to settle in tomorrow how do I know if I sold December if I sold January where volatility is going to be in a couple of days and if I sold something in one of these months or one of these weeklies whatever it is you know how much money could I expect to make if the stock doesn't move and how much could I expect to lose if the stock does move so if you did a December position the volatility here is 75 the chances of tomorrow it's probably going to drop down into the low 60s or high 50s so there's going to be a drop a significant drop of of almost 20% to 25% implied volatility that we can tell because the back months won't move also this number here shows the expected move between now and November I'm sorry between now and December expiration December 20th so this is a really interesting thing because the stock is going to move about $2.41 between now and December expiration also based on current implied volatility of 70 of 75% the expected one-day moving here is and this is interesting you 19% volatility is about a 1% move in the underlying so 75% implied volatility is about a 4% move in the underlying for one-day move at a very minimum just so you you notice if it's 60 it's about it's just about a 3% move on a $15 stock that means your average daily move in here just to give you some context with implied volatility rank your average daily moves going to be between 45 and 60 cents and its current volatility levels when it when volatility smooths out it's going to be about 45 cents a day and knowing that will allow you in stocks like Macy's it doesn't have to be Macy's but in stocks like Macy's it will give you some context around what the daily expected move is and the implied volatility rank will give you the choice of many many many different strategies especially with the implied volatility rank at 100 so what's important about this what's important about the implied volatility rank of 100 in Macy's is if you mix that with the implied volatility of Apple at 20 and you do a let's just say a two month trade in Apple with 50 with I think that says 58 days with 58 days to go and you do a Macy's trade with 30 days to go you are mixing up as I talked about earlier you're mixing up the underlines Macy's versus Apple you're mixing up the duration December versus January you're mixing up the volatility's 25 versus 70 and and you're mixing up the strategies hopefully a defined like a debit spread in here or counter spread versus the Macy's trade which is like let's just say we a strangle or a straddle with the Ivy rank at 100 that is a lesson that very few people in this entire industry have ever have ever really discussed at length and it's a huge takeaway and you can see it just from this slash Apple slash Apple slash Macy's thing let me just show you real quickly because I'm gonna make this into a this is a let me do this real quick I'm gonna go to January I'm gonna buy the 265 puts I'm gonna sell the 255 puts I'm gonna buy this put spread I'm gonna put this order over here and then I'm gonna go to Macy's and in Macy's I'm gonna open up December options I'm gonna sell the 15 straddle and I'm gonna put this order in over here okay now I want to just review this because this is so cool so or it's cool to geeks like me these are two different underlines that is one immediate source of diversification two different underlines two different industry sectors it doesn't matter they they aren't they are they are not that highly correlated this is two different to racial cycles this is December with 30 days this is January 58 days that is what we call diversification this is two different strategies a short straddle and a long debit spread that is your third level of diversification so different underlines different iterations different strategies and the fourth level is different implied volatilities Macy's 75 apple 25 you cannot do any better doesn't matter about you know being you're not you're never going to know direction you know nobody knows what's gonna happen next what we do know though is we can be as mechanical as possible and put things into place that give us the best chance of success if we do it enough times and here is a absolutely perfect example of how to accomplish that hey Tommy I should question because I was looking at Macy's and I like Macy's a lot it's got destroyed if I want to do a leap play here's a chart of Macy's just yeah right it's been destroyed yeah if you go back like two years three years like if you show Charlotte a further yeah sure you'll I mean if you like if you go back you'll see is that not further now yeah you're in 2019 you gotta go like yeah I know I I here let me see if I can pull this back here there you go yeah you can you can see when you go back like the 18th like November and like that's perfect spot right there like November right there this is 2017 right here and it's up around 40 ish but if you go to 2018 that's the high of 2018 and so it's up around yeah still in the 40s right but if you go back to November like where you were in 18 it hit it was there before right around this price and went back up so for me looking at this it because obviously you know right yeah it's Christmas time people gonna spend money and it obviously earnings obviously don't be spending money so if we you know I think it's probably a pretty pretty decent look I mean you know better than me how you would trade as an option so if somebody didn't want to swing trade this let's say you did like a leap on it well there there's a couple ways to do it if you want to play it kind of as a swing trade first of all you'd go to January here because the I be ranked so high and you'd sell like the 14 or the 13 puts naked because if you sell the 13 puts naked and you let's say you got 85 cents for him you'd be buying the stock at 1215 if the stock went down and I think that that's the number you'd be very comfortable with buying stock at 1215 so if you sold these puts naked and I should be I should have tell you that in a tasty works account whether it's it doesn't matter to us whether it's an IRA account or individual margin account or portfolio margin account we support stock options futures and naked options in all three so we're one of the only firms allows you to sell naked options in an IRA account puts and calls and same thing with futures and futures options in an IRA account puts and calls so that's really important to know but I would sell like for example these 13 puts at 85 cents and then for January and it's a high return on capital and you'd be buying stock if the stock went down to 1215 you know by January expiration I think that that's totally reasonable buying the stock you know $3 lower or 20% lower than where it's currently trading if you wanted a leap strategy we would go with what you call a poor man's covered call so in a leap strategy here Falstow we would go to the February options I wouldn't go beyond February okay I wouldn't go beyond February if we were doing February I'd buy probably the February 13 or 14 calls and then I would sell a near term like December like 16 call and that's we call a poor man's covered call you buy a long-term option like the descent like the February 14th and you sell the December for you sell like the December 16th and that's what we would do okay and that's that's the equivalent of a covered call but with only a dollar 39 in risk okay and that's how we play the upside you you know it's it can go significantly high it can go over $2 and it's just it's how we would play it now one last thing of everybody know because sometimes people want to do well two things I saw some of it I saw you staff answering some of the questions you know we trained a lot you and I've been in Canada so many times someone was asking you can you be in Canada by next year I heard is that what they said yes yes yes absolutely okay so that's gonna be really huge now the thing is somebody wanted just to trade the stock off the platform how can I just buy the stock and not just do the option play well also just so you know so like like like all the other brokers stock trading on tasty works is free so let's just say you want to buy Macy's right it's so easy you just type in Macy's or you have it in your watch list you just click on the offer that's it and then just hit review and send so you just double click on this and then there's your buy and if you you know like what time is it it's oh we we just turned off the after hours trading at four o'clock otherwise I could have shown it shown it to you but that's how you do it you just if you want to sell a stock just click on the bid like this if you want to buy a stock just look on the offer like this and that's all there is to it okay and it's at a limit or a market order those everything we do is limit orders if you want to change it to a marketable limit order you can I mean we offer market orders but it's not a default the default is limit it's always limit okay yeah but we do that to protect the customer no I hear you could you trade pre-market aftermark on the platform yep you can trade an hour before and an hour after and it's and everything's free I mean I'm sorry all the stock trading is free option trading we charge a dollar to open zero to close and we cap everything at ten dollars so if you trade a 50 lot or 100 lot it's capped at ten dollars so it's it's the best we have I believe the lowest rates on the street for options among the lowest rates for futures and obviously stocks are free so you can't go any lower than that all right great great all right so how did has everybody get a demo or how can they practice the platform how do you guys do that to explain to them so we have something that your guys are gonna really like we have a something that we're we're called we call the trading challenge right now and if anybody wants to try out the platform you can go to our we have a site which will post up I'll actually ask Scott and Ryan and Chris to post the site right now for our trading demo and we have something which we call a trading challenge and we'll give you $5,000 and for two days you can trade stock on the platform you get you get 48 hours during the market hours and you can trade stock we've been running this now for about probably less four or five months this this this promotion and you can trade stock on the platform for two days it's a virtual account but and you keep all the money you make up to 250 dollars and you can't lose you know we eat the losses and so you get 48 hours 5,000 bucks you keep all the money you you can make and we will credit your account that money when you open an account so you get a chance to check out the platform and and if you make any money you can keep it we've given away you know tens and tens and probably hundreds of thousands of dollars so it's crazy but you can get a chance to check out the platform that way and so you know you can log on just play around with it and and and you know just you can see what happens see see how you like it it's an amazing platform for trading stocks it is one of the best platforms in the industry it's just so damn simple you just click on whatever it is if you wanted to trade apple for example you just click click on your watchlist it pops it in you just double click on review and send and you're done I mean listen I you did this last time you told everybody about do you just launched at that time when we did the last event where did you actually get an account and you know and I know we tell us all time like I was I just came I did an event in Vegas the other that you know a few months ago and people always asking me and you know they've been on training mode I'm like well how long you've been training for oh you know about a year I'm like a year how do you pay your bills I'm like listen you got to trade real money it's only gonna learn and you know everybody wants to demo everyone's platform but when you get a live account and you're taking the losses and you're doing that I mean what's better than that and trust me to everybody it's a lot it's a big difference when you got real money on the line and then when someone else's money I mean it's better than that and you have two days I mean you really know if it's real or not yeah you just go to to tastyworks.com forward slash challenge and that's it okay tastyworks.com forward slash challenge and then you just have to you know you just have to put a use you have to create a username password you download the software and you click on a couple of buttons and boom you're live and then you get two days to play around with it you also get us if you open account and fund it before December 31st you're going to get a subscription to the small exchange for free it's it's our new futures exchange that we're launching at the end of this year and we will not be offering that promotion in 2020 so it's a it's a hundred dollar you know exchange membership so exchange subscription so it's super cool so you get that as well in addition to all the money that you can you know keep from the trading challenge so it's very cool that's great great well anyone at could you trade cryptocurrency trading on it that was a cool question only the only the futures right now so if you wanted to trade for example the Bitcoin future right now there's no options available yet they're becoming in January February according to the CME but yes you can trade the CME product which is right up you know which is which will open in it opens at five o'clock tonight but you can trade the Bitcoin futures we don't offer cash Bitcoin but we will next year so it's coming in the first quarter you'll be able to trade the spot market for digital currencies you'll be I think we're gonna offer four or five currencies in the spot marketplace but we don't get that many requests most people that want to trade it trade a little trade the futures up here but whatever we're gonna offer the spot market in the first quarter of 2020 good all right Tom just one last question I have for you to repeat without you said early as everybody knows so your project your projection prediction is stock market's gonna go higher even after the election is it matter who's gonna be elected or more or less you know just feel very bullish about the whole thing with China and everything that was not my prediction whatsoever I'm not sure you got that but that is absolutely not my prediction I believe that the stock market we I believe that we are in the tail end of a very long prolonged bull market I believe we were grossly grossly oversold in 2008 2009 and I was very vocal about that at the time I think we've spent the last decade or 11 years you know working out of that oversold condition and we are into an extremely overbought condition right now I think there is not necessarily a reason for us to go down in 2020 but there is not a healthy risk reward for staying long so I think that 2020 is gonna be a year for the opportunist I think 2020 is gonna be a year that individual investors can take advantage of heightened implied volatility that there's gonna be it's going to be the year that the strategic investor that the trader shines and not the passive investor but I think that we're in for some I don't think we're I don't think we're crashing I don't think we're gonna have a huge massive sell-off or any that kind of stuff but I do think that we're in for we're in for probably one to two years of at least distributing this massive move over the last 10 or 11 years and I would think that you're going to see you know potentially some kind of a nice pull back we did not have a single volatility expansion that's significant in 2019 and we didn't have a single sell-off in 2019 we had two massive sell-offs in 2018 I doubt that we're gonna go through 2020 without some significant selling pressure at different points so I think you're gonna see a much more volatile market I wouldn't be surprised to see us go into the elections you know a couple hundred points lower a couple hundred points higher than where we are right now but my guess is it'll be a couple hundred points lower and then we'll see what happens you know as we get through 2020 I do expect it to be a great year for traders I think the bias my bias is to the downside but I believe that the real risk is dramatically to downside so I think that the velocity of risk and the and the true pot odds are downside yeah I think the same thing I was with you that agree totally agree with you you know depending on what happens with you know like you got unemployment at the low I mean how much low could it go interest rates are at the lowest everybody's working I mean that and you're plateauing only thing could probably push this market a little bit higher if you get this China deal but then after that what's left you know I mean but I think anything that would scare the market I think it will make a massive sell-off more than the more of a massive game exactly what I that's exactly how I feel as I feel all right well Tom listen thank you so much for being here everybody that said let's thank Tom for taking the opportunity to be here and he's probably exposed it working all day but Tom it's always been a pleasure and just always like to have you on it's you know it's so it was just a great educational class and great platform everybody go out there and try that of that that two-day platform and see what it's all about and get to get the opportunity to join enjoy that see what the trading is but most important for you do that just make sure you practice and see what you doing but you can't beat that you can't beat that deal Tom thank you so much and look forward seeing you in the upcoming events everybody thanks everybody if I will speak to you have a happy Thanksgiving and I hope you enjoy your 2019 and have a great 2020 thanks everybody