 One of the most common questions I get asked is, you know, how do I start day trading? So what me and my mentor about it for our viewers on YouTube is create a free mentorship course that reveals our 12 secrets that every single brand new day trader should know before they get started. But please take note that there is limited seating every single week. So please reserve your spot at myinvestingclub.co. Link is in the description. All right, enjoy the video guys. Sorry we missed last week, had a bit of stuff that I had to do, had to handle. Get into control, still not under control but to working control, to working chaos. October 6th, 2020, what a day, what a freaking day. So today's topic is, like I said a minute ago and you guys weren't here for this cause we just started recording but we were gonna talk about today the topic that I said I would never talk about because I'm simply, I'm just not the guy to talk about this in an educated fashion because it's not something that I do often but I have gotten a lot of questions about it and people want to know. And so today we're gonna bring on the man behind the scenes of the options basics videos in the library. Mr. A.K. Wildlife, Mr. Mr. John, Mr. John and we're gonna bring him on to talk about selling premium in terms of big key levels, 3,800, right? All those are big key levels and now 3,200, right? We got the 3,200 test, we didn't test it to the penny but when you're looking at this in terms of technical analysis, I mean, these are pretty much my levels that I'm watching, right? I think I said this today, I was like, I wanna see the spy hold 340. So in the SBX it's 3,400. I really wanted to see that. The resistance that happened was simply due to the catalyst. Okay, there was no technical reason for the pullback. Okay, every single short was underwater and getting raped, royally raped every second. I mean, there was several candles where we just literally melt up. Like we're just like, just skipping dimes, skipping dollars really, giving 50 cents at the time. Like it's nothing. And then tweet, all of a sudden the tweet validates the short thesis. No, no, no, that's not how this works, okay? That's not how this works. There is no technical reason for anybody to sure to break out of 3,400. Yeah, yeah, I think it's gonna be a false breakout. Okay, okay, all right, all right. I don't believe that, okay? I don't believe that. I think if you're shorting here, you're stubborn, okay? You're stubborn, you're stubborn. You don't wanna stop out. You want the world to come burning at your feet. Just fall apart. Let the market fall apart, fuck them all. Let me make my money, remember? No, I would like to see it survive, to be honest with you for the sake of all of us. I do not want to go into a recession. Mm-mm, mm-mm, mm-mm. And for those of you that, you know, I just said I don't wanna go into a recession, yeah. That's not a recession, okay? That's not a recession. Why do I say it's not a recession? Because for one, housing and lending has not slowed down at all, okay? Not at all. Housing values have not slowed down. People were saying here, right? People were saying here in March, I was saying housing is not dropping. Housing market is not dropping. Prices are not dropping. They're like, don't worry, give it time, okay? Well, that's six months ago. Housing is still not dropped. Residential housing is still not dropped. Commercial has because a lot of businesses, a lot of small businesses have been going out. And so there's a lot of supply in terms of commercial supply. There's a lot of commercial supply, but residential, people are not losing their homes yet, yet, yet, right? We have the eviction ban and shit like that. Nobody's losing their homes yet. We don't know the damage of that yet, but I would think we would have some kind of indication on where that was headed six months into the future, right? Housing is gonna drop. Nope. Nothing. I'm just like, I don't think it's time to short, to be honest with you. I mean, this was an average correction, right there. Average correction. Calls for more help from Congress. There's low risk of overdoing it. Oh my Jesus Christ. What's futures doing now? I just can't fucking live with this guy. That level right there, this bottom right here, this is the next key level. Between here and here, I have no idea between here where we're gonna go, okay? Honestly, I would like to see us shed those 40, 50 points back to 3,300. Then I would say, probably looks like a long, probably looks like a long on the bounce, probably looks like a long. I'm gonna long it off at this level. Maybe stop under 3,291, something like that. Hey guys, my name is Tosh Bradley. I'm one of the head mentors and moderators at my investing club. If you have any questions about getting started in trading, getting started in MIC, MIC in general, text me at 213-458-5997. This is not a robot, it is me directly on the other end of my business line and we'll get you in the club. We also have special promotions going on that I can get to you depending on your trading needs. Hit me up. That's pretty much where I'm at. In between here, snowman's land. I have no idea where this is gonna bounce, tank, rip, dip, go sideways. I have no freaking clue what it's gonna do. So yeah, let's get into this. So let's bring old Johnny on. John, you ready? You ready, you ready, you ready? Hey, Joe, can you hear me? I got you, bro. Good, sup. Not much, how is everybody doing? We good, ladies and gentlemen. Is everybody hearing? Loud and clear, you're good. Perfect, good. All right, so let's get into this. So what we're gonna talk about today is we're gonna talk about selling premium, okay? And I think the, what strategy are we sharing? What is this actual kind of option strategy called? So there's a couple of different ones, but the main, you know, obviously selling puts or put spreads, you know, vertical spreads, those are the two that we had kind of discussed. I use a variation. That's what we're gonna talk about is that version of the put spread. Yep, all right, so then I use a variation of that and I call it a wheel strategy, which starts with selling the put. So it's, there's a few extra steps, but this is something I've worked on for a while, but that's the very basic of it. It starts with the put, sell the put, tell the put spread. All right, so let's kind of just define here. And I think I'm pretty sure you've done this in your series. You've talked about what selling a put means, right? Yes, I think so. Probably go over that real quick. I mean, I know most people, you know, I've watched the videos that have been put out in the option series and a lot of people, you know, are into, you know, to buy a call or buy a put depending on which direction. And so, you know, what you just have to think about is when you're obviously buying a call, your expectation of that is that the price is gonna go up. Opposite for puts, right? When you buy a put, the price is gonna go down. So when you sell premium, right, you just have to think about the same how that works. So it's kind of the flip. So if you're selling a put, you believe that the price will stay above whatever short strike that you sold, right? If you sold the 95 put and the stock's at 100, in most cases, you hope that it stays above 95 anywhere, you know, or higher and you collect your premium and you have no obligation. Right, gotcha. So to put that into perspective, guys, I know a lot of people come from small cap short selling, okay? So let's kind of just graphically represent this really fast. So I'm gonna do this in the empty space over here in the chat box. So if buy, no, okay. So it's the same bias. Okay, buying a call and selling a put is the same bias. So let's talk about this. Let's say, like, let's say SPI for example, right? SPI, the small cap runner ran from, you know, four bucks to 40 bucks, right? So it was four and it was 40 and we short at 40. How much money can we make percent-wise? What is our maximum percent return? Somebody answer that, not John. So the maximum that we can make is a return from 40 and it would have to go to zero in order for us to make a hundred percent on the position, okay? That's short selling of stock, okay? So let's just think about stock. Let's not think about selling puts. Let's not think about anything like that, okay? Maximum profit, no, not exposure. Not talking about risk exposure. I'm not talking about any of that, all right? We'll get there. We're gonna get there. Maximum profit is 100% of whatever your position average is. If I short 100 shares at 40, right? If I short 100 shares at 40, that means my position costs $4,000, okay? It's not the amount of margin required to hold the position. My average cost is four grand. If the stock goes from 40 to zero and I never add, what do I make? Four grand, that's it. That's maximum I can make, okay? So why do people short small caps so much? When the edge lies, right? So the edge lies, that's where all of the edge is in small caps. In small caps, they all look like this. Four to 40, generally back to four, sometimes to zero. But they all go from four to 40 to four. They all do it, okay? So they all do it, yes, exactly. Yeah, after creating options, I don't know why I'm shorting small caps anymore. I don't know why you are either because people will brag, you know, they're like, oh, I shorted at 40, covered at 20, right? Nailed it. And in options, we're over here buying at two, selling at eight. And people are like, yeah, let's do whatever. This is the hero, right? That's what everybody thinks. That's what everybody thinks. But the dude that, you know, went from two to four, four to six, six to eight, made 300% on his money. Nope, not entertaining. But the one that shorted at 40 and covers at 20, I'm just using SPI as an example. I'm just like making it up. The person that makes 50% on a short is way more popular than the person that makes 300% on an option, right? Thank you so much for watching our video. If you want to see more of our videos, please subscribe to our YouTube channel by clicking the button here. We do our best to post a new video every single day. If you have any questions about MIC or any general trading questions, please text Tosh using the number here. Also, stay up to date by watching some of our most recent videos right over here.