 What's up navigation traders welcome to this week's video update today's Friday April 12th this is your exclusive video weekly update for all the alerts and positions exclusively for pro members before we jump into the alerts for the week let's check out the community and talk about who got caught being hot this week earlier this week we posted a about a new back testing software called edelta pro in the community this is going to be something that we might potentially be rolling out to our community to our two navigation trading members but we wanted to get our diehards feedback first so we just posted it in the community give you guys a kind of a first look and dig in and we had some great feedback and specifically from this week's winner of who got caught being hot Seb S he dove in and you know found some different things about the calculations being done within the software that he questioned as well as you know provided a very detailed analysis of what he found and so that's what it's all about guys crowdsourcing you know making everybody else knowledgeable making everybody else better traders so congrats Seb thanks for your contributions you got caught being hot alright let's jump into the alerts starting with Monday first alert was a rolling adjusting trade in ZN which is the notes and so we had this which had already been adjusted to a 123 and a half straddle and so we kept those same strikes but we were under 21 days to expiration in May so we just wanted to roll that out to the next expiration kept the exact same strikes and just rolled it out to extend duration collect more credit and keep that dream alive and so here's where here's where we're at on that one we've we've gotten a little bit of profit on that piece since we made that role but just waiting for some more theta to decay and time to pass and then we've got another piece to this trade which is a another short strangle that we have not adjust made any adjustments to after I was actually trying to get filled yesterday on Thursday for about 30% of max profit and then price just dropped today pretty hard taking us out of that ability to book a profit so hopefully get a little bit of a rebound gets more time to pass theta decay and we can get out of that one for a winner next trade was a closing trade in WBA so we had an iron butterfly in Walgreens boots alliance booked around 12% of max profit in just six days usually we wait for a little bit more profit but that just came pretty quickly and and so we just went ahead and took that off when you got an iron butterfly you know you're not waiting you know kind of the the max profit that you're looking for is you know maybe 25% of that credit 25% of your max profit and so since we got this so quick you know we went ahead and just booked that and ran next trade was a opening adjusting trade in IYR this is the real estate ETF and so we just added an iron condor implied volatility on the the percentile jumped up to that 50 level so gave a little bit more premium in those options so we added to this and like said we're targeting just you know 20 to 30% of max profit because it's a super tight iron condor almost like a butterfly or an iron fly so let's take a look at IYR we've got a couple pieces on here one of which is still in April and so let's go to that one first and then I'll go to the alert so this one is you know came up and breached our break even here we closed out our untested side prices continue to stay high now we're at a point where we need to roll this a we're in April with how many days we have left in April 7 I believe six okay so we've got six days so next week we will be rolling this I just wanted to give it a little bit more time IYR is actually down a little bit today but the market is really strong and so I'm hoping just for a little potential little pullback I mean can we get a little bit of downside not to get off track here but look at this crazy run this quarter I mean since the beginning of the year this thing has just been on fire to the upside with very little pullbacks some hoping that next week we get a little bit of relief from this rally you know if we can get a little bit of a downside downside move that's gonna help a lot of different things in our portfolio but back to IYR so we're just hoping you know maybe we can get a little bit more downside before we do that roll but we will look to roll this next week to extend duration and keep that piece on our on our radar and then we the piece that we just added from the alert is the one in May which is this tight iron condor you see prices still dead-centered got a little bit of profit since we put that on just waiting for some more next trade opening trade in 6B this is the British pound implied volatility has stayed extremely elevated one of few symbols around that's had high IV is the British pound and that's just due to the uncertainty that's going on with the whole Brexit thing well we put this on on 4-9 which is Tuesday and then literally two days later they announced that they're extending the deadline to October a bunch of the uncertainty fear just dropped out of the market and when that happens implied volatility contracts which is exactly what we were looking for and and so we went ahead and book that let me take a look at FXB this is the corresponding ETF for the pound and so we put this on on Tuesday 4-9 got a little bit of a contraction the next day and then the next day just had the bottom fallout of implied volatility right all the premium got sucked out of these options so we were able to book almost 50% of max profit on this in just two days typically you don't get that unless it's kind of an earnings play in a stock but always good to happen when you're in the trade like that so great trade in 6B and and I'm showing FXB just to show the implied volatility we don't trade FXB we actually trade forward slash 6B which is the future but we're just we're using the corresponding ETF just to look at the implied volatility next trade was a rolling adjusting trade in natty gas so we went ahead and rolled this one from May which at that point was under that 21 days had 15 days to expiration we rolled that out to June with 48 days we kept the same strikes now one thing I wanted to note here because I with within the alerts portfolio just to lessen any confusion we try to stagger those strikes so that we can manage each piece separately however on that gas let me pull up the platform if we go to Nat gas well let me jump back here okay so what we did is we we roll this to the same strikes and so that was the 2.75 call and the three put now in June we already had a short three put from our other piece of this trade that was already that was already out in June but and so typically if I was going to roll this out I would adjust that strike from three to like 3.1 or 2.9 you know something like right above or below it so that we could keep them separate the problem was and now I'll go to the platform to tell you why the problem is if you look in these options because these are fairly deep in the money look at the three the three is the only one that really has any open interest right around there so I normally would have went to the 2.8 or the 3.01 but look at that open interest it's it's very sparse you know we want to be in a in a position where the strikes that we're looking at have at least in the hundreds if not the thousands of open interest per day and so that's why we chose that that three that three put so what does that do does it mean we can't continue to manage each of these pieces of the trade separately no you absolutely can but when you look at the analyze tab for example you can see we've got two options on that short three put and so you got to look at kind of both of these together now these are very similar positions the way that price has been moving and we've needed to roll strikes and adjust and and extend duration has gotten us to the point where both of these pieces are very similar trades as you can see this is on the call side we just these these strikes are staggered just by a tiny bit 2.75 and 2.8 and then the puts exactly the same now so essentially we just have a couple contracts around the same trade so in that gas we are we're just looking for an up move some more time to pass and implied volatility has gotten really low here so that we'll need to make a decision at some point if we just want to close this one out and take some loss I mean we've made back after that huge massive move we had in that gas we've made back a ton of what we were down but we're still not quite back to even on this trade still down a couple thousand dollars and so we'll have to you know once we get closer to the next expiration which we've got 46 days so a lot of time but you know if implied volatility is still low we'll have to decide what we want to do on that one all right next trade was the closing trade in 6B I already went over that booked a nice profit there and we had a closing trade in JP Morgan we put on a pre-earnings long call in JPM and in anticipation that we might potentially get an increase in implied volatility as well as kind of some momentum going into that earnings announcement it's a pre-earnings trade so we didn't want to take any overnight earnings risk if we look at JPM I mean look at this and this is you know we got a little bit of a pop here in implied volatility and then implied volatility just contracted into earnings to a point where we didn't even want to take an overnight earnings trade in the community on this because implied volatility was so low now and then afterwards you still got a contraction after the announcement and you can see price did pop higher but uh but the premium got sucked out of those too so you may have been close to a profit excuse me you would have you would have been profitable had you held it through earnings but that was not the design of the of the play and so we got out just before earnings we had a little bit of a pop-up in price and we were able to squeak out just a tiny profit get out of the trade a little better than break even we're just fine obviously we're looking for more profit but better than taking a loss next trade was an opening trade in SPX so got some questions around this because we have not done any calendar spreads in a in quite a while and that's because implied volatility has not warranted it we like to put on calendar spreads would implied volatility is low and in a calendar spread we're selling the front month buying the the further dated options in anticipation that the near-term options are going to decay quicker than the longer dated options and that's how we profit from a calendar spread I really like to do these in these big indexes SPX RUT stocks like Amazon high priced symbols that's where you get the best bang for your buck uh calendars are kind of slow moving so um just FYI we haven't done in a while make sure you go back and review our calendars course uh where we give you kind of the step-by-step details of how we trade these things I also mentioned you could use SPY but like I said we just we just like to use those higher priced symbols so SPX SPX is 10 times the size of SPY so obviously if your account does not warrant putting on this size of position you need to look at SPY if you're going to follow this trade so let's take a look here at SPX and let's get rid of some of these theoreticals so this is what the calendar looks like okay so as you can see I mean it's a it's a it's a lower probability play I mean these break evens are not as wide as say an iron condor or a strangle or anything like that but it's a it's a positive theta position so we're collecting that positive theta time decay each day the difference between a calendar and an iron condor or a strangle remember on an iron condor or a strangle we want implied volatility to contract so we put that on when implied volatility is high look for a contraction and that's how we profit whereas the calendar is a positive vega so we actually want volatility to expand to benefit this trade so you'll see here let me get rid of some of this junk uh you'll see here the implied volatility uh is actually even lower than what we put it on yesterday but ivy percentiles at four ivy rank is 10 so we want implied volatility to pop or expand uh to benefit this trade and then of course we want price to kind of stay in a in a decent range not make too huge of a move but what we'll look to do with this trade is you know if price gets outside one of these break evens we might potentially look to add another piece to that add another calendar just like we teach in the course uh just kind of going with the flow of price uh if it does stay range bound in this in this area uh we'll wait to book a profit and we'd like to book anywhere from you know 10 15 20 25 percent of what we paid for this which in this case was 1995 okay so that's just a little kind of refresher on the calendar but go back and watch the course if you haven't done these in a while just to make sure you are refreshed and aware of how they work next trade closing adjusting trade in zw this is our wheat trade we did this this morning so we closed the remaining call side of our iron condor uh earlier a couple weeks ago price had breached our upside break even so we're just holding on to that call vertical side price came back into range back to a point where we booked a nice profit on this piece of the trade and then we're still holding our other iron condor which is out in june so price is still fairly centered just waiting for some more time to pass some more theta to decay on that one and lastly we opened up a new trade this morning on wells fargo they announced earnings this morning and implied volatility stayed elevated to a point where you know ivy percentile was at 68 and so we put this on uh it's only it's still uh before 10 am central time uh in the markets while i'm recording this and so price has come down significantly since we put this on you can see here uh you know they announced earnings but then they had a kind of a delayed conference call after that so something was said on that conference call i don't know what and frankly i don't care but it is causing some volatility there and implied volatility we put this on uh the ivy percentile was 68 now it's popped up to 83 and so you know if uh you know this is something that is even uh better pricing to get into now from when we're where we got in you can get it more centered around where it currently is as well as uh get some better pricing so um not the greatest timing on that one but we'll see what happens if price does continue lower here we may look to add because implied volatility would stay elevated but we'll check that out next week and do whatever we need to of course price could bounce back and at some point here unless you know there's something crazy going on with wells fargo that we don't know about uh you know this implied volatility over the next week or so could should really contract which will help our position so those are all the alerts let's take a look at some of the other trades oil has been a thorn these last couple weeks super strong uh we need we needed we need some downside in oil uh and so we've got two pieces on here first of which is this inverted strangle now price is outside of the range of the break even but remember after we make an adjustment we've really got to look at the untested side and there's still a decent little amount of premium in there so we're not looking to roll the calls down anymore at this point excuse me roll the puts up anymore at this point obviously if prices continue higher then we will roll the puts up but at this point we are staying status quo and then we've got this piece here where you can see price is a little bit out of range on this one as well but same story the puts still have some premium so we're not looking to roll those puts up or make any adjustments yet got a lot of time here 34 days to expiration on both of those pieces so got some got some time and just need a little bit of a pullback in oil you know down to um you know down to any level any pullback would be uh would be gracious of oil to give us at this point uh es uh we have this long put vertical that we've been just kind of holding and rolling for that short delta exposure prices hanging out around the break even point so just looking for some more downside to get back in range to uh to benefit that I mentioned natty gas I mentioned z n I mentioned z w d i a all right so we got two pieces here one of which I was considering rolling today but when the market's this strong I like to just give it a little bit more time you know in case it's just kind of an overreaction and not that I mean it's been an over it feels like an overreaction from from the january 1st of this year but uh the price has moved out of the range of this short call vertical I was going to roll this out to May today but I'm going to wait till next week uh these options do expire friday of next week so we will be rolling next week regardless uh but thought I'd give it a little bit more time to to get back some of that before I did so and then we've also got this full iron condor in d i a as well price is just kind of hanging out near the upper end of the range looking for a little bit of downside and some more time to pass on that EEM is another one I was looking to potentially roll today but again with the market being strong I'm just waiting to see if we can get a little bit of a dip into next week before we make that roll again these are in April so we will be rolling this next week IWM got an iron condor hanging out in the upper end of the range here looking for a little bit of downside some more time to pass there IYR already mentioned J&J so we've got this pre earnings long straddle on uh man we price was way up here and we're at a point where look real close to taking profits and then price just fell back in range and then started going down thought maybe we would get some momentum to the downside and be able to get out and then it just kind of retraced back in so uh we are at uh 416 before market so on 415 we need to be out of this trade to avoid that earnings risk and so hopefully we can get a little bit of a move in one direction or another to uh to benefit this implied volatility has continued to grind higher which we anticipate going into earnings but we just haven't gotten the price movement that we need so hopefully we get a little bit of a flare in price early next week before we have to take that one off lulu we put this all we put this one on to add some long delta to our portfolio and it was we were kind of looking at it also as kind of a post earnings uh short put or in this case we put on a long call vertical uh had this big gap up after earnings we tried to get filled on a short put vertical uh never did and then uh price kind of grinded sideways and then we and then we went ahead and put this trade on got a little bit of a pop that's kind of fallen back in we are profitable on this trade but just hoping for a little bit more upside before we book that one netflix similar to j and j we've got this pre earnings in this case a long strangle uh just looking for some more price movement on this one uh if you look at the implied volatility of netflix we still haven't really gotten a pop uh going into that earnings announcement we've got a few days netflix uh announces earnings on 416 aftermarket so we want to be out of this trade by 416 sometime on that day uh so hopefully we get a little bit of a price movement and volatility going into that then invidia this is another one that we'll be looking to either close or roll next week this is in april this is the call side vertical of an iron condor we closed out the put vertical after price breached the break even hoping for a little bit of downside back into range here uh but we will deal with this one next week as well qqq we've got two sets of short call verticals could see price is in range here these are both out in may so we've got time don't need to make any adjustments at this point but just looking for some downside to benefit that smh we've got two pieces on here one of which is this uh inverted adjusted strangle and similar to what we were looking at in oil and prices outside of the range but we've got uh a little bit of premium still there to go so not making any adjustments on that piece and then in our other piece uh you can see price is still in range here we've got some time just waiting for a little bit of downside and potential uh you know time to pass to get back in the game on that one i mentioned spx spy very similar to the di a where we're just hoping for a little bit of downside early next week before we do anything with this one that is in april so we will be dealing with that next week i mentioned wells fargo xl k we've got this long put vertical on that we've we've been holding for that short delta exposure so looking for a little bit of downside there and lastly xrt the real estate etf uh this one's just hanging out in range here just need a little bit of downside before we book anything in that one overall i did want to mention i haven't mentioned the kind of our portfolio uh delta so we like to keep a range of our deltas our short delta versus our theta uh versus our theta in kind of that five anywhere from one to one to five to one range right i say this over and over and that gives us a little bit of short delta to kind of help protect on the downside but when we've had a market that's as strong as it has been we're going to naturally acquire some short delta and with implied volatility as low as it is our theta numbers are way down from when they were from where they were just a month ago as well so those two factors have really kind of gotten our uh short delta to theta ratio a little bit out of whack we're actually at about six to one right now so we're a little outside of our range uh kind of our top of our range we like to stay in that five to one range with the with today's strong up movement in stocks you know we've we've we've pushed above that so we're at we're at about six to one on our overall ratio so next week you know i you know some of those april positions we may need to just cut those loose and take a loss uh you know we may roll hey you know the market may open up way down you know on monday and and then we'll be in good shape again so things can change really quickly but assuming you know things kind of stay as they've been we're going to look to add some long delta next week and potentially cut loose some of our short delta to get us back into a between one to one and five to one on that range now we're not going to do it all on monday but we're you know we want to slowly do this over time over the next week or so to kind of massage that back into range things can change very quickly so you don't want to over adjust you don't want to overreact but we definitely want to we definitely are more short overall in our portfolio right now than we want to be now i don't mind it as much i mean and that's the beauty of kind of the the the methodology that we use with that range is i mean we've had such a huge run and nothing says that the market can't continue higher but we also need some a little bit of two sided action right i mean we we you know going down to 2800 would just be a tiny blip on the radar of downside i mean that would do nothing uh as far as the overall market but that would be a huge huge benefit in our our overall portfolio so not saying not predicting that's going to happen but we've been on a strong run here and so a pullback is definitely you know in the in the realm of possibilities although it hasn't seemed like it's in the realm of possibilities with this strong market but we will wait and see and all you can do is play the cards that you're dealt and so that's what we'll do everybody have a great weekend happy trading talk to you next week