 Hey everyone, welcome to this week's video update. Today's Friday, February 5th. We're gonna go over a little bit about the markets, go over all of our alerts and our portfolio. First, just a quick reference to the day trading. Really nice week this week up 54.91, our best week since September of last year. So big week, you know, a couple of weeks ago we had a big red week, came back, got some back last week and then came roaring ahead this week. And that's just on four days of trading. We didn't trade this morning. I had meetings so we couldn't live stream. I couldn't really trade. So no day trades for today. So that's Monday through Thursday. So very nice. Let's jump into the markets. So here's the S&P. I mean, just pretty massive update, up week, up almost every day, except for Wednesday, it was kind of a pause. But the big story here is, look at this implied volatility contraction. I mean, we went from basically 75 all the way down to 10 on the IV percentile. And so if you're wondering what happened to your red trades, which Tim Weiss is gonna address in his weekly update, or what happened to some of our, you know, double diagonals that we had on a couple of stocks or your double calendar and SPX, this is the culprit, my friends. Now, you know, if you look back at like, right after the election, we had a big contraction, but that's kind of a binary event. It was kind of expected, right? All the A, the market was going down, leading up to the election. Then after the election happens, A, the market rips higher, news about the vaccine comes out. And so you get a big push up. So you would expect an implied volatility contraction there. What we had here was really completely unexpected. And the bottom line is we never know when implied volatility is gonna expand or contract anyway, but massive contraction. So that did hurt some of our calendarized type trades and S&Ps that knew all-time highs once again. So I've been talking about, you know, this market after the election, I really felt like it was just gonna keep pumping, pumping, pumping new highs. It certainly has. And I, you know, in the short term at least, I still don't see any reason to believe that it won't continue. I mean, there's obviously a lot of issues out there in the world that could turn this thing on a dime, but I'm definitely not ready to load up on short delta. We've got plenty, we're still under one to one on our short delta versus our theta ratio. And I'm not looking to add any more at this point. We'll continue to keep our short delta plays. In fact, we will continue to, on little pullbacks, potentially get into some more diagonals and verticals to the long side, but not looking to load up on any bunkers or anything like that yet. So with that, let's jump into the alerts and talk about what we did this week, starting with the first, we had a long call diagonal in Amazon leading up to earnings. We were looking for an up move in Amazon in anticipation of earnings. Didn't get much, but we still booked a small profit on the trade. Actually, that previous week leading up to this, we had some downside. So we didn't get the upside that we were looking for, but still booked a profit on that Amazon long call diagonal. In BABA, we had an iron condor. And in this one, we just closed the remaining vertical spread right before earnings. They're getting ready to announce earnings. I didn't want to take the earnings risk. So we just closed that out. In Baidu, we also had an iron condor. We booked over 40% of max on this piece. It ended up being a losing trade because we had a couple of adjustments. We had one other iron condor that busted out of our range. We added this one. So this one was profitable, but our previous one as part of the trade was not. So we ended up net net taking a loss on that Baidu trade. Opening trade in Facebook. So this was a ratio double diagonal. I've been doing a couple of these lately. And really the basis is, after some of these stocks announced earnings, they still had a little bit elevated implied volatility in the front week. Unfortunately, like I just pointed out on the chart, the implied volatility got crushed and the back week options declined quicker than the front week, which is what caused some issues with these. So we ended up closing this one out and taking a loss on it. And that alert's coming up here. Bob along called diagonal. This was another one that we had kind of leading up to earnings. And so we were anticipating a little bit higher momentum into earnings, didn't get much, but we still booked a little scratch profit on the trade SPY vertigo. So we added a vertigo in SPY. So let's take a look at that. So here's what it is. Now price is hanging out right here, not much P&L we've obviously, since we've got this price has gone up a little bit. So we're near the upper break even. If we do get some continuation of the upside into next week, we'll be able to book a profit there. Now keep in mind, if we do see some downside, it's gonna get down into this valley here. If price goes down, we're also gonna get some implied volatility expansion. So that'll help. It might push this pink line, push the P&L up a little bit, but we would still probably take a loss unless it dropped dramatically down to this area. But if it drops back down into the center of this P&L line, we may take a loss, but I'm optimistic we could sell a book of profit if this thing continues higher. So that's our SPY vertigo. Let's see, next trade. Did a rolling adjusting trade in ZB. So I was really hoping to close out of the ZB trade this cycle and book a profit overall after adjustments, but prices kept going down, kept going down, came out of range. So we just were rolling, extending duration another time. So we went from 17 days to expiration out to 52. So let's take a look at ZB. Let's take a look at the charts first. I mean, look at this. I mean, we were pretty close. If we would have just gotten a little bit more of an up move, we probably would have just gotten out earlier with a nice profit, but this thing just really rolled over hard as the market went up, bonds went down. And so we are, let's take a look at it on the Analyze tab. You can see hanging out right here down at the lower end of this range. You know, if we look at just the call side, still got plenty of premium left in those calls. So we're not looking to make another adjustment at this point, but hopefully we can get a bounce into the next couple of weeks and get back to center. And then potentially book this one. So that is the plan in ZB. Amazon opening trade. So this was an earnings iron duck. So we opened this right before earnings. Had a max profit potential of 660 or a beak profit of 160. We, let's take a look at a chart. The price opened pretty flat after earnings is up a little bit. Even with Bezos stepping down as the CEO, although he's staying on as chairman, so he's not really going anywhere. But anyway, I just kind of dipped down a little bit. I thought we had a potential, we had a potential for a duckhead today if we just would have moved down in price just a little bit, but instead Amazon rallied. So we ended up booking beak profit a little less than 160 bucks on that trade. GOOG, we also did an earnings iron duck same day right before earnings. On this one we had a max profit of 615. Now, Google exploded after earnings. So if you take a look at GOOG, GOOG exploded after earnings. This is where the closed before earnings and this is the expected move after earnings. And you can see it opened above the expected move. So if we take a look at the duck, you can see it's way up the duck beak. Now don't pay attention to this because that's just the options are goofy as far as where that actual P&L is. But we'll end up booking 115 bucks beak profit on this, which is that's what the iron duck is all about. No risk to the upside, which is a great play for some of these tech stocks that just keep pumping up, up, up and away. Now keep in mind, I mean 115 bucks, that's not much. I mean, we only did two contracts on this trade. Think about it this way. If max risk on this trade was 1385, so 115 divided by 1385 equals, that's an 8% return in just a couple of days. So don't beak profits. We'd love to have more duck heads, but the most highest probability when you do an iron duck is that it's gonna hit the beak profit and you're still booking really good profits in those as you continue to do them. So the other thing I wanted to mention here is in Amazon, we ended up closing it out before the market closed because price was kind of in this area here, right? Somewhat close to between the long call and the short call. If price expires in this area, you will get assigned. Now here's the other thing to understand, and I had a couple of questions about this in the community and by email, is there's a YouTube video or something going around about somebody who had a short put vertical and market closed and it expired worthless. But keep in mind, the exchanges have up to 90 minutes after the market closes for exercise and assignment. So even if let's say price closed right here, if after the market closed for 90 minutes, if it comes back down to this area, you would get assigned. And then if it's the call side, you're gonna get assigned short stock. If it's the put side, you would get assigned long stock. So just keep that in mind. I mean, just be smart about that. Just understand the situation when it comes to these trades. I mean, this is so far up the beak that the chance of after the market closes of price coming all the way down and getting assigned right in here, remember if it goes in here, that's okay. It's just right in this little area here. And this is all explained in the iron.core. So go back and revisit that. I break it down and say, if price expires here, what happens? If price expires in between here, what happens? If price expires in here, what happens? Here and here. So we're way up the beak. We're gonna let it expire. And then so by the time you're seeing this video, this will have expired and we booked big profit. So I just wanted to revisit that, make sure you understand the situation. All right, next trade. We did, okay, so after Google announced earnings, they opened above the expected move. So just like we teach in the earnings course, if you have a stock that announces earnings and it opens above the expected move, there's a very good chance, a very high probability that that stock is going to either kind of stay steady or continue higher. And that's what we did in Google. We put on a post earnings short put vertical. You can buy an in the money call. You can sell puts. In this case, based on the price of Google, we did a put vertical, a short put vertical. And so what happened, they already closed it out and we booked over 40% of max profit in just a couple of days. But like I said, Google opened up above the expected move. Initially it pushed higher. We were close to actually getting out of it the same day, next day dropped down. And then today, just this little push up gave us the opportunity to book over 40% of max profit. Now I would imagine Google is going to continue to push higher. A lot of times it pushes higher than just the first day. So if this thing drops back, it may be an opportunity to get back in and try to ride this up again. But we are out of that trade for now. The other thing that worked in our favor with that short put vertical, obviously, is the continued contraction in implied volatility. So implied volatility continued to contract. That short put vertical is in a positive theta type arrangement. And so that's part of why just this little move allowed us to book a nice profit pretty quickly. So those are really high probability trades. Next trade, Microsoft had a ratio double diagonal in Microsoft, ended up closing that out, ended up booking a small profit even with that massive implied volatility contraction that I've been talking about that hurts those calendarized type trades. We were still able to eke out a little profit in Microsoft. I mean, look at this again, just like everything else. I mean, implied volatility just collapsed, but we were still able to scratch out a small profit on that one. So that's okay. eBay, another post earnings trade. So eBay's another one that opened above the expected move. Now, eBay, let's take a look at eBay. So eBay opened up up here. And when it came down just a little bit, we got in about right here. We just bought some calls. And if we're gonna buy calls like this that we're gonna hold for several days, we're gonna do it in the money, kind of 70, 80 delta. So there's very little theta decay involved. And then what happened is eBay just continued to come down. When it got down close to the expected move, we bought some more calls. And so we were just kind of averaging in because what happens a lot of times on these post earnings plays, sometimes they will open up and just take off. Sometimes they chop around and then obviously sometimes they come down. Now what happens, what you will see is you can look at like a previous price level like this or you can look at the expected move level. A lot of times it'll stop on that and then bounce. In this case, you know, saw it comes down. So I was looking at, okay, we got the expected move here. We got a kind of a price level right here. So in this range here was a good area to potentially buy. I think we added those additional calls like maybe in this area here. Anyway, we got a little bounce today. And so we are initial, our initial calls are here. So we're down on those about 360. Then we bought these, which are up about 170. So net net, looking at both of them together, we're still slightly down on the trade. But if we get a little bit of a continuation to the upside, I'd like to see price get up into that at least 64, possibly 65 range. If it gets to 65, I mean total we could book, you know, a thousand bucks or so on the trade. So that is the plan. And on these, you know, you really want to position size to a point where, you know, you're okay with taking max loss. I mean, 1890 for our portfolio, that'd be a sizable loss. But that's the plan. I mean, you know, don't position size too big because not every single one of these trades is gonna be a winner. They are super high probability but position size correctly. So I always get the question, when do we get out? You know, when's our exit point? If it's a losing trade, well, the exit point is, you know, we're willing to take full loss on this. So make sure you're position sizing correctly on those. Post earnings long call. So yeah, this is the opening adjusting trade. This is where we added some more. Facebook ratio double diagonal. That's when we closed. We ended up taking a loss on that one from that IV contraction. Rut, we did an iron duck in rut. Close this one out early. Price had run higher, booked beak profit on that one. SPX iron duck, same thing, price ran higher. So we just booked a beak profit. If you're way up the beak and there's very little chance of getting back to the duck head, we just close those out early. Book that beak profit, free up that capital, redeploy it into another high probability trade. SPX, weekly double calendar. Close this one out. I did take a small loss on this due to that massive applied volatility contraction but not too bad at all. And then we opened another SPX weekly double calendar. So let's take a look at that one. We still have that on. Oh, that's an iron duck. I'll get to this. So this is an iron duck that expires today. So remember, now I was talking about the position of price on iron ducks with Amazon and Google. In SPX, it's different. There are no shares of SPX. So even if price was right here on SPX, you could let it expire and you're gonna book whatever that profit is at expiration. Now here it's just in the beak. So we'll end up booking $135 assuming it kind of stays in this beak area. But with SPX, one of the reasons we like to trade rut and SPX and NDX is because they are index options. They're European style options. They settle to cash. So we'll just let that one expire. Again, all this is explained in the iron duck course. So if you haven't looked at it in a while, go back in review. Okay, onto the weekly double calendar. You can see more implied volatility contraction today. So we are down a little bit from the time that we put this on, but still well within range. And if we get some little bit of pop implied volatility, just a little, even just a little pop. We should be just fine on this one, but we will manage as needed. If we're still kind of in this range or even a little bit higher into next week, we may add another one on here. Kind of a new centered one around the current price, but we'll see what happens there. Natty gas. So we did a role in our Natty gas. I was hoping to potentially close out of this. We're down like 130 bucks or something. After all of our adjustments, after all of our roles, we battled through a massive move in Natty gas with a short strangle. And I was hoping to potentially get out, but we are down to 18 days expiration. Once we get under 21, we really want to either close or roll because that gamma starts to really pick up. So we went ahead and just rolled this out to the next expiration, give it another cycle, assuming we can stay in range here for the next cycle. Like I said, we're only about $150, $130, something like that away from being profitable. So obviously we've got a max profit here of over three grand. So if we can just get 25% of that or even a lot less, we should be able to book a profit. So that's the plan in Natty gas. And if we look at UNG, which is the natural gas ETF, the implied volatility is still pretty elevated in there. It's at 45 on the percentile. So I don't mind keeping this on, keeping the dream alive, get some, still some juicy premium, some juicy options in there. So that is the plan in Nat gas. Zoom. Okay, so this one isn't one we trade a lot, but let me show you what the rationale was behind Zoom. So I was looking for some of these big stocks that didn't have any earnings related timeframes involved and looking for situations where we had a front week where the implied volatility was higher than the back week. Now what's interesting is, and I didn't even know this till I'm recording here, but since I put this on, this implied volatility in the front week has contracted. So it's not even as high as it was in the back week, but it was when I put it on. So if we take a look at the analyze tab, you can see that's already taken a little bit of an effect. We're down slightly. We actually were up on this trade just a little bit ago. So that implied volatility started contracting in the back week too. So anyway, we are looking for about a 10% profit on this. I mean, if we get to the day before expiration, can book 100, 200 bucks. I mean, you know, assuming if implied volatility does continue to expand. One question I got in the community is, hey, you know, you put this on after implied volatility expanded today. And I would be concerned about that if this was an index, but with a stock like Zoom, this thing pushed up and implied volatility expanded. We've also got earnings on three one. So that's not included in the options that we're trading. So these are the options in the back week. These are the options in the front week. And then the earnings aren't until this cycle here. So we're going to be out of this next week, but even our back week options are not in the earnings cycle. And so, but even so obviously implied volatility can should continue to expand into earnings. And that's going to elevate these front week a little bit as well. Not just the, I mean, the cycle that the earnings are announced in those will expand the most, but, but we'll still get some elevation out of these as well. So, so we'll see what happens there. And lastly, Google, this is the one I already talked about. We had that post earning short put vertical booked over 40% of max profit on that one in just a few days. So let's go back to the platform, take a look at some of our other positions. One of our short delta positions is this long put vertical and ES. You can see it's just at a range. So we could use a little downside to get back into range there. Mentioned Natty Gas, mentioned Bond, Apple. Apple just outside of range as well. This is another long put vertical. So we need some downside in Apple to get back in, it's down a little bit today. John Deere, man, this one was, well, here's almost at 50% of max profit last week. And then this thing just came roaring back to the upside, along with the rest of the markets hitting new all time highs. But so we need some downside in John Deere. Another short delta play in DIA. DIA is not as strong. It hasn't even hit a new all time high yet. Pretty close today, but not quite there. So we'll take a look at DE again. A lot of these verticals are just outside the range. So we need a little bit of movement downside. Now these are all in FEB, which have 14 days to expiration. So if we get some movement down next week, we'll start to roll these out to March. I'd like to get some of them back in range if we get some downside and then we'll kind of collect our credit and roll some of these out to March. Regardless, we will, but hopefully we can do that as the market's moving down. eBay, I mentioned that one. GOOG, I mentioned IWM, another short vertical, short call vertical. I need some downside to get back in the range there. Same with QQQ, SMH, we've got this short strangle that we've been rolling for several cycles here. We're up over $1,000 on this since we did our last roll. So it's continuing to work well. That implied volatility on this really helped. I mean, you see that big IV contraction, not too much of a price movement and so doing well for that SMH trade. And that's something to keep in mind. I mean, that's one of the reasons that we like to do a lot of different strategies. Some strategies, iron condors, butterflies, short strangles, they all really, they benefit from this implied volatility contraction. So we like to put those on when implied volatility is high and you benefit from that contraction. Whereas the calendarized spreads, they benefit a little bit more from implied volatility expansion. So you never know when those things are gonna happen and that's why it just makes a lot of sense to enter these trades at different points, different price points, different time frames and benefit from both directions and kind of have a balanced portfolio that way. SPX I mentioned, SPY I mentioned, XLK, another one of our verticals. I need some downside to get back into range there and then I already mentioned Zoom. So those are all the alerts. Those are all the positions. Everybody have a fantastic weekend. Go root on the Kansas City Chiefs. Run it back for our back to back Super Bowl wins. Cheers, everybody. Have a good weekend. Bye.