 What's up navigation traders happy Friday January 11th welcome to this week's video update Hope everybody had a great week of trading Before we jump into the alerts. Let's take a look at this week's who got caught being hot in our community Every week we'd like to recognize somebody for helping other traders and this week goes to our friend Serenny V So thank you Serenny great contributions if you haven't been in the community this week Make sure you jump in there. We talked had a good string going about risk management Serenny also posted some answers to other traders questions along with some other very helpful posts along with Asking some really good questions that everybody else kind of jumped in on so good stuff That's what this community is all about continues to grow and get more and more engagement from you all our members And that's what I was hoping would happen So congrats Serenny and everybody else keep up the good work All right, let's jump into the alerts for this week a little bit lighter week of trading As far as the number of alerts go, which is not always a bad thing. Let's start with January 7th, so our first trade was an opening trade We opened an iron condor an EEM in this case. We tightened up our short strike So we sold a little bit closer to the money as opposed our traditional 20 Delta And the reason is it's because EEM is such a low-price symbol in the in the in the high 30s And so you can't really do a wide iron condor. You got to tighten that up a little bit And so the other option would have been to do undefined risk with a short strangle We've got quite a few undefined risk positions on so I like to mix in Some defined risk as well like to have both just diversifying our strategies. So here is our EEM iron condor, you can see it's a little bit tighter. It's not quite an iron fly. It's not quite a butterfly But it is tighter than our traditional iron condor You can see we've got a little bit of profit here in this trade But not quite enough to take off yet. So we're just in a holding pattern on EEM Next trade was SPY So we had an iron condor price came through to the downside breached our downside break even so we closed out our Untested side and then price rallied all the way back into range And so then we closed our remaining short put vertical booked over 40% of our initial credit on that January Iron condor and then we were still hold holding our full IC in Feb got a couple other trades in SPY so I'll go to the platform here in just a second Our next trade was a closing adjusting trade in IWM So pretty similar situation where we had an iron condor price came down breached our downside break even we closed out The untested side still had this remaining put vertical on when price rallied back up We went ahead and closed that one out and then in this case We're still holding our full iron condor in Feb So let's go to IWM and Here's that one. So you can see price is kind of hanging out in the upper end of our range Still still within range So we haven't made any adjustments on this one yet if price continues higher We will close out the untested side if it bounces back obviously we'll wait to get the required profit before we close that out Next trade was an opening adjusting trade in SPY. So this is where we just added another full SPY in Feb and And so let's go ahead and then the next trade here also is in SPY So this is a closing adjusting trade where we closed our put vertical side of our other iron condor Because price had breached the upside break even so let's go that the platform tie all the SPY trades together So we closed out our January one I mentioned that that was our first alert and then our second SPY alert was adding this new iron condor So when we added this we had two full iron condors one was kind of over here And then we did another one kind of centered around price We skewed this a little bit so we have more downside gave us a little bit of short Delta But still fairly centered just a little tiny bit of a skew So that's where that one is. It's still pretty centered here and then and then we on the other iron condor price had come up and breached our Upside break even so we closed out the untested side And so now we're just holding this short call vertical and this does a couple things that keeps that short Delta on here But so we're just waiting for some downside to get back into range Hopefully and then hopefully we can book profits on both of these pieces If this if price continues higher We may roll this piece just to keep that short Delta kind of like we've done on some of our other iron condors Obviously if it comes back into range will will most likely close that But we will deal with that when the time comes still got a lot of time in Feb Feb is how many days 35 days to expiration in Feb, so still a lot of time to work that trade Next trade was a rolling adjusting trade in EWZ So we had a short strangle on an EWZ price breached our upside a short strike So we just simply rolled our untested side up. So we just rolled our puts up from 34 up to 41 so now we have the 41 puts and the 42 calls if we go to EWZ on the platform and Take a look. That's what it looks like now. So we just simply rolled our puts up From 34 was down here. We rolled that up to 41 where you can see right here So just playing the waiting game now most likely what we'll do is wait till we get down to closer to that 21 days to expiration And then we'll probably roll out to March if price makes a significant move out of our range here in implied volatility stays high I should say pops higher Well, we would add to this but with implied volatility as low as it's gotten We'll just continue to roll, but we probably wouldn't add to this unless implied volatility pops back up So that's where we are in EWZ Next trade was a closing adjusting trade in IYR. So we closed out our iron condor in IYR With 37 days booked 40 almost 40% of max profit on this trade And then at this point we were still holding our short put vertical side from the January cycle Now we did have a an alert Today, let me just jump to that. That was our last alert this week this morning on Friday Where we had that remaining short put vertical from that Jan iron condor. We went ahead and close that out There's only seven days to expiration. We could have held over the weekend But if there had been a sharp move lower, it could have wiped away our profits So we went ahead and close that out. We're completely out of IYR booked a decent profit on That one. I think it was a couple hundred bucks $273 so we are out of IYR and Then the other trade make sure here. Yeah, the only other trade here then was also this morning This was an opening trade in Costco Don't have any upcoming earnings in the very nearest future and we're just looking for a place to add some short Delta and Costco looks like a decent option We did this in Feb with 35 days left and we just simply sold a short call vertical to add some short Delta exposure If we go to Costco and take a look here had this massive move down after after their last earnings announcement, which is in mid mid December and It continued to fall and then it's and then it's bounced back up. So We're just looking at this as a possible decent entry point We hope and and hopefully that roll price kind of rolls back over get a little bit of a continuation to the downside And that would benefit our short call vertical Okay, so that's where we are in Costco. So those are those were all the alerts for the week Let's take a look at some of the other positions starting with 6b the British pound We've got a short strangle on here and you can see prices still well within our range here Just waiting for some more time to pass and some more Theta to decay Oil our good friend oil has bounced back. It's down a little bit today But nice rally over the last couple weeks in oil, which is exactly what we needed So we've got two pieces on here. We've got the 53 call the 63 and a half put We've got this inverted strangle now If you take a look here, we're up since we did this roll. We're up $4,000 on this piece Out of a possible 71 20 so we're over 50% of max profit at on this piece as it stands Okay, so we at some point here in the near future We're gonna want to lock that in and just extend duration and roll out to the next cycle Now in oil in this cycle, there's 34 days left to expiration So a lot of time so we're not even close to that 21 days But what I what I what I want to do Because we have two different pieces here and just to diversify that time and to go ahead and lock that in because we've gained so much back is We might look to roll this out to to the next expiration cycle Which in this case would be April with 63 days right now I'd like to wait till that gets under 60 to stay in our wheelhouse of that 30 to 60 days And so next week we will be at that point so look for us to potentially roll one of these pieces in our oil trade out to april with when it gets under that 60 days or right at that 60 days to expiration Or we may do it if it has 61 that's okay too So what we'll end up doing is it'll be this one here. So we've got two pieces We've got this one, which is a 53 call 63 and a half put And if we just roll that in it'll stay inverted But what I'll probably do is I'll probably lower That put from 63 and a half down to maybe 58 or somewhere in there Now keep in mind and this isn't something that I have in the course because this happens very infrequently But if we roll this and we move down Our put to get a little bit less inverted to to lessen our inversion if you want to call it that Um When we buy back this Strangle and we resell another one. Let me let me just show you what I mean I'm going to do another whole video on this because this is a little bit Complex, it's a little bit confusing if you haven't ever done it But if we take a look at just this piece here, okay Just the 53 call 63 and a half put if we bought that back today If I can get this to work Uh Hang on a second here. I don't I don't know why it's highlighting everything right now For some reason I can't get it to just highlight Well I'm going to just create the closing order of the 53 call in the 63 and a half put Uh 53 call 63 and a half put. Yeah, that'd be this one here. Okay So if we buy this back right now, we're buying it back for 13 57, okay Now so remember that number 13 57 Now if we go out to april in the next cycle And we were to just roll and resell this out here at the same strikes 53 call 63 and a half put You see we're going to sell that for 14 59 So our net credit is going to be the difference between what we bought it back for and what we sold it for So if we use the same strikes, we would get a credit, right? Which is what we want on a roll. We look we like to get credit However, if we and the max profit on that would be 4090. Okay, so remember that If we were to lower that put down Let's just lower it down to like the 58 just to get an idea Look what that does to our credit. We get a lower credit. Okay So essentially we're buying that back for 13 57 or whatever it was And when then we're reselling this one for 10, that's a net debit, right? So that we don't like that. But but look what this does is it raises our max profit And it also increases our theta and it lessens our delta Okay So don't be surprised next week once once I do this and I'll be looking at where everything is at that point But I'm just trying to give you a little bit of a heads up that we may Uh lessen the inversion by keep by bringing our puts down lower It's not gonna give it. It's gonna give us a net debit on the roll But it's going to increase our theta Lessen our deltas our delta our directional exposure. So it won't make us as long oil It'll neutralize our delta and it'll give us a higher max profit On that piece of the trade. Okay, so hopefully that wasn't too confusing I'm gonna do a whole another video on this when I actually do that next week So look for that but as it stands right now Oil's been good to us this last couple weeks has moved up Made back a bunch of profit. We still got some work to do Oil still owes us some money, but that's where we're at on that piece And then let me uncheck this so I can show you the other piece So let's just look at the 54 call 56 put and similar thing I mean prices come all the way back up gotten us back some profit there And so what we'll probably do is we'll probably leave this one until we get closer to the 21 days to expiration We'll go ahead and roll this the 53 call 63 and a half put Out to the next cycle to kind of help diversify that time frame And then we'll just continue to manage those as Necessary. Okay, so hopefully that helps. By the way, I want to give you a quick update too So The oil and that gas situation right we had this huge down move in oil very painful We're still down on the trade, but we're making our way back We had this huge crazy move up And down in that gas and so we were down significantly on that We're still down a little bit on our net gas trade But think about this, okay This happened in october right beginning of november october is when this kind of massive move started And and so it it definitely significantly dropped our over our overall profits for the year But guess what? We're we've already made back all that money Now we still have work to do in that gas and we still have work to do in oil So we haven't made back our money specifically in those symbols But because we kept our position size small enough to continue to add and manage and And and work the rest of our portfolio We've gotten back all that money The peak of our portfolio was a little over $96,000 in october of 2018 And now our accounts back to $96,000 So, you know, we one of the discussions that we had in the community was Was yeah, you know, what about these big moves, especially in the futures because they're bigger contracts Uh, you know, how do you mitigate or minimize that risk from these huge one directional moves? Well, you can never And completely get rid of risk, right where traders we have to accept risk And the biggest risk with this type of trading Is those extended one directional moves because they bust out of our range And that's when we have to adjust and and and roll and do the other mechanical things that we teach But think about that it's it's only been a couple months And after those huge dramatic moves and we had two contracts in Nat gas We had two contracts in oil, which in hindsight looking back that was probably more than we should have We should have had just one contract in each because they are such big contracts But guys two months later, we've already made back all that money Okay, and then if you know assuming Nat gas and and oil still, you know, continue to Stabilize their pricing. I mean, we'll make it back all the money in those symbols specifically But the ability that we had because we stayed small enough to continue to manage all these other positions Open positions closed positions adjust as necessary. We've already made all that money back so Anyway, so that was a little bit of a rant But I just wanted to make sure you understand how powerful this is Because if you just have a diversified group of of symbols If you diversify your strategy if you diversify your time in the in the trade If you keep your position size small, that is the key I can't stress that enough the only thing that would have Really hurt us on those positions if we would have been too big So that we couldn't do everything else that we were doing and because we stayed small enough To still continue to do that. We've already made back all those losses that we saw Um in in november and december so Anyway, I hope that's helpful Because I can't stress that enough that staying small is the key to this type of trading Remember, we're using options options are leveraged So you have to stay small enough and you have to stay small enough in the individual symbols And you have to keep that cash available in your account to be able to do all those other trades around those other Around those positions as well. So That is where we are overall. Um, and by the way, as far as our Short delta to theta ratio goes we're over one to one. We're about one and a half to one with short delta to theta So that's good. We're in a great position there. We've got A lot of different diversified symbols Here we've got exposure in the in the british pound and oil S&Ps Nat gas bonds wheat individual stocks. We've got the dow. We've got emerging markets. We've got mexico We've got brazil china small cap another stock lulu The cues which is nasdaq mostly technology. We've got semiconductors s&p We've got technology utilities health care retail, you know, so we've just got an awesome mix of symbols different strategies different symbols different time frames And that is the name of the game and that helps minimize That risk again, you cannot eliminate risk in trading, but you can minimize it by doing exactly what we're teaching so All right, enough of that rant. Let's move on to bonds. We've got a adjusted short strangle in bonds Where you can see the price is still fairly centered there We still need back some more to get back to even on this one We've got plenty of time in bonds If we take a look here for some reason my internet just went out for a minute Storming a little bit here. So Anyway, we we've got plenty of time left in these options Excuse me before we roll So we'll continue to manage that one Wheat we've got this iron condor very centered here not quite enough profit to take off By the time this gets to 40 50 percent of max profit We will be profitable overall in our wheat position In apple We've got a long put vertical and just looking for some downside here We've got this on for that short delta exposure Price has kind of breached moved out of our range, but we've got plenty of time in feb 35 days Hopefully price can turn around and roll back into our range I mentioned Costco DIA We've still got two sets of short call verticals. Both of those are in feb One is still within our range here. The other has busted out a little bit with the up movement In stocks that we've seen so just looking for some downside to get that back into range Uh, we'll continue to hold these for that short delta exposure that we need. So that's where we are in DIA I mentioned EEM EWW we've got this adjusted strangle here price is hanging out right here on this hash mark On the upper end of the range if uh, let's see where implied volatility is on EWW And it's not showing up right now. So it's it's still fairly high And so what we'll do is if price moves higher, we will add another centered strangle in EWW And if you know next week will be under that 60 days to expiration in march So we would do that in the next expiration cycle again just diversifying that time EWZ I mentioned that one FXI we've got this uh put butterfly on and we've got enough to we could book this profit I'm going to give it a little bit more time. I'd like to add another one out in march as well We are down in our FXI trade overall, but uh in good shape on this one fairly centered got some good profit there IWM I mentioned that one J&J. So we've got a short call vertical here that we put on for some short delta exposure You can see we've got a little bit of profit here just looking for some more downside to benefit that Uh, J&J has earnings coming up on the 22nd So we'd prefer to be out of this trade before then So we'll look to close this out here the next 10 to 12 days Lulu we've got a short call vertical on here I considered closing this one because it's gonna you know, the probabilities of it getting back to Back to range are starting to get a little bit slim however We had a nice down day yesterday And then it's just kind of hanging out here. So if we can get another push lower, we might close out of this Or if it rips higher, we may close out too. So We're getting to a point where we need to get out of this one. It's in january. So it expires next week So we'll either roll or close next week if we want if we really want to keep the short delta We may roll to keep the dream alive Or we may just close it out take the loss and look elsewhere for short delta Which is the most likely thing that we'll probably do depending on where everything is QQQ is very similar to DIA. We've got one set of short call verticals where price is Broken out of its range to the upside. So we need some downside to get back in And then we've got the other piece of that. Let me reset this So that's that one the other piece very similar to DIA. It's kind of hanging out near the breakeven point So just looking for some more downside to get back into range there SMH our semiconductor. We've got this adjusted strangle, which is now a an 85 strike straddle Hanging out near the upper end of the range Very similar to what we were talking about in EWW Next week we could potentially look to add another centered strangle on this collect some more credit Add another piece diversifier time frame Or obviously if price moves sharply lower, we'll be in good shape here But we'll see what happens next week and do what's necessary in SMH SPY I already mentioned XLK This is another long put vertical that we had originally put on for short delta And so just looking for some downside to get back into range here XLU, which is the utility ETF We've got another one of these tight iron condors almost like an iron butterfly And we are almost close to a point of taking off profits here, but we want a little bit more in XLU XLV we've got this short call vertical on again that we put on for short delta exposure And so just looking for some more downside before we do anything in XLV And XRT we've got this adjusted strangle here Where we are looking for some more profit But again, we will you know if it moves higher we may add to that Or if it comes down, we'll just continue to collect that theta until we get back to profits We're almost back to profitability in XRT. So just waiting for a little bit more there So that's where we're at. Those are all the alerts and those are all the positions Everybody have a great weekend and we'll catch you next week