 All right, welcome everybody, my name is Spencer Regal. This is Dharma Capital Trading and today we're gonna talk about profit give back. So first, before we kind of hop into this, let's talk about disclosures. All information and presentations are for educational purposes only and should not be considered specific investment advice. All trading within cryptocurrency, futures options, forex should be with risk capital. Don't use money that you're not willing to lose. My name is Spencer Regal, as I mentioned previously. I'm chief option strategist here at Dharma Capital Trading. Our website is darmacapital.trade. You can find us on x at darmacap.trading and YouTube darmacapital.trading. Our mission is, it's pretty simple. So what we're trying to do here is create a positive impact and help traders achieve their full potential. So what we're doing here is we're empowering traders with fact-based solutions that enhance self-awareness and decision-making. Our approach enables traders to execute trades confidently and effectively by facilitating a state of flow. So, I mean, the market's been incredibly active over the last seven days. I figured today would be a really good reason and excuse to talk about profit give back, right? And so I guess in terms of the agenda, what are we gonna cover today? We're gonna talk about profit give back. We're gonna talk about outlook and then we're also gonna talk about option strategies, right? So from peak to trough here, we traded, what? We traded 7,300 over the weekend and some of the BTC perps. ETH market traded a little bit over the 4,000 mark in Derbitt perps. And so it's great to mitigate risk, right? But how do we manage a trade that's in profit, right? Especially after a large move, right? How do we optimize these moves? How do we think about, all right, if we have some positions on a little bit further dated, what are we doing in terms of risk? So that's broadly what today is about. We do have the FOMC up in 45 minutes. So I'm gonna run through here because everybody's gonna be actively trading, I'm assuming. So to break it down for you. Everything here that we're doing at Dahmer Capital Trading is fact-based trading, right? So we're looking to define the facts and trading involves making decisions based on objective data analysis, reducing speculation in subjective biases, right? What's happening now? What are the facts? Where's our risk? And what are we doing about it, right? And that's kind of our goal, right? That's how we maximize gains, minimize losses. And that's, at the end of the day, that's what we're looking to do. So in terms of profit give back, there's three steps in which we're gonna wanna look at, right? One is step one is we're gonna want to align outlook with context, right? And so that's gonna be predominantly on the playbook, right? So what are the expectations of the day and what are we doing about it? The next is understanding our risk levels, right? And that's all in price map. The third piece is defining exits based on risk, right? And we'll kind of dive into how we're doing that. Largely, we're gonna think about it in terms of standardization, but then also on a microstructure basis, using book map, using the order book to execute and make those in the moment decisions, right? So step one, identify context or identify the context of the playbook, right? So know the state and its characteristics. Know the structure and its bias. Know the optimal hedge strategy themes. And the large question here that we need to ask is does outlook align with context? And so we've kind of gone over this in the last few weeks, but it continues to be incredibly important within each strategy that we're looking to employ. Step two is understanding risk levels, right? So price map is a beautiful tool and it allows us to visualize where our risk is, right? And we'll pull that up today and go through some of those risk levels and understand as we go into that FOMC how you could think about it, we'll pull up a portfolio to go through some live examples as well. So to kind of make everything clear, it's identify price action is performing to the characteristics of the state. Observe price action within the price map framework. Is it holding structure as a large question, right? Identify the strategy theme that is in play and then the last question that we need to ask ourselves is continually does the outline align with structure, right? And as we get to the third piece of profit give back, right? Third step, we need to define the exits based on our risk. The best question to do this is when we're putting on a trade, it's always based on risk reward. When we're taking off a trade, it should still be based on risk reward. Does the risk match the reward for the position? If the expectation is the market's gonna rally based on price map and the playbook, and we see buyers coming into the market within book map, do some of those out-of-the-money calls that we wrote pre-sell, still makes sense in terms of a risk. Maybe yes, maybe no, we'll take a look at that. So next is let's hop over here and go through an outlook and let me see if I can share the screen. So I'll drop this screen and I'll hop over here and share this one because we have had a wild, wild seven days. All right, and to clarify, all right, perfect. And so what you're looking at here is you're looking at the price map of Ethereum. So this is based on Ethereum Derabit Perpetual Market and this is left to right on your screen is monthly, weekly, daily, right? And so breaking down the monthly, what have we done, right? And so we traded up to that upper target, level two on the monthly, which was the expectation after a breakout over the upper target one. So we obtained that target and then we failed, right? And so what have we done? We traded all the way back down to the monthly directional. The note here is the expectation is the directional should hold if the market wants to stay positive, right? And so it's not a coincidence that we've been trading directly off of this 3141 figure throughout the last 36 hours testing that level, right? And so as we go into the FOMC, a break over the CR plus monthly upper alert distance which is in alignment with this UP here on the daily triggers an expectation of a test of this 3494 monthly UP level, right? And that's right in alignment here with the upper target one on the daily, right? And so if we trade higher here, the expectation is we're gonna trade around that 3,500 level after the FOMC, right? And so any structural break under the directional here puts the market at risk and we could really fall apart here, right? With those levels being the weekly R level, right? Being here at 2925, yeah, sorry, 2925 apologies. And so those are kind of levels that we're looking at broadly. A break over the 3494 upper alert distance which is right in here will trigger a trade. Potentially the first target here is 3632 and then a full extension here back to that 3,800 level at 3771, right? And so I guess as we're thinking about profit give back and as we're thinking about where the market is, we have a binary event coming up, right? Let's talk about the binary event and let's talk about market consensus and kind of what is often used in markets to make a decision, right? And so the FOMC is the Federal Reserve's interest rate decision that's gonna be coming out in what is that, 43 minutes, 2PM Eastern and the expectation broadly in the market is there's going to be no rate change, right? Why does that matter? Well, if we come out and we see there's gonna be a rate decrease, that's likely seem to be a positive impact to risk assets. Ethereum in itself is a risk asset, right? And so if the expectation from the market is, hey, they're not gonna raise rates and it comes out as not raising rates, then the next piece here is looking at the presser and the presser starts at 2.30, it carries on and everybody is gonna be listening to the tone of Jay Powell. And so why does that matter to us? Well, we're thinking in terms of risk, right? That matters because that can just be used to make decisions in the market. And so if it's used to buy the market, where are the levels that it's gonna go? Well, we've already defined those levels as the 3494 as the first target over these recent morning highs, right? In this level, and then if it really wants to really get after it, then it could test those 36 and then up the ladder into that 3771 for the extension. The expectation of the market after the large break in structure is that the containment level of the market throughout the March duration is going to be at this upper target too, right? And so let's stop sharing this and then I'll hop over and share why that matters when we're thinking about building out a portfolio and risk management, right? And so I will share the screen here and this is, we can just build out a portfolio here. So let's put some positions on that potentially could have been traded, could have not been traded and we'll just kind of mark it up. So let's say we sold 100th of the 4000 calls, March 29th, right? Well, those will be priced based on our current market but let's say we're in profit on those, right? So let's bump these up a bit and to do that, let's see where they traded in the past. All right, so we can pull up the recent trades here and this is Greeks Live, this is just up front end that helps with understanding where these have traded. So to understand where they've traded, we got to go back a few days, right? So 318, these traded, let's say we got a fill here at 5770, right? This is all hypothetical in terms of looking at portfolios and how we manage that risk. So let me beef these up a bit. So our average price, let's say is a five, we're gonna have to push that up, not that high. That's, I mean, that's close enough, that's a better fill but now we need to think about it, right? And so prices right here and those are trading, those are trading in the market currently on the offer at 16 bucks, right? So we're up on these roughly around, roughly around 50 bucks or 49 bucks in profit on realized, right? So we know we have this event coming up. We know our levels that we're worried about. Let's go out here and think about, all right, well, what do we wanna do here? Do we wanna collect all that premium? Do we wanna backstop the risk? It's, we know that the upper containment level of the market is in that 40, 47 level. How do we wanna play it, right? So there's a lot of different ways that we can play this. One is we can just cover this risk, right? We can collect our 49 bucks, move on, wait for the event to happen and readjust, right? That's great, but there's potentially other ways that we can backstop it and collect a little bit more, or premium, right? And so one thing that we could do is we could come out here and we could backstop it with some 4,300 calls, right? The reason I pick 4,300 is we'd give up about half of that premium that we're looking to capture here, but we're not naked in risk, right? If the market really wants to explode and trade over that 4,300 level, the expectation is a move to 4,500 around there, 4,447 as the expectation. And so how do we do that? Well, we just come in here and we box some of that risk up and we backstop that risk, right? The reason this is interesting is not only if you have one position, but we could come out here and just turn this into a call spread, essentially. And so what that does is that keeps that risk defined and instead of infinite risk all the way down, if we trade to 5,500 ETH, we can come in here and offset that risk and our maximum drawdown is right at that 4,300 call that we're buying, right? And the reason this is interesting is, okay, one position's great, right? But let's imagine that you have a ton of positions on that are in profit, right? How do we hedge that? So not the 39,50 puts. Let's say you've been working some trades around those highs and we'll bump these up as well, right? And then we'll come out here and add a 42 in here and you've just been working those highs and you wound up killing the trade doing very well. Now you're looking for the best way to get out of these. And so currently in this portfolio, you have around negative 300 risk that's unhedged, right? And that's great. You stand to make a decent amount of money if the market doesn't move much. But if we are concerned about some of this risk, I have to bump these up here. These are the wrong price. If you are concerned about some of that risk and hedging into an event, how would you do it? And so with those sold calls, obviously your trade starts to lose money over that 4,000 that you wrote and continues to lose more and more as we trade higher based on the more negative exposure at 4,200, negative exposure at 4,500, great, okay. So there's a couple of things that we can do. One is if you wrote these at 81, you wrote these at 65, and then you wrote these at 65, arguably your average is a little bit less you're in like maybe the 75 range, right? So you can say, all right, if most of this stuff is trading around the $4 level, right? This one, the 4,500s, we come out here. Those are trading $5 on the offer. The 4,200s are $9 on the offer. The 4,000s are 15 on the offer. How do we wanna hedge this, right? Well, with the 4,200s and the 4,500s, there's a couple of things that we can do. We know that 4,200s here are nine. If we wanna come in here, we can pay up and collect that spread here. And so we can come in and buy the 4,400s to backstop that risk, right? And this is kind of the easiest way to match the risk, but then there's another way that's a lot of fun as well. To think about when we're on profit. So let's say, all right, we come in there, we hedge up those 4,200s that we wrote, we make that a call spread. And then the 42, or the 45s are at risk. So let's come out here and let's see where we can lay off some of that risk. We can come out here into the 48s and basically pay up to four bucks on these or the 47s. Let's do the 47s, just to keep it a little bit closer. We come into the 47s, we can buy some of that. And then the 40, we're still short to 100 at the 4,000s. While where do we want to lay off some of that risk? We already mentioned we want to lay that off in the 4,300s to collect that premium. So let me see here, right? So here in this situation, we are defining our risk, right, our risk will not cap out or will not expand further to the downside if all of a sudden we get a blowout move to 8,000. I know it seems incredibly unlikely. However, this is crypto, we do move 15% in four days. We do move 20% in one day. And so this is an interesting way to think about hedging up some of that risk. There's a little bit more of an interesting way as well that I think is a little bit more favorable when we're looking at a position like this. So back to our original position, we're short 4,000s, 4,200s and then 4,500s. We have 300 at risk. Our average is roughly around 75. We're just spitballing there because we have 65, 65 and 81, it might be more like a 72. If I'm looking at this portfolio, I'm saying, okay, great. We've made most of the move, right? Most of these contracts, the 4,000s are trading at 16 bucks. The, everything else is trading much lower, right? We're sellers really high. We've collected at least 90% of that premium, right? So when I think about this and thinking about kind of the PowerPoint, does the risk reward make sense to have that exposure on the books anymore? My thought is probably not, right? And the reason for that is, all right, we get a trade. We've collected 90% of these premiums we put on this hedge and we're still at risk of taking a 60, almost $69,000 loss. That doesn't make sense when we're in profit almost 90% of those positions, right? So one thing that I like to think about is, okay, how can we turn this into a credit, right? And what's the cost of, or turn this into somewhat of a debit spread for free, right? And so, knowing that we've collected, let's say we've collected a majority of this, so I can pull up a calculator here to do the math. And let me see, on the, on the 4,000s, if we're right in 65 and we're covering at 16, that means we've collected 49. And so let's just do a tally of what our whole cover would be here. So we would have to pay 16 for 100. We would have to pay, we would come out here and wear these 42 trading around 10 bucks. So we'd have to pay 10 for that, right? And these 45s, these are gonna be trading. Let's say we get a five and a half fill there, right? So let's do 5.5. So that's 31 and a half we pay, right? And I'm not sharing the calculator, but I'm doing the math here on the side for everybody. So 31 and a half we pay and 60, I'm gonna do the math on what we wrote. So 65 plus that 81 to six, plus another 65, that's 211. So we're paying out of pocket for that cover 35. We've already collected, or the full right is 211. That means the premium that we have unrealized so far is our positions up 176 and a quarter roughly in premium collected. So the way I think about this is, okay, let's say we have 10 days left, what are these? These are eight days left on these contracts, eight days and a half. What can I come out into the market by 300 and turn this into a benefit if the market were to rally to these levels, right? So I'm coming out here into the 4,000s. I'm looking at these 4,100s, right? And the reason for that is if we come in here and we buy the 4,100s, the cost on these will buy the full 300 lot. The cost on these is roughly around, roughly around 1138. We might get a fill a little bit over that. So let me bump that up a bit for us. 12 bucks, and now we get this interesting payout, right? And so this means our only risk is from 4,000 to 4,100 at expiration, we've knocked that risk down from 69,000 unrealized or realized to 10,000, right? And if we're working with a position that's a 300 lot Ethereum, that's relatively small because 300 lots in Ethereum at current trading price of 330, 3,300, it's around 1% loss, right? And so you can play around and knock these down a lot. But this is one strategy that I like to look at when I'm looking at risk and saying, okay, we can backstop some of this or because we've already made a lot on these writes, let's put some of that back to work and turn this into some free lotto calls, essentially. And so you can even do this and match it a little bit lower. So if we were to do that, and I'm gonna grab some water real quick. So let's say we were to step in and match this, this risk up a little bit in the 40, or 40, 50s, right? Let's see if that even works for us. All right, yeah. And so what we're doing here is we can even do that and bring this risk in a little bit further. And so there's a lot of ways to play this and you get this exposure to the upside if all of a sudden, hey, the bull market, J-Powell comes out and the bull market is in full effect again and we're looking to break out to new highs, that's how we're gonna trade, right? And so I guess the next piece here is looking at how you're gonna execute that, right? And so let me stop sharing this and then hop over and share this again, right? And so the price map helps define the levels. Bookmap will help understand where those buyers are at in the market, right? And so at the directional here, we know we wanna do something, right? We traded right down to the figure of the monthly directional, 3141, printed and immediately we bounced, right? And we're going to test this higher level here at the 3317.95, we're trading above it, which is positive if we trade a little bit over here and retest potentially we could trade up to this 34.94, right? And so when executing some of these strategies, the best way to do it is to look into bookmap and understand where are those buyers and where is that liquidity stacked in the book and does it align with this structure? If it does, then you know that signal is going to be quite superior than maybe some liquidity that's stacked down here at the DP and there's nobody stepping into the market here. And so that's gonna help with microstructure execution, helps with everything in terms of just overall execution in the moment, right? And so I'm gonna stop sharing this, hop back over to the PowerPoint, see what else we have here, right? So here is, here's back to the PowerPoint. So in terms of profit give back, what we just kind of did and went through that exercise is we have a position that's doing well, right? We have a large unrealized gain. How do we take advantage of that? How do we morph it? How do we think about it in terms of risk management? How do we think about it in terms of risk reward, right? And so to do that managing positions in profit, it's one of the hardest things to do because anybody can take a loss quickly, can you manage that unrealized gain and optimize it, right? And so to do that, we need to standardize entry and trade selection, right? A lot of that's to do with price map, right? What's the expectation in the playbook? To find the exits based on risk reward, does that directional lineup with liquidity that's stacked in the book map, right? That's how we know how to execute on a very micro level. But also thinking about it in terms of, we wrote a call at 65 or let's say at 72 on the average, those are trading all the way down to maybe $8 average. Do we want that risk on the book still? Knowing that at any point in time, this market can come all the way back and those unrealized gains that could be quite substantial could immediately turn into a headache and potentially even max losses, right? In the world of trading, we don't want to leave it up to chance in that regard, right? So we're always positioning, always adjusting. And then the last piece here is execution, right? So utilizing the order books for microstructure, understanding in the moment where those buyers are stepping into the market, where those sellers are stepping in the market, which helps enhance the overall view and enhance the price map and playbook strategies as well. So here at Dahmer Capital Trading, everything we're doing is fact focus, right? So are we trading above the directional? Then we look to test that CR plus in the monthly. If we're trading above the CR plus in the monthly, then we look to test that 34.94 level in the monthly UP that we were just chatting about in Ethereum. And what does that mean in terms of risk, right? It's not about, hey, we think this is gonna happen. It's what is happening now. And so if you have any questions, feel free to reach out to us at infoatdahmercapital.trade. Our method is simple. It incorporates a statistical outside view which helps slow down the decision-making process and minimize biases, right? Here's a quote from Thinking Fast and Slow. We're gonna always chat about this one. The outside view offers more accurate predictions than the inside view, right? So breaking everything down from a monthly, weekly, daily, understanding what's happening now, getting into the book map, understanding where the live buyers and sellers are in that order book, and then making the decision based on risk, reward and what makes sense, right? So at the end of the day, what we're doing is trade with clarity, right? So if you have any questions, feel free to visit us at DahmerCapital.trade. We are on X slash Twitter at DahmerCap Trading, YouTube DahmerCapital Trading. Feel free to follow our sub-stack, DahmerCapital Trading. And then any questions, you can reach out to infoatdahmercapital.trade or you can reach out to myself. My name is Spencer Regal. I do the, I help, yeah, so sorry. I help with options strategy and options, everything options within DahmerCapital Trading. So feel free to reach out to my email at Spencer at DahmerCapital.trade or follow me on Twitter at underscore Regal. Thanks for stopping by and good luck in the FOMC. I'm gonna cut it off 20 minutes early so everybody can get ready and then think about those levels and then think about risk management broadly. So thanks for stopping by.