 What's up navigation traders happy Friday today's Friday April 5th. Welcome to this week's video update exclusively for Pro members Let's let's jump into the community real quick and talk about who got caught being hot this week This week's winner goes to Federico Lombardo. Congrats Federico. You got caught being hot Federico jumped in answered some traders questions posted some good things asked some great questions as well We like to recognize one member of the tradehacker community every week for helping other traders That's what it's all about So congrats and we sent you a private link Federico to pick up some tradehacker swag. So enjoy that And let's jump into the alerts for the week So starting with the first which was Monday Our first alert was rolling adjusting trade in smh So we rolled our short strangle in smh from april which was down to 17 days to expiration out to may And then we adjusted our puts up from 92 to 104 And so let's take a look at the platform at smh So we've got two pieces on here In smh we've got the uh, let's see we've got the This one here where you can see price is well out of range, but keep in mind If we look at just the puts we've still got a decent amount of premium left in those So we're not looking to adjust again quite yet We definitely need some down movement in smh Like the rest of the market this thing's been on a tear to the upside And along those lines, I just I want to make some comments about the overall market I mean look at what has happened since the beginning of the year. I mean the market has just ripped higher You know, this is smh, but if we look at For example, the the s and p 500 it's a very similar story And anytime you have a one directional extended move like this That is the risk To the methodology that we teach right we love two-sided action We love high implied volatility But when you get an extended up move In stocks not only does that Breach your call side, but also you are now we're looking at a period of low implied volatility But just keep in mind that that's this doesn't go on forever Okay, I know in a period like this where we've seen very little pullbacks in in over three months We've seen just two little pullbacks basically In in three months This is gonna hurt. I mean we carry short delta. And so this is going to be painful I mean we've given up a lot of our profits that we saw From just a you know just a couple months ago because we've carried short delta because we've seen this extended upside And now we're at you know, we with our range of short delta to theta We like to be in that one to one range up to five to one as far as our short delta versus our theta We are currently right at about that five to one ratio So what does that mean a one it has hurt our p&l right? It's it's it's grinded away our p&l some of our p&l But we also have we're we're we're pretty short And so a couple things if we get a small down move a that's going to benefit us greatly And of course on the flip side if this thing continues to rip higher that's going to be painful But this isn't going to go on forever. Nothing moves in one direction forever So you've got to stay mechanical and just understand that periods like this are going to be a little bit painful But that's what you have to understand when you carry short delta the way we do so This isn't anything we haven't seen before And while it's still painful every time it happens You've got to you've got to keep a mindset of understanding what's going on and don't panic and and and don't do anything stupid Just stay mechanical now if this thing does continue to stay high or continue higher I mean we're going to be fairly aggressive You know in the near term as far as either cutting loose some short delta or adding in some long delta Those are the two ways to kind of keep your portfolio balanced So look for that, uh, you know depending on what happens now obviously if this thing rolls over You know that's going to be the best for us And and that'll help our portfolio, uh tremendously, but you've got to stay mechanical Especially when you get to extremes Like we're seeing at this point All right, so well back to smh. Sorry got off on a little tangent there But smh so we've got this one piece that is is out of our range And then we've got our other piece here Which is still within our range after after we rolled but on both of these looking for a little bit of downside to benefit Next trade was a Opening trade in netflix. So this is a pre earnings long strangle Just like we teach in our earnings course The the focus of that module is really pre earnings long straddles, which would be just the same strike With a long strangle because netflix is a higher price stock We just widen those strikes out a little bit. So it's a technically a pre earnings long strangle And we're targeting about 15 percent, uh profit on this trade So we're looking for an expansion in implied volatility Leading up to earnings as well as you know, obviously a decent price move in either direction Will benefit that trade. So let's take a look at where we're at on netflix It's just been kind of bouncing around here. And uh, if we take a look at the implied volatility We have not gotten that expansion at this point earnings is coming up on 4 16 So, you know, we're we're anticipating that we're going to get a little bit of a pop and implied volatility And then obviously if we get a decent move in one direction or another that's going to benefit that trade So just holding steady for now Next trade closing adjusting trade in wheat. So we had uh, uh an iron condor on in wheat We went ahead and booked that one booked over 40 of max profit on that piece of the trade And then we're still holding our short call vertical From a previous iron condor and prices moved down in wheat. So it's come back into range And now we're just holding on to this To see if that can come back down and if it gets down to about around 450 455 as far as the price We'll go ahead and book that and and take a profit on that iron condor overall We've also got a another iron condor in wheat which is an alert coming up here So I'll just go ahead and address this one here. We put on another iron condor price It's fairly centered here. Just waiting for some time to pass in that one Next trade closing adjusting trade in invidia. So we had this iron condor on in invidia Price of invidia has been on a quite a wild ride We had a couple opportunities where we actually had orders in to get filled when it was pretty centered Unfortunately price ran away from us and now and then it breached the call vertical side Uh, excuse me. It breached our upside break even so we closed out the put vertical side here And we're still holding the call vertical side, which is Out of our range now at this point out here. So looking for some downside to get back into range With invidia and like I said, you know, I mean this thing has just been on a tear for the last few weeks So hoping for a little bit of a pullback next week that would benefit us there Next trade rolling adjusting trade in XLK So we have a long put vertical in XLK that we've been holding for that short delta exposure We went ahead and rolled that from April out to May And uh, and we adjusted our strikes accordingly. So let's take a look at XLK That's the healthcare. Excuse me the technology ETF And uh price is still uh in range here just looking for a little bit of downside to benefit that piece Next trade closing trade in Disney So we had a short strangle in Disney booked 30 of max profit in just 12 days on that one So that was a good trade if we take a quick look at a chart of Disney Got a nice implied volatility contraction We put this on back here and then got that nice contraction and and exited there for a for a nice Profit in just 12 days in Disney Next trade was an opening trade in WBA Walgreens boots alliance So we put on an iron butterfly here Because it's a smaller a lower price stock We could have done an iron condor or a short strangle But we went with an iron butterfly just for a more narrow range and a higher credit And we put this on they announced earnings and the stock was down over 12 percent And it kept that instead of getting that implied volatility crush that you typically get after earnings It was just a little bit of a contraction So we put that on in anticipation of further contraction in implied volatility Which we sure which we certainly have gotten here And so as long as price continues to stabilize we'll take this off. I mean You know, we're at a point. We're at about 12 percent of max profit If we get you know on monday If this opens up and implied volatility is still contracting and price is still pretty centered We'll book a you know a quick 15 percent of max profit. We'll go ahead and take that one off You know looking for about 150 160 bucks Uh before we take that off we want to make it worth the transaction costs and everything else So, uh, hopefully we get a quick winner in that early next week, but we will see Next trade a closing trade in ewz So similar to disney we had this one on for just 12 days Booked over 30 of max profit got a quick implied volatility contraction in ewz Which gave us the ability To book that one And that's the key with these with this type of trading. I mean you've got to just keep Putting on occurrences putting them on taking them off putting them on booking winners putting them on making adjustments And and and you'll and that's how we're profitable over time If you look at um, uh ewz, we put it on back here got that quick implied volatility contraction And booked that 30 of max profit winner So we're not we're out of ewz. We're gonna wait for implied volatility to pop back up Before we would Put that put another trade back on Next trade was an opening adjusting trade in zw, which is wheat I already mentioned that we just added that new iron condor on in june with 51 days to expiration at that point Next trade closing adjusting trade in spy. So we closed out the put vertical side of our iron condor and spy Price had breached our upside break even There's very little value left in the put vertical. So we closed it out Still holding that call vertical side. So if we take a look at sp y Uh, you can see here price has moved out of range now. Keep in mind this this gray area is kind of the one standard deviation move So there's still a very decent chance price could move back into range here This is in april and so we've still got 13 days to expiration Remember if this was a naked position, we would roll this when we get under 21 days to expiration But because it's defined risk, we're willing to hold this until we get Closer to expiration. We'll hold it even into expiration week if needed And then in this case we would probably roll that out or close it depending on where we're at with our overall Short delta to theta ratio. Uh, so we'll see what happens. We'll we'll give that more time Next trade it was an opening trade in lulu So we did a long call vertical in lulu just adding some long delta to our portfolio and with the anticipation Uh, that we we'd like the upside in lulu And here here's kind of the thought process behind this Uh, if you were in the community after they announced earnings This price after earnings gapped up well above the expected move and when that happens, we like to put on Short puts or short put verticals in anticipation that price is going to stabilize or continue higher Now we never got filled And I still just continue to watch this for the next few days and and with implied volatility continuing to contract We didn't sell a put we didn't sell a put vertical Instead we bought a long call vertical which is which is virtually the same When when it comes to the the risk profile graph The difference is uh instead of Selling a put vertical we bought a long call vertical In anticipation that implied volatility may may pop up a little bit which would help us but either way they're they're they're very They're very very similar. So either one would have been fine We did get a nice pop yesterday and then it's uh price is coming down a little bit But looking for just a little bit more of a continuation to the upside And if we if we get that we'll we'll book this early next week Uh trying to book, you know, 30 to 50 percent of max profit on this trade So hopefully we get a little bit of a continuation to the upside on that early next week Next trade was a rolling adjusting trade in es So we've got this long put vertical that we've been holding for that short delta exposure and just kind of keeping this on as as a You know a short delta hedge And so price had moved up higher Well out of range with with a low probability of getting back and sort of that when that happens We like to roll to extend duration this keeps that short delta in our portfolio And gets us back to a positive theta position And so let me just explain what I mean there, you know when price gets out here Then then you get to a point where that theta actually turns negative. So we want to get this back into range And you'll see here That you know now we're in a positive theta position So we're collecting that theta as long as it stays within our range Obviously the best would be a quick down move and that's going to benefit that trade the most But that's just uh, that's just a short delta piece that we have in for our overall portfolio Next trade was an opening trade in jp morgan So to add some additional long delta to keep our portfolio balance We added in a long call in jp morgan and we did this The only time that we'll ever buy a long call Is pre earnings and the reason is is because we can expect or anticipate a possible Expansion and implied volatility so it slows down that theta decay and sometime actually, you know If we get a big spike in implied volatility, it really helps our position So that's what we did in jpm So let's take a look Let's take a look at the chart first So basically what we're looking at is we've had this quick up move in jpm And then we had this little bit of a pullback on this day here and that's where we got in And then prices popped up a little bit Not enough to take off yet, but if we just get a little quick move higher in jp morgan leading up to earnings We'll book a profit there now. You can see we've got a we implied volatility really contracted today Which hurt our position, but again, hopefully we get you know that typical Pattern with implied volatility expanding into earnings next week And hopefully we can book a quick winner in jp morgan They announce on 412 before market. So we want to be out on 411 at the latest So we'll be keeping an eye on that and send alerts as needed You can see we're we're basically where we put this on no profit or loss at this point But if we can get a quick move, hopefully book a quick profit on that one Next trade closing adjusting trade in iyr So we closed out the put vertical side of our iron condor price had breached our upside break even and it actually had breached it It was out there past our break even for several days But we were just giving it a little bit more time Before we closed that out, but it continued to grind higher. So we went ahead and closed that out Still holding the call vertical side on that one And so that's what this looks like here Looking for a little bit of a downside movement to benefit that So we'll address that here in the next week or so By either closing or rolling that one out And then next trade was a rolling adjusting trade in qqq So we have two sets of short call verticals in qqq This one in april we went ahead and rolled that out to may And adjusted our strikes to get it back into that positive theta position and keep that short delta exposure in our portfolio So here's that one here You can see we just did that today So pretty much the same spot where we did it and then we've got this other one that is still within range here So both of these just looking for some downside to benefit those Next trade was a closing trade in six b the british pound So we had this one on we made one adjustment one roll And then because implied volatility just continued to stay high with the kind of uncertainty around brexit But we we stayed in price stayed pretty stable And then over the last few days got a really nice contraction in implied volatility If we look at fxb, which is the corresponding etf you can see just this week We've got a great contraction and implied volatility a lot of that uncertainty Is coming out of the market as we get closer to that kind of brexit date that they are anticipating and so That gave us a chance to book over $500 in profit on six b now implied volatility is still nice and high Especially compared to a lot of other things so if if if implied unless implied volatility just contracts massively on monday We'll look to put on another position in six b, but we are completely out of it at this point and last trade Natty gas so we we rolled one of our strangles from may which was at 20 days to expiration Remember when we get under that 21 days? We want to look to roll out And that's what we did here. And then we we adjusted our strikes. I want to explain this a little bit We just adjusted our puts we left the calls the same And we just adjusted our puts down from 3.25 to 3 The main reason is because these puts are so deep in the money that the open interest Starts to get a little bit sparse that deep in the money. So we just wanted to move that down And and keep our exposure in that gas here. So Let's take a look at natty gas. So we've got these two different pieces on This is the one in This is the one in may And you can see we just need we need some upside movement in that gas and we'll roll this one Next week as well. Remember, we're under that 21 days to expiration. So we want to roll that out But just want to spread out our roll. So we're not doing it all in one day So just looking for a little bit upside there And then this one here Same thing. We need some upside movement, but this is the one that we just rolled. So we're at the 2.8 call 3 put So just looking for some more theta to decay And some more time to pass and a little bit of up movement in that one All right, so those are all the alerts. Let's take a look at some of the other positions that we have on Oil we've got 41 days to expiration on these options. So a lot of time here Let's uh, let's separate these So we've got the 53 call 57 and a half put because the price is out of range But if we look at the put if we look at the put Still got a decent amount of premium left in there. So not looking to Make any adjustments there and then this one slightly out of range same kind of story Still have a decent amount of premium in those put So we don't need to do any rolls or adjustments at this point Just looking for some downside movement in oil to benefit that I'll see z n the notes. We've got two pieces on here We've got this unadjusted strangle here, which is got a little bit of profit Just waiting for a little bit more time to pass before we do anything on that one And then our other piece is this straddle And this was a originally a strangle that we ended up adjusting into a straddle And on this one, we've got 20 days to expiration. Excuse me 21 And so I didn't do the roll today I just wanted to give it over the weekend, but early next week look for us to roll that one out to june as well Collect a credit and continue to manage that one Assuming price is kind of where it is right now. We'll just keep the same strikes keep that 123 and a half Straddle and we'll just roll that out to the next expiration to to extend duration on that one I mentioned wheat Excuse me DIA we've got this short call vertical. It's still in April If if price doesn't come back down We'll we'll look to roll this out to get this back into a positive theta position next week And then we've got a full iron condor That's already out in may and you can see price is just kind of hanging out here Near the upper end of the range on di a Eem we've got this short call vertical. We need some price to go back down to get back into range here So, you know again looking at this This gray box is kind of one standard deviation move. So if price doesn't Come down pretty quick. We'll look to roll this out to mate again to get back into a positive theta position on that one IWM we've got an iron condor on here. Just waiting for some more time to pass. We're still within range here I mentioned IYR J and J man. This one's a little frustrating If we would have just you know, we we had a decent profit It was just we were just waiting for a little bit more upside when price was up here to book a profit unfortunately J and J did not follow the rest of the market Which is a little frustrating came back down into center and so now we're just we're whole we're Currently in a little bit of a losing position here but just waiting for potential expansion Inimplied volatility Which we've gotten but uh, but this price movement has gotten this back down into range So we need a decent price move either up or down before we get to earnings And earnings is 416. So we've got a little bit of time there But hopefully we get a little bit of decent price movement to get a get a profit on that one I mentioned JP Morgan. I mentioned lulu I mentioned netflix. I mentioned nvidia. I mentioned cues. I mentioned smh. I mentioned spy. I mentioned wba xlk And then lastly xrt So xrt we've got this adjusted strangle price is just kind of hanging out here near the upper end of the range Like a lot of these just need a little bit of downside movement and some more ivy contraction and uh Before we get out of that one. We're still in may we're we're out in may in this so Plenty of time 42 days to expiration in that one So nothing to do there So that's it guys. That's all the alerts. That's all the positions. Everybody have a great week of trading stay mechanical Just you know, keep your keep your uh positions going do the necessary adjustments roles Uh, you know keep keep your short delta to theta ratio In check between that one to one and five to one at least that's what we like to do Uh and and stay mechanical this one directional move to the upside and stocks cannot last forever And uh, hopefully we get a little bit downside Next week that'll both help our current positions and give us the opportunity to enter some new positions So we'll see you next week. Have a great weekend