Using Options as a Stock Investor | Combining Option Strategies

happy Tuesday to you we welcome you to

using options as a stock investor my

name is James Boyd alongside with me is

my good friend Brent Moors in the chat

we welcome him a fellow instructor as

well he does teach a class on learning

how to use thinker swim today at three

Eastern so check that out just real

quick as we're getting started when we

talk about using options like what type

of options we really try to focus on

probably the most for our examples cash

secure puts cover calls verticals

bullish and bears credits and debits

today I'd like to kind of branch that

out a little bit and talk about

synthetics a bullish version and a

bearish version of that here today we'll

talk about why so just real quick as we

hop right in remember that options carry

a high level risk not suitable for all

investors also understand that when we

talk about examples we will uh they are

just that and we will use the paper

money software application known as the

desktop okay and um I am teaching the

mobile class on Friday in the morning

make sure you're also familiar with the

mobile as well also remember when we

talk about investing investing involves

risk including loss of principle and

when we also talk about examples and we

bring up let's say uh options we will

reference the option Greeks as well now

today what I want to do is I want to

take a look at we will talk about market

conditions I think as of yesterday the

market conditions didn't look that great

this morning things some stocks are

starting to look A Little Bit Stronger

we'll talk about those we'll also talk

about our two portfolios where we are we

use this class as kind of more of the

trading class of the week if you will

and uh what we'll also do is we'll talk

about using those synthetics bullish and

bears to play those Trends so first off

if we take a quick look and let's just

pull up I want to kind of look at the

Dow first okay if you look at the Dow

this is the index that really fell to

the downside

first we would like to see some

leadership in the Dow okay if you look

at the Dow it was like a well it went

straight up and we like those and then

it went straight down and gave it all

back if you look at kind of where we're

fighting and and if you kind of take a

look at the moving average one of the

moving averages okay turned green and

you're going to notice that from

yesterday where that lower Shadow was

where is that lower Shadow uh it's well

went right down to that  period moving

average so keep in mind that maybe is

that support starting to be built

already now today you might say oh yeah

it's down  points it doesn't look that

great but you got remember you got to

start somewhere okay and so starting to

see a little turn some stocks in the

doubt look a little stronger okay we're

going to bring those up here today we're

going to have more of a bullish slant

we're going to try to take advantage of

the some of the cash that's in these two

accounts and put it to work okay so the

biggest point I want to say say about

the Dow is look for leadership in the

Dow to see if the market can't bounce

back to the upside okay so far A little

turn like to see like a bounce in that

period showing green okay the SPX we

don't even have any green on any moving

average yet we do have long lower

Shadows okay and that's pretty

interesting when you see Shadows uh long

lower Tails as well you could say kind

of you know is that trying to hold that

support level of  which are just

really the old high okay that's where

we're getting that number okay NASDAQ

itself but no no no green on the moving

averages same thing actually goes for

the NASDAQ okay sold off down to where

we broke out from not completely unusual

and long lower Shadows again no turn on

the moving averages yet and the

Russ the Russell was doing pretty good

and then today one of the ones okay we

don't trade the Russell that much but

that's where it is kind of in no man's

land now volatility we talked about this

last week and some if some of you don't

know we do have a playlist and that

playlist which I saw Brent send out I

appreciate that we talked about last

week Vick's low and showing a Macky

Divergence okay when we see that it

typically means the market might be kind

of consolidating Andor Maybe starting to

pull back okay like we said yesterday

the pullbacks don't last forever okay we

want to start look and see what stocks

are showing the relative strength what

are we actually looking for to see if

we're starting to see better signs of

potential bouncing it won't be on all of

them but there should be some leaders if

we're starting to get some traction now

what I want to do is also pull this back

up when you look at the vix we went from

a really really low reading kind of more

to the mid

level not crashing to the upside okay

and I know you're thinking please can I

get a vix above  it's not giving it to

us right now what if I beg okay uh I

don't know if that really works so

volatility kind of more in that neutral

range let's say not exploding okay now I

want to bring up just super fast sectors

now before I do I want to ask you what

sectors have been the strongest and

again I'm relying that you're looking on

this okay what are you on a daily

routine you should know this already you

should have already done the routine

okay the only one that probably say I

haven't done the routine yet is someone

who's waking up in Hawaii like Scott

okay well if you take a look at the only

sector and we said this yesterday it's

real estate okay real estate and I'm

just using this as kind of a way to

capture what real estate is doing you

might have have a different symbol

that's fine use yours we're going to use

this one real estate is the only one

that's kind of Smashing its way into

resistance and trying to do a bullish

engulfing into that area of resistance I

want to talk about real estate here

today okay the other one we actually saw

which is

technology that's the one that's the

only other one that was actually quite

strong the only one okay now what we're

also going to do is we're going to go to

market watch we're going to bring this

up we talked about using the whole

moving average counter yesterday and I

just want to bring this up if I can in

the sectors and let's kind of see what

we have okay so this is going to kind of

paint that picture so first off when we

see and by the way I did change that

color to the dark green color okay thank

you for that and what you're going to

notice is of the sectors energy Staples

utilities Etc all the way down there's

only one sector

that is showing green on the  period

moving average the three represents

three days that it's been green it's

been one day Green in terms of the

period moving average you're going to

see that the technology did go red okay

red meaning it's a red moving average

line it's been down for a day one . is

a day okay it's been green for  but

what you're going to notice is it did

turn down so there's only one sector so

what does that kind of tell us about the

market we don't really have breadth of

the market here in terms of bullish

breadth where we have multiple sectors

pushing so it's kind of like investors

are picking little slices of the market

they like and the rest of them not so

much okay now what I want to do is let's

kind of go ahead and take a look at uh I

want to take a look at a position that

we talked about uh before and before we

do that I'm gonna kind of just talk

about these two portfolios for just a

moment and then we're gonna just kind of

start putting on some ideas now number

one is you know that in our classes it's

not just showing strategies we want to

show portfolios over time now if you

watch any of my classes I'm I'm kind of

from like the show me state show me okay

you could talk about strategies and this

analysis all you want show me how that

moves the portfolio relative to The

Benchmark show me the scoreboard okay

now in our

examples we are really focus on relative

strength and we're using stocks and

options to try to trade that relative

strength some of the things we actually

talk about you might not do so

nevertheless we're going to show an

example the portfolio and you pick what

you like so first off this portfolio as

of this morning was at , the margin

k and these started out on November

it was at

, okay when it started and it's

sitting here about let's say .

% if you get real nerdy okay by the way

that number changed a little bit so

let's just say % it's a little higher

now what I want us to look at is how

much are we probably having invested at

any given time we're probably about %

invested why is it higher there compared

to the IRA you got a lower account value

okay it's it's easier to kind of put

that Capital work now when you take a

look at the IRA just real quick

uh

okay and that for example and that

started at

okay and if we look at that that is

sitting at

.% okay now how much of the portfolio

is really invested probably on average

over time it's probably % invested

over time since November  and now when

we compare these two to the SPX and say

what's the performance of the SPX s it's

. the goal is when the market falls

down to outperform the goal is when the

market goes up to outperform okay we are

not looking at like well hey let's take

a look at what the gain was relative to

how much we have invested we want to try

to use the capitals as invested so

there's a motivation to use the capital

okay so some of you have asked about

well maybe you should actually just look

at how much you were invested no we're

not going to do that uh so we're

comparing that number that number and

we're comparing it to this number okay

the . is if you all in in the S&P

adds The Benchmark okay now let's

again we're gonna We want to kind of get

graded on using the whole portfolio

value not just what we invested okay now

what I want to do is I want to go back

to the example given of Apple for just a

moment and I want to bring up in this

case let's go this position real quick

okay so one of the strategies we want to

talk about and there was reasons to talk

about it okay so we talked about Apple

long and we talked about Apple going up

into the area of

resistance and when you talk that when

you see that on the chart that normally

means that you're thinking about hey I'm

going to do like a covered call right so

what I want to do is I want to look at

managing this cover call and then kind

of talk about what to do with it okay so

first off if we look at the  call

that's what we have the obligation for

from now to expiration someone can take

our shares at  if we look and see

where the stock is right now we're at

forish could someone in the open market

just take our shares immediately and the

answer yeah okay now this is paper money

so we were not going to probably get

assigned okay prior to that expiration

but in real money that could be a sign

meaning the shares of stock could be

sold to somebody else they could

exercise their right they're long we're

short and the biggest thing is that

could happen in real money okay now I

want to talk talk about the gain the

maximum gain here okay so a lot of

people kind of talk about well how do

you manage the position well when we

take a look at this position we got in

at

okay

and I want us to kind of run the math

if you will

and we were able to make up to

so what's the stock appreciation from

to  I'm not trying to trick you

here by the way okay now when you take a

look at this that would really be about

$ that's a stock appreciation that

should trick no one okay just made a

little thinner so we can read it now

what we also want to take a look at is

the premium

$. that's on top of the stock

appreciation we're going to put

right there and so if we add those two

up  

six this is if we got a

% of it if that stock goes to  or

higher that's  you get  okay and

the maximum gain is

now I want to look and see if I did

anything wrong there okay now if you

take a look at that  shares

I got a maximum gain here at

and it shows right now we're over

that it's looking at

something so it shows that we're

actually over the  it it shows that

we're over the  and we're at  I'm

kind of thinking something's a little

awkward well let's go with it okay now

how do we know we're kind of at the

threshold of nearing maximum gain if

you're in a situation where you're

probably over a  Delta okay for that

call if you're over that  Delta and

we're right now at

if you're over a  Delta what does

that tell us well it means we're getting

deeper and deeper and deeper in the

money okay now what you're going to

notice in this case is how much time

Decay is still in this option answer

$. okay so if we held it what else

could we make answer is   more

that's the time value in the option

value okay now the one thing is if we go

back to the Chart does this look like

something that's breaking out I need a

yes or no does this look like something

that's breaking out yes or

no now we take a look at that what do

you notice also on the chart of Apple

before I even pull up the chart let's

kind of take a look at what the what it

showing to us on the monitor page okay

when we take a look at the monitor page

what do you notice the trend three is

good we like that the whole moving

average that counter it's cross green it

turned green four days ago it turned

green on the  period moving average

two days ago okay so in this case the

investor might say gez I might be

nearing that maximum gain I want to kind

of take a look at something just real

quick okay yeah that's weird I think

something played tricks it with me so

when we looked at these numbers I think

the number was  was the maximum gain

is that correct

how much of the maximum gain do we

have okay I think  was the maximum

gain or near there check me if I'm wrong

we're at

okay so the  is really taking a

look at the stock gain and the cover

call

loss so we're getting that  from that

number what percent of the maximum gain

do we have type answer that I'm going to

tell you right now you're not going to

know how to do uh manage the position if

you cannot run maximum gain and loss

plus

so this is  okay so if we're

at  and the maximum gain

is

we are right now at

% what would give us the idea that we

probably a decent gain if you get the

Delta above  okay if that Delta is

above  on that short call strike there

a pretty good gain that you might be

starting to get  % Etc okay what

left can we make well the difference

between these two numbers that the

difference between those two numbers is

really the extrinsic value now what is a

good game for you you might say well

James good game for me is like I want

% or nothing some people might say

James if I got let's say % I'm done

I'm tapping out now let's kind of say

that we're at % what could the

investor do well we're going to go ahead

and hold down the shift key on the

computer we are going to exit both

positions but I'm going to change the

strategy okay so notice when to hold the

shift key down and then click on the two

lines they they're highlighted we're

going to rightclick create closing order

now someone might ask well why don't you

roll the call we're not going to roll

the call into the area of resistance

okay we're going to create closing order

we're going to sell the position when we

sell the position we're buying the call

back taking the loss and where are the

gains the gains are in the shares okay

and we're getting the net of those two

okay now Ron says don't be a don't

be a greedy Pig okay he doesn't say

greedy pick but he says % so we're

going to go ahead and exit that position

confirm and

send and there we go okay now that fills

now what we're going to do in this case

is we're going to go back to this kind

of what we're seeing on the chart and

we're going to go ahead and try to

change the strategy now if you were

managing this position what type of

strategy would you consider if it was

right here and with a fresh crossover

what type of strategy would you consider

long

calls buy more

shares change it to maybe like a

vertical where it's not as directly

sensitive what would you consider and

this is really important if you're going

into the area of major resistance you

might choose a strategy that is not as

high we know if you buy shares a stock

is as high as you can get okay so we're

going to change it to like a

vertical and we're going to do a short

putut vertical we're going to do a short

put vertical where we think the stock

could stay up above a certain level okay

let's imagine the as an investor we

decided to go to this

July's and we're g to sell the

s that  is kind of like that area

of support that consolidation we had

recently and if we take a look at this

we do already have the   and I

want to change that to where we can kind

of just double check just why we're on

it

okay what's that percent open and we're

at

% so why we're just on it we're going

to take this position we're going to

exit that position % on that trade

bucks I think that's what was kind of I

was uh I think I was looking at that

before it threw me off create closing

order we're going to buy that back we're

going to reestablish a new position

going to profit take on that spank you

very much as some people say to

That's pre commmission confirm send

there's the commission send the order

now the one that we're going to

establish is right click on that

cell

vertical and we're going to not take a

full position why are we not going to

take a full position not going to take a

full position because we're kind of

nearing that air resistance we don't

want to try to have some ammunition if

you will of capital if that were to

break out that we can add add to it so

what I'm going to do is I'm going to

come back and we're going to only do

let's say like two contracts there's the

credit when we look at what the maximum

loss is on and we're going to do this in

the ira the maximum loss is  let's

say that's half of the  that we

could

lose if that were to break out we're

going to try to add another two on the

potential breakout we're going to also

note the commission check send the order

so we got out of the cover call at %

we got out of for example also the the

short put vertical which was June which

was at % and then we added a new

position a half position up near the

area of resistance okay now here's the

comment from Michelle with the SPV on

Apple would increasing volatility affect

the underlying

price so the one thing the about the

vertical right when you take a look at

the vertical that is kind of what you're

trying to get away from the effects of

volatility and so when you look at the

vertical you are on both sides of the

trade both sides so when you look at

this position which is that one right

here your long your short positive Vega

your long neg uh excuse me looking at

the wrong column I was like that's

backwards Vega short negative that's

correct and then what you're going to

notice is if you look at the long putut

negative

no bullish or positive and you're going

to get the effect of the the total vague

on those two positions negative

. by selling something and buying

something you're trying to offset the

effects of volatility so when you look

at these two numbers Delta Theta Vega

which number is the highest is Delta so

if you said of the three option Greeks

what are you really trying to do you're

playing Delta you're playing Direction

the most second is volatility so what do

we want the stock to do we want it to go

up the stock actually tends to go up

what does volatility tend to do it tends

to go down so it's really Direction

first volatility second okay now Harry

actually says would you consider a short

call vertical not if you think we could

go up above resistance now if we go back

to the Chart just last thing I'll say on

this we're going to switch the stocks

you know this has been a pretty strong

move going into the area of resistance

matter of fact we've gone up faster than

we went down kind of took time to go

down and then we shot back up whenever

we see something like that it's kind of

making us think could there be an

increasing likelihood of us going above

the area of resistance keep that in mind

okay for sure we're not going to do a

short call here because we think the

odds are rising that Apple could get

into that uh AI game we'll have to see

we'll play it out now I want to go back

to just kind of the one of the topics we

want to bring up here today and I want

to bring up meta for example just for a

moment okay now we know in the world of

options you were taught from the very

beginning you got an LC right long call

you got a long put okay you got an sc

which is a short call

and you got a short put okay now these

are individual

options and there's reasons why an

investor might do each at certain points

now what's kind of interesting about

this is you can use also the combination

of these two and if you think about like

let's say a long call what's something

negative that someone might say about a

long call you got to buy it you it's a

debit you got to get the stock to go to

the strike plus what whatever that debit

is it's a higher break even negative

time Decay okay if you come to the short

put what we're trying to do is if we use

a long call and a short put together

those are two bullish positions and what

I actually want to do here is I want to

look at a real estate stock and just uh

in this first example so when we talk

about a long synthetic we're using two

single options to create a higher Delta

position or strategy I want to go back

to Simon Property Group for just a sec

we're going to use this as our first

example okay now what you're going to

notice is if we go to the trade tab if

we were going to talk about hey we're

gonna buy a call what we were taught

from the very beginning is we're trying

to buy something at the money or in the

money that way there is some intrinsic

value some Equity now that Equity isn't

just stagnant it can change based on

where the stock is in relationship to

the strike so if we pay $ cents for

this call the July

about half of that money is

intrinsic value where's that intrinsic

value coming from it's coming from the

stock price

and that is  above the strike

price of  so think of intrinsic value

like Equity okay momentary Equity the ex

transic value it's about half half okay

now what we're going to do is

going to come over to the put side okay

now I want to kind of layer this one at

a time so baby step number one is we're

going to buy the call okay when we buy

that call Long uh positive Delta

negative Theta positive Delta okay bring

that up on the analy tab if you want and

what you're now going to notice is

there's your upside that's what people

like those one Calls Unlimited upside

potential there's your Delta there's

your Theta and there's your Vega if we

said what is a long call really a play

on what has the highest uh numbers in

terms of the option Greeks Delta first

Theta second okay now let's add this

we're going to go single order at first

triggers seq now we know that when

someone sells the put we're going to go

right at the  which is a little

higher than what we might consider we're

going to sell that and there's the put

now that's not a right that's the

obligation to buy the shares at the

strike price now let's put this on so we

can see the difference okay now if we

use the combination of these two with

the exact same strike the Delta is

. it's synthetically replicating the

profit loss as if we own shares of stock

but we don't we don't own the shares

okay so when you do a long call on a

short put at the same strike that Delta

is pretty much going to be  okay so

when people say well I like to buy

Shar stock but I can't get in well you

don't have to someone could actually say

I'm GNA do a synthetic okay it's a way

to replicate that Delta now what you're

going to notice is look at the option

Greeks when we combine it gamma's flat

Theta is almost zero Vega is almost zero

so what is this really a play on flat

out Direction diagonal line up diagonal

line down you live and die by Direction

okay now many of us like this upside

right here happy face with this over

here it's don't like that D of line

going down what could we do in terms of

trying to make that line not as steep to

the downside well we know that if you

buy a put

below what you're going to see in this

case is we could make that line where it

stops going down and that's what we're

going to do now how much does it cost to

get in from a debit perspective well you

pay  and then you collect  so the

answer there if we kind of just did

those two only it's about a

$ now what we're going to do in this

trade is we're going to kind of set up

we're going to take uh I'm going to

right click on this line let's delete

that okay we're going to right click on

this  sell

vertical okay and what it's going to do

especially if we're an IRA we're not

going to try to take up as much buying

power and make it where the risk is all

the way down to zero that's where the

verticals come in now if you're thinking

about typical vertical oh yeah $ wide

sure but maybe the investor says no I

just want to buy something out of the

money with a dealt of  or less why

would the investor do

that already said it number one is to

create a matx loss higher than zero but

also to cut the buying power that the

investor needs to set aside does that

alter the Greeks at all yes how much

does it change it by well let's pull it

up and see so now if you take a look at

the the long call and that wide vertical

the Delta was  but if we did it like

this the Delta is  not dramatic

difference does it really change the

gamma Theta Vega at all Vega is a little

positive but not massive it's still a

major play on direction we live and die

by Direction and now what you're going

to notice is instead of the max loss

being all the way to zero you're going

to see that the max loss is right around

about $,

so that is why we're trying to do this

so think about all of you out there with

a Roth IRA traditional IRA you want to

buy shares of stock you want to get a

higher directional sensitivity to the

upside or downside what's the way you

could do it try to do it through a

synthetic now what we're going to do is

we're going to go ahead and confirm and

send this now when you buy a put two it

adds that  cents okay for this example

which we haven't seen as many examples

I'm not going to set a Target not going

to set a stop we're just going to kind

of let this be an example in this first

one okay this is going to kind of be

something we practice with and on the

next example how do we set up like a

stop at a Target okay now what you're

going to see is the long call fill check

and what you're now going to see in this

case is we're still waiting for the puts

to fill okay now I want to go back also

to another example and I want to bring

up kind of what we're seeing uh just

real quick uh so just brief ly T-Mobile

we've talked about this really shot to

the upside might it continue when we

take a look at for example CL Colgate

Palmolive okay now I'm GNA kind of pick

some various different stocks that we

might practice this on now some people

say like I'm going to do staple stocks

because they're boring or utility stocks

because they boring well no one said you

had to buy shares some people buy the

shares because they want the dividends

but we're going to kind of do a long

synthetic on Colgate palive with a stop

and a Target this kind of looks like

perhaps a channel trade setup maybe in

the bottom of the channel okay could we

go to the top of the channel now what

we're going to do is we're going to try

when we talk about buying long calls

okay we're talking about buying long

calls where we can go out minimum

days maybe  and we're trying to go

maybe where we could sell within four to

days to expiration the goal is not to

wait to the very end we're going to try

to pick something at the money in the

money why because whatever we pay we

want that some of the part of the

payment to be some intrinsic value also

known as Equity now what you're going to

notice is we're going to come over here

to the put side and this is the bad part

about if you do long synthetics let's

say on these type of stocks staple

stocks utility stocks the calls are less

expensive because they imply volatility

is not as expensive uh it's it's not as

high but also if the volatility is not

as high the premiums we get over here

are not going to be as high okay fine

but the question really is are you doing

it for the short put

premium that's not really why you're

doing it you're doing it long call and

short putut to play

Delta play the direction

okay so if we rightclick on this  and

a half buy we could also go to where it

says collar synthetic which we will

you're now going to notice in this case

and notice on this we're not going to

buy the put what what we could okay I'm

just going to show this if you want if

you I'm not concerned about buying power

do I have to do the long put no you

could do single order first triggers seq

right click on that line create opposite

order and now this flips it when we do

this and you've seen this before limit

Market data GTC you could then just go

in and put a Target at or above at or

below just like that so if you're not

concerned about the downside Max loss or

the buying power you don't have to okay

that's your choice but wonder if you did

want to okay we're going to go long the

call we did that we're also going to go

first triggers scq and we're going to

add that short put vertical we're going

to sell the  and a half and we're going

to buy the

we talked about buying the one that

really had a Delta of  or less that's

or less or this is  or less okay

now do we ever really think that that

is going to become worth something we're

sure hoping it doesn't because if it

does that means the stock went down okay

now the way we show this is we allow the

position to fill

what side of this trade is really

bullish well a long call is

bullish and the short put is

bullish this right here a long put

that's bearish okay so what is it that

we're setting a stop and a Target on

we're only going to set a stop and a

Target on those two right there now

let's look and see if it fills okay

let's do one contract notice here uh we

also see that there's a maximum loss

bill in because of that spread okay

notice the extra Commission because

they're buying the put two how much

money is being set aside in the IRA

account

$ send the order now the long call

fills man those puts are tough today

okay come on come on okay there we go uh

now the vertical fills uh for the short

vertical put but we're still waiting

actually for that Colgate now Colgate

has not filled but I'm going to go back

to just real quick and I'm going to try

to see if I can't just get filled as

soon as possible we're going to change

this to a market order so I can get

filled and we can put that Target okay

it fills uh there we go now let's say

for example which trade is bullish how

would you know that so whatever side of

the trade has positive Delta there it is

and there it is we're going to hold the

shift key down click on both of these

lines one two okay we're going to

rightclick now and when we rightclick

we're now going to go to where it says

create closing

order sell this is where we're going to

put on the target if we get at or above

or at or below exit the position okay

now what you're going to notice is if we

go to the charts I need this chart now

okay I'm GNA zoom in now if it was your

trade okay where would you say get out

if we go less than what price now let me

kind of help you see wherever you are

okay if you said James I want to get out

if we go let's say to  or lower and

let's say you told me hey I want to get

out if we go to  bucks that's where

I'm going to set the sell if we get at

uh that price or less if we said hey I

think it could go up to the top of the

channel let's say we said

is matter of fact I even push it a

little bit more let's say  and a half

okay we don't know what angle it might

go to or how long it might take if it

ever goes up there so what we're going

to do is we're going to take  and a

half as far as a Target and we're going

to take that $ threshold how do we do

that click on the gear to the right down

here click on the gear we're going to go

symbol CL Mark notice we're greater or

equal to  and a half so if we go to

and a half what is it going to do what

should it do well it it should sell the

call and buy the put back both of them

most likely should be for gains the

downside CL mark less or equal to we're

going to put  bucks now we know that

if the stock

drops that would or that would or should

hurt the long call Value that's the

bullish trade right the short putut

might not be adds negative just

depending upon how long it takes to drop

time Decay might help us here so now

what I want us to notice is these

numbers that we typed in here they are

there now part of your homework

assignment to today is to practice two

to three long synthetics okay now these

long synthetics can be done on different

types of stocks but I think you do need

to kind of comprehend that hey could

someone do this on booking

that's almost $, a share or Chipotle

Mexican Grill you got to think through

like if I was assigned a  shares of

stock what percent of my account would

that be so is it good for all stocks I

think you need to really think through

if I was assigned to buy the shares of

the stock could you buy the shares of

the stock and not represent more than a

certain percent of the portfolio we're

not going to do on Chipotle Mexican

we're not going to do it on on uh the

also booking holding the share price is

too high

okay so we're going to go to save

confirm send and notice well what about

the long put James that long put value

most likely will go to zero now what's

the risk of holding the long put into

expiration can that long

put uh become short shares over time yes

if the stock were to close below the

close below the long but that can morph

into short shares of stock so if you're

close to expiration and you have a long

put you might say I'm going to just sell

it for whatever I can get because I

don't want to have that risk okay now

notice there's the commission if it were

to fill at this price or that price

we're going to send the order okay now

if we take a look at this uh okay now

blue pole says now by the way you're

kind of let's kind of go back to

something we mentioned yesterday Okay so

yesterday I did a class it's called

technical indicators trading with

technical indicators and there was a

class called moving average Hall

application on thinker swim let me click

on that for just a moment okay now

notice and I don't know if some of you

know this okay but if I kind of pull

this up which I'm going to share with

you the video here okay when you pull up

that video and what you're now going to

see is if I click on this

now where was this okay so let me go

back for just a sec click on it and I'm

not sure if some of you know that at the

bottom of this the views it will say

more why do I care well if I click on

more you're now going to see the scripts

that I updated yesterday to the Schwab

thinker swim and if you said hey I would

like to have this chart Etc or some of

the things we talk about I put those

scripts right there okay so if you did

not get that make sure you get that now

so that's if you didn't see that now the

biggest actually thing is if you said I

want this specific chart okay but make

sure you look at the charts from

yesterday that is the chart from

yesterday or this is the chart currently

if that's directly what you're asking

okay not worry so blue pool that is

another way to get what I just put out

okay now I want to kind of go back to

just briefly some other stocks uh you're

seeing like raw stores okay keep an eye

on some of these back to school TJ Maxx

raw stores these are some stocks that

might be trying to break up through an

area of resistance keep an eye on Ross

and TJ Maxx one of the stocks that we're

also going to keep an eye on is meta

okay meta is another stock if we had a

little bit more time would like to

practice a long synthetic with a

conditional order if it got at or above

let's say   and a Target up near

the top of the channel keep an eye on uh

meta as it's kind of not pulling back

down and it's kind of creating a new

base closer to the resistance than the

prior low keep an eye where we did also

see some kind of setups here today was

uh like Honeywell okay you saw

Honeywell

RTX okay RTX which is gone bombs away to

the upside and also Lockheed Martin okay

keep an eye on those companies those

have actually held up quite well despite

the industrial sector not doing as well

caterpillar and deer went down quite a

bit now I also want to kind of just say

two last uh real estate stocks Avalon

Bay okay showed a recent crossover now

notice how we're kind of focusing on

stock where the shorter term moving

average crossed okay uh Avalon Bay did

and it's getting across here today okay

ESS okay pull this up and there it is

another one okay turned out turn Green

Cross okay could that one turn now I

want to kind of bring something up

something that we mentioned

yesterday when you look at these whole

moving average counters they're not just

on the market watch they can also be on

the monitor tab as well if you put the

script in based on the class we talked

about yesterday when you have the new

layout click on that three lines and

then for example you click on the gear

you can change the columns to what you

want to do whatever you want to

see this helps us kind of see those

turns example given Proctor and Gamble

down for eight days but what just turned

up lately Proctor and Gamble last last

two days it's been green on the moving

average let's verify scripts not

guaranteed for accuracy let's verify

that that turned up two days ago and

what do you know so when you have the

right

tools it can kind of cut down a lot of

time in terms of finding and that's why

we said it's a way to use sentiment it's

a way to kind of identify the entries

and potential exits Etc make sure you

have that that's how we're you using the

information from yesterday for

application here today now I'm out of my

time here today make sure that you have

the playlist this class has been

recorded okay as a homework assignment I

want you to practice two long synthetics

set a Target and a stop practice that

okay also for example coming up next we

will have Barbara Armstrong's class that

is gonna be uh a class on getting

started with options by rights and also

coming up later day Brett Moore's class

on exploring think or Swim now I want to

thank you so much for your comments and

your

participation uh we had a narrow Focus

here today on managing the Apple trade

uh the cover called the short putut the

short putut vertical the M the trade

strategy we really focus on trading

today was long synthetics and we talked

about why an investor might use that I'm

out of my time here today with what we

discussed it was done for example

illustrative purposes only and also

remember that all investing involves

risk this is been the class on using

options as a stock investor stay tuned

for Barber coming up next and with that

said thank you so much take care bye-bye