Trading Vertical Spreads with Phil Carava | Twitch #2

Trading Vertical Spreads with Phil Carava | Twitch #2

[MUSIC PLAYING] Hello, and welcome to
TD Ameritrade on Twitch. I am Anthony Panzeca, joined
always with Bill Ruby. How are you doing today, Bill? Pretty good. How are you doing, Anthony? I’m feeling pretty good. We made it to our second show. Surprise, surprise. The maiden voyage is over. We didn’t get fired. That’s always a good thing. I want everybody
to always join us every Wednesday from 1:00
PM to 2:00 PM Central. We’re going to be
looking at markets. We are going to be
looking at trades that were made the previous week. And we’re going to be putting
on new trades for this week. We’re going to be managing
all those positions. Feel free at home to play along. If you look below
there in your screen– if you can see that– there should be a link to
create a paperMoney account. And you can chat in with
your questions and comments at any time. OK, so let’s have
some fun with that. Where do we want to
go with this, Bill? Do you want to recognize
some of our newest followers? Yeah, we’ve got
[? ApplePaysBack, ?] [? PWAbraham1, ?]
[? VKRetchmar, ?] and [? MetalMike15. ?] It like
going all the way to six days back, we’ve got
[? DSVB373 ?] [? Ma– ?] It’s DVSB. DVSB– Yeah, I think he’s
trying to say– Did I say it backwards? Well he might be devious. And his first name might be a B. Devious B, that’d
be very clever. Which, it actually could
be you, like devious Bill. Mmm, I’m not that
clever, I don’t think. Maybe that’s his license plate. I don’t think you give
yourself enough credit. Well, we’ve got [? MHay1204, ?]
and [? Solatch. ?] [? Solatch. ?] [? Solatch. ?] [? Solatch. ?] Yes, so– And [? BillDozer. ?] [? BillDozer– ?] And that could be another one. –2019. That could also be him. Are you creating
multiple accounts? Oh, yeah, definitely
flooding the pool there. I wouldn’t put that past. No, well, I didn’t this
time, but that’s a good idea. Maybe I’ll consider it. Why don’t we take a
look at the markets. Yeah, let’s do it. We’ve got the Dow up 186, NASDAQ
up 86 points, and the S&P 500 up 25. Not too many big movers
today– we were looking at one. What is it? Was it VOX? VOX was a big one. Yeah, VOX, it’s actually
on the watch list there on the left side. You can see it. We’re up 11.89% right now. Oh, wow. On a $16 stock up at $176,
that’s a pretty big move. That’s a big move, for sure. Yeah. Let’s see, what was
the news on there? Oh, boy, let’s bring that up. Let’s pop that news open. Didn’t we have a news
one thing opened? I thought I had one before. That’s OK, we’ll
open it right here. And that’s VOX. Is it some kind
of recommendation? What’s going on there? Raymond James– Yup. Let’s see. Raymond James, there you go. VOX share is up. I didn’t think that– Scroll down a little bit. You want to scroll down? Yeah, scroll down a little bit. Let’s see what– we’re only
back to 8 o’clock this morning. Starboard– Yeah. Oh, there we go. VOX spikes after [? activist ?]
Starboard Value takes a stake. OK, so a big new
stakeholder there– That’s right. –bought up a bunch of shares. Well, that’ll do it. Yeah. That’ll do it– definitely
a bullish move there. Up over 10%– I mean, the market’s
also up a little bit. I mean, we’ve been kind of
range bound for this week. Yeah, we have. Granted, it’s been
a pretty wide range, but let’s see if we can
take a look at the market. All right, this guy
here, get him to the top. There we go. You want to look at, what,
the last five days or so? Yeah, let’s take a peek. Let’s take a look at
the last five days. I think we already
had that one up. There we go, a little higher. Yeah. We haven’t had a
tweet in awhile. No, we have not. Yeah, we need another
tweet to maybe spike the [? VIX, ?] get
some action going. Yeah, it could be
news-driven market here waiting for
something going on. For sure. And we have some great news. We have a guest this week. He is the Managing Director
of all of Trader Chicago. We have Phil Carava with us. Welcome, Phil. How’re you doing, Anthony? Thanks for joining us. We’re doing good. Thanks a lot for
coming on the show. We really do appreciate it. Well, I appreciate
you guys having me. And I’ve already
learned something here. There is a reason
that some of us are here in trading and working
with the markets and numbers, because hearing Bill try to work
through some of those screen names earlier was like– we
know he’s no English major. No, no, I’m more of
a math guy, I’d say. Words are not my forte. There you go. How long have you been
with [INAUDIBLE],, Phil? You’ve been with about,
what, since 2007? Yeah, oh ’07, 12 years
last week, actually. Now is that considered
[INAUDIBLE]?? Oh, congratulations. Nice, yeah, congrats. That’s awesome. And you were– you started
at pretty much the same time as our producer, correct? [INAUDIBLE] Yeah, it might’ve been
the same day, actually. Same day? Yeah. Wow. All kinds of talent there. A lot of greatness
in this room– I feel pretty intimidated. It’s like the– dated reference
here, but like the ’83 quarterbacks class. Yeah, nice. Well, you and I started
the same day as well. That’s right. Yeah. That’s right. We’re two different graduates
of different classes, I’d say. Yeah, we are the youngins. Yeah, like the
LeBron-Melo draft. Yeah. That’s exactly what
I was going to say. That’s where I was
going to go with it. Yeah, well, so
Managing Director– Yeah– did you work
at the Cboe, Phil? Probably got to cross managing
off, I’m not quite there. Oh, I don’t know. I appreciate you guys
putting it on me, but yeah, I was on the
Cboe for seven years. Nice, what did you down there? I started basically as
a runner and a clerk. You know, I don’t know if it was
even minimum wage at the time, but you know, you were
just kind of a gopher, and doing whatever
you were told, and soaking up some
of the knowledge from the people on the
floor as much as you could, and eventually kind
of prove yourself to be able to do a little
bit of math in your head back before some of this stuff
was as automated as it is now, and eventually got
on a trading badge. Sorry, but SWHit47
is a new follower. Thanks for joining us, SWHit47. Thank you. Sorry about that. That’s going to
happen throughout. Were you in trading
before you were a runner? Because I always find it
interesting with the stories from the floor where
people of all walks of life would get, like, a shot. They’d start as a runner. Is that kind of
how you were, like, coming in from a trading
background, or just kind of a random background? Yeah, I didn’t know anything. Basically, I was waiting
tables and tending bar at an Italian restaurant
near where I grew up. And one of the
lifers there said, you know, you’re kind of
smart when it comes to math. Like, you know what a 20%
tip is really quickly. So why don’t you just go get
a job on one of the floors downtown and put it to use? And I didn’t really think
I was listening to him, but just, it ended up happening. And that was it. I didn’t really know anybody and
didn’t really have a background in it. Did you like it when
you were down there? What was your favorite part? Like it seemed like
madness back then. Yeah, I think I
missed out on some of the craziness of the ’80s
and even early-to-mid ’90s before I got down there. And some of those
stories are probably not safe for broadcast. But you know, it was
definitely a lot more laid back than some of your typical
corporate environments you might see, good
times all around– not that it’s not a good
time here, but I don’t think they had such
a thing as an HR department back then. No. No. And you know, if you had a
disagreement with somebody, it might be brought
outside, or at least maybe wait until the closing
bell to take it out to what we’d call the horse, as they– you guys know the horse, right? There is a statue
outside the Cboe. Yeah, I’ll meet you
out by the horse. And like, that would happen, as
if you’re getting out of school and you’ve got a
beef to iron out. What year did you
start down there? ’98. So you started really at the
beginning like the tech bubble. And things were really just
starting to get chaotic. It was hopping, right? That’s about when I started. You had– I mean,
things were flying. You had stocks like
Qualcomm hitting 1,000. And people said, how
is that even possible? Valuation at these levels is
unheard of and unprecedented. And I was working for
a big trading group at the time, kind of trading
their money as I first got on the floor on a badge. I eventually went out on my own. And that’s when we saw
things kind of burst. Yeah, well just so– a
badge, not everyone may know. Badge is kind of
like, it’s a seed that you would either lease. And that allowed you
to trade on the floor. So you would be able to take
orders, and work orders out on the floor, and all
that kind of thing. Not everyone may know
that about the exchange. Yeah, because you had a badge. And then you had a
three-letter acronym on it. What was your acronym? FIL. Very– well, simple enough. Yeah, right? Phil. Although I did know a DVS. You mentioned devious earlier. There was somebody we
worked with who was DVS, and I think the OEX crowd. And it was actually
just the guys initials. But nobody actually
knew his name. Oh, wow. Yeah, just go by the badge. His last name could have
been Davis for all we know. Yeah. Yeah, I mean, it
could have been. It could have been. Was he a devious fellow? A Little bit, yeah. Well then it was fitting. Yeah. Yeah, I ran into him late
night a few years later after I had left the floor. And he was probably up to some
not-safe-for-air activities. Well yeah, I think
there was quite a bit of that at some point. Well, let’s see. Do we want to go into this? I was just– I think we have to. –thinking about that. I think we have to. I think we actually have to
have a graphic of a great pic. It’s more of a caricature. And I actually saw this picture. I was at Phil’s lovely house. And you’re in the washroom. And this beautiful face
is staring back at you. At first I thought it was
the likes of Paul Rudd, but it is actually yours
truly here, Phil Carava. It’s a great picture there. It’s a little uncomfortable
when he’s watching go to the bathroom, though. Yeah, super creepy, right? No, not creepy at all. But there is a
little quote on there we want to reference there. “I’ve hitchhiked twice in my
life, first in New Orleans and then in Paris. Both decisions proved to be
among the best choices I ever had.” There has to be a
backstory to one or both of those that may be
good for our viewing audience. Yeah, the first one
was in New Orleans. And it was innocent enough. We were coming out of a
late-night music show. And we’re out in the
middle of nowhere. And there is just–
this is pre-rideshare, so you didn’t have
anything but cabs. And there is 1,500
people spilling out at 2:00 in the morning
and five cabs around. So we ended up just
deciding, let’s try this. And a mini van pulls over. And it was a bunch
people coming out of the same show heading back
toward the French Quarter, Frenchmen Street, if you
know New Orleans well enough, or their live music. And they were just
screaming and chanting “The Wild Boys” by Duran Duran– told us to get inside,
offered us some cookies. As far as I know– Oh, boy. –they were just
chocolate-chip cookies, and ended up not catching my
flight home the next morning, purposefully. Wow. Yeah, so you know,
if I see you guys on another appearance at
some point down the road, if I haven’t just
stepped in it today, maybe I’ll tell
the other one then. So we’re going to have
to wait for the Paris– Yeah, so far– –story. –so good. I mean, I think– That’s good showmanship. –the Paris one– Yeah, you know, it’s– they
call it a tease in the business, don’t they? Yeah, they do. You know, always leave
them wanting some more. Yeah, or the George
Costanza, right? “Ca-stanza,” something like
that, it gets in your head, sticks there. Buy [INAUDIBLE]. Yeah, “Ca-stanza.” Yeah, that’s right– well,
keep us coming back, I guess. Yeah, well, why do we got
DarkSuperman saying Dan Marino? I’m not sure where he’s
coming from with that. Is he trying to say that
Phil looks like Dan Marino? No, I think that was back
on the 1983 football draft. Oh, there you go. Yeah. There you go. There were six
quarterbacks drafted in that first round that year. And he was the
sixth of the group. So your Hall of Famer
went last out of the– Wasn’t he, like– Wow. –partially blind in one eye? Am I thinking of that– That’s Jim McMahon. Yeah, that’s true. Yeah, wrong guy. That’s why you always wore
the sunglasses, right? Jim McMahon, for that reason,
always wore sunglasses. Yep. All righty. Well anyways, well, let’s
take a look at our positions. I’d like to rub something
in from last week. It looks like I– Yes. –did win the
breakfast sandwich. You did, you did. It was a promising end for
me, but we took a dive– Let’s take a look at it. –after the end,
and then ended up getting stopped
out on your side. Yeah– well, look
at the order there. I think I’ve got to go
eight days back for that. Is that right? OK, let’s see what
happened here. It was– we had a– we put a– Let’s see here. I’m going to expand
that a little more. Did we go– we went short. Stephanie and I
decided to go short. You wanted to go long. That’s right, I did. We put the entry in. And then we got filled after
the broadcast was over. And Stephanie was all over it. She messaged me
right after that. She’s like, oh, we just
got filled [INAUDIBLE].. And I was like, yes. I thought I was– The first one is in the books. –going to sneak
the first one in. I think we got up to, like,
[? 28 ?] [? 91 ?] and then decided to turn around. Yeah, then we talked. And you said that, if
you would have won, you would have never
let me forget about it. I said two years, if I
recall correctly, two years. You said a couple of years. So I guess, technically,
two is a couple, so OK. All right, you’ve
got you get two years I’m going to give you. So I’m still glad we got our
first trade in the books. And it was a winner. Yup, we did. And then we also had another
winner in this put spread here. Yeah– here, let’s go to that. Oh, we don’t need that guy open. We’re going to go
to our monitor tab. And here it is right here. So since we went
short on the futures, we decided to do a vertical
put on the long side, long. So it’s a bullish play. It’s a short put spread. And it looks like it’s
working out right now. Yeah, absolutely, we’re up 437. You can see in the P&L
open on the right side. We just want to close
this guy out, no? Well, yeah, we’ve got
zero days on there. And with this being
a futures contract, we don’t have any buyback. So we could save on
commission if we did it, let it expire worthless,
which I feel with 29 29, you could think that’s probably
going to expire worthless. So you wouldn’t buy the
short leg back here? We could. I’m not against that. And I’ve used– I mean, you know, some people
use that strategy quite a bit. But you’re keeping on
kind of a lottery ticket on the long side. But with the
futures, you know, it is a little bit different rules
as far as the commission goes. So that’s something
to consider too. How about you, Phil? Do you like to, when you
have these winners possibly go your way in a
vertical, you just like maybe close out the short? Or you kind of close
out the whole thing? Admittedly– and I don’t
trade a ton of futures myself. But when I put on a
vertical like this, if I’m short in a
credit spread, I’ll oftentimes just trigger that
buyback order on the short leg immediately when
I open the trade. So not to say that you
need to listen to me and buy those five
in, but generally, I’ll play things that way. I think we should. All right, let’s do it. Do you want to buy it in? Let’s take it off. You’ve got it? Taking off risk. Or do you want me to get it? No, no, go for it. Go for it? OK. So creating closing order– I’m just going to bring
up that order ticket. We’re just going to buy
that one back for a nickel. All right, let’s go get it. All right, the thing that’s good
about these is, now we still have– oh, did that get filled? No. I’m going to look
at the option chain to see where that one’s that. What strike was that? That was the– do you
remember off, Bill? [INAUDIBLE] flip over. 2880. It’s 7580, right? So 2880 put? Mm-hmm. OK, well, let’s just go
to All and scroll down. Getting a lot of strikes
in the [INAUDIBLE].. Tons. 2880, passed it again. There it is. Oh. I think we should be getting
filled on that, right? Well, let it work. See what– Yeah, we’ll let that one work. [INAUDIBLE] I’m sure that one will
close up eventually. Yeah, taking [? off ?]
[? risk ?] is never a bad idea. I mean, well– No, I don’t think so either. I don’ think so. Well, and you
mentioned it earlier. We haven’t seen a
tweet in awhile. And I know we’ve only
got a couple hours left until these are done. But call it a lottery
ticket like you did, Bill. Those things, every once
in awhile, you’ll cash one. Yeah, that’s right. It might only be a
scratcher for $10, but you know, if
something comes out and the market drops 80
points, [? still take it. ?] It’s good to have that off. A friend of mine actually had
something like that in Boeing. He had a short put spread on. He took off the short leg for,
like, $0.04 right at the close. And there was some big news
after the market, boom. He was right there. He made, like, $4,000 just by
having that worthless option just work for him. It doesn’t always
happen, obviously. The odds of that are
probably very slim. But when it does, it’s
just, it’s a freebie. Well, we had a similar
situation in ULTA last week. Well, they had earnings. And big surprise there, they
were down 30% in one day on a high-value– Yeah, huge move for [INAUDIBLE]. –stock– enormous move. Yeah, and if you’re making
an earnings play like that, obviously, that lottery ticket
cost you a little more premium, right? Right. There it is. So you know, you take a
case like what we just did, I like it, because we paid
for it with profit already. So in that case, we’re
really just taking a little slice off the top,
obviously, to lock it in, so I’m willing to pay for that,
and also for the opportunity on– where we are at
right now, 29 30-ish? Mm-hmm. Yeah, ish, yeah, 29
30, yeah, exactly. So you know– There is the move in ALTA– –50, 60 points. –just totally
hammered on that one. Yeah, wild. Was that earnings? Was that an earnings Thing? That was. Yeah, that was. Yeah, that’ll do it. Big surprise there– I mean,
if you even go to a day chart, that’s extremely dramatic. Right now we’re on
the five minutes. Just you’re saying
for today, or? No, a one-day frame,
one year, one day. Oh, I got you. See, you look at that. Wow. Yeah, so I mean– It’s like a rock
falling off a cliff. And just like Phil
said, you can have a boost, an implied volatility
going into an earnings. So that is going
to cost you more, buying the wings on
something like that. So after the [? VOL ?]
crushed, that might not work out so well. But you know, on something
like this, obviously. Such a big move. That would have been
the right move, yeah. Yeah, I don’t see how
you could almost– I mean, every put, or
a lot of those puts were increasing in value. I think they went through
the lowest strike put. And the stock actually
went down below at the lowest strike
put that they offered. And they had to add
new strikes, obviously not foreseeing a
huge move like that. So let’s get into
some option stuff. Last week we talked futures. This week we can get
into some option stuff. And a common question
that a lot of people ask is, you know, if you’re
new to options trading, where do you start? I mean, obviously, you’re going
to learn what a call or a put is. But when you’re actually
looking to put on a trade, what kind of stocks do
you kind of look for? Last week, Stephanie
mentioned, you know, we asked her the same
question about– this is Stephanie Lewicky. We asked her about, if you’re
trading futures, what would you do? And she brought something
up, very interesting. She said, look at one
product, and kind of take a look at that, and
kind of become a guru in that particular product. Don’t try to be necessarily
a jack of all trades. So when you’re looking
at a lot of these, I think liquidity is important. Bill, what do you think? Absolutely. I think liquidity is
something you want to look at. You want to be looking at
the spread of the options so that you can see
if you’re getting a fair price in between. And you also want to
look at open interest. Open interest is something
that will tell you how many contracts are out there. It’s a good predictor
of liquidity. When you’re trying to
enter or exit the trade, you don’t want to be getting
picked off on one side and getting just not even value
on one of the entry or exit trades. Yeah, I agree. And this here, I have
Apple up on the screen. I mean, this is always the
staple that people talk about. It really, it has
a ton of liquidity. And here is the things that we
want to look for for liquidity. Obviously, the first thing
that comes to my mind always– and this just might be my
market-maker mentality– is bid ask spreads and
looking at the width there. So look at these options. Here we have the at the money. This is the monthly. It’s only– it’s a dime wide. If you look at the underlying,
penny wide pretty much all day long, high volume. It’s looking at
heavy open interest on the at-the-money strikes
and heavy volume as well. Right, exactly. I mean, Apple is going
to be very liquid, where even, you know,
$0.05 spreads there. But that kind of brings me– Phil, what were
you mostly focused on when you were
down on the floor? What were you doing? I was in the equity pit. So you know, it wasn’t
anything, any kind of a high flyer like Apple. But I bounced around
early on in my career when I was with a
bigger market maker. And you just kind of go from
pit to pit on a given day. And it might be the
IBM pit one day. And it might be– back then, the AOL
pit was hopping. If you could
believe that, right? Yeah. Yeah, definitely a
sign of the times– I haven’t heard that in awhile. Yeah– Did you get a lot– –AOL. –free disks, a lot
of free-trial disks? Oh yeah, as soon as you step in. Yeah, they just hand them
out in the pit, I’m sure. They pretty throw them
at you like a frisbee. Yeah, those used to– What was that,
the download the– –flood my mailbox. –AOL software? Was that what it was for? It was the free trial. Was it on a floppy? No, it wasn’t on a floppy. It was all the CDs. Oh yeah, that’s right. You’d get one in the
mail every seven days. Yeah, I mean, your
grandparents still probably have one laying
around somewhere, right? Are you kidding? My parents are so
far behind the times, they’re still trying to
work their VHS player. Well, that’s pretty bad. I would imagine that they, if
they do have an email address, it is AOL, though. Yeah, I think that you’re
actually right about that– wow, AOL, wow. But so when you
were filling orders, would it be– were they
doing spreads at all? Were they doing
just single options? What did they work with, really? Yeah it was a
combination of the two, I mean, a fair
amount of spreads. And it could be anywhere
between a one lot, 10 lot, or thousands of
contracts at a time, in which case, you know, they’d come in. And they’d quote a spread. And this was back
before things really went hybrid, where it was also
electronic at the same time. So it really was
just floor traders. And we even talk
about Thinkorswim, I say this to clients a lot. Obviously, this
piece of technology is far and away better
than anything we ever had on the trading floor. It really is. And it would’ve
been a game changer if you had access to something
like this at the time. And at this point,
Thinkorswim is 20 years old, which is crazy to think. 20 years old–
yeah, I mean, this is just about everything
you need, you know, [? know ?] value and kind
of where you’re getting in. We could see [? THEO ?]
prices if we pulled it up, all that kind of thing. [? MikeTheEngineer ?]
just followed us. Oh, [? MikeTheEngineer. ?] Welcome, Mike. We appreciate it, buddy. Sorry, go ahead. Yeah, so this is, like, key
information for trading. And something like this,
the market usually, usually, will tell you
where fair value is. Like, if we look
at the 210 calls, we’ve got 440 bid at 445. Value is probably going to be
somewhere in between there. But you know, if you’ve got a
wider more illiquid symbol– Want to bring one up? Yeah, let’s take a look at– This one was brought to my
attention earlier today. And remember, now we’re
bringing up these symbols. We’re not saying you
should trade them. We’re not saying you
should not trade them. But we’re showing you what an
example is of a liquid product. And here is an
example of something that is a little less liquid. Now, the underlying in this
is even tighter than the one we were looking earlier. We’ve got a 1075 bid
at 1079 right now. But look at those options. [? AGooCesco1 ?]
just followed us. Sorry, it took a second
for me to process that. And we have– [? DaTrader ?]
said, speaking of AOL, have any of you– let’s
see– have one of those email addresses, perhaps someone
on the production team? Yeah, it looks like– I think our producer
[? Obie ?] does. Oh, he’s saying
he does have one. Staying strong with the AOL. Yeah, wow good for you. Old school. Yeah, really hanging in there. Keep that. Keep that handle. Do you love AOL? Or do you fear change? That’s the question. You’ve got your
first email in there. Do you still have it? Do you still– Oh, he’s sentimental. Was it from– He’s sentimental. –AOL Like, welcome to AOL. You’ve got mail. But yeah, so getting back to
[? air ?] gain we’ve got here– this one. I mean, if you look at
that open interest column, the majority of them
have a zero in there. This is the at the money. That would make me a little
worried getting in or out of the trade at fair value. And that’s liquidity, right? It’s the ease and ability
of getting in and out of the trade. And with stocks like
this, sometimes it’s hard. Like, when I was
looking at this earlier, actually the underlying
was a quarter wide, which is a big spread for a stock. And then when you’re
looking at the options, for you to not be able– you kind of have to
know what you’re doing. So let’s take, for example,
the 12 and a half put. We have to know
what that’s worth. [? 12-112 ?] just
followed us as well. Thank you, [? 12-112. ?] So we
have to know what that put is worth intrinsically in order
to be able to price it. You don’t want to
be buying that thing or selling it
intrinsically worse than you can get it in
the underlying stock. So for example, what you do
is, you take the 12 and a 1/2, subtract 10.75. And that’s the intrinsic value. So you know that put’s
at least worth that much. And so what does that math
come out [INAUDIBLE],, $1.75? $1.75, yeah. OK, so you know it’s $1.75. By looking at the
calls too, we know that there is a little
bit of premium in there too, maybe $0.12 or so. And I’m just going
off the halfway point between the bid and the ask. So we can take $1.75, add
the $0.12 of premium on. It comes out to– what,
what is that, $1.87? Am I doing the math
right there, $1.87-ish? Right. So that’s kind of
how I price that. That’s how I used to price them
on the floor, looking at that. But again, though, this
is a hard to borrow. So those can become tricky. But there is not that
many days to expiration. There is only 16 days in there. And that’s something you want to
consider too, if you– how many days until expiration. If this is– you
know, you don’t want to take the assignment
or exercise, you are going to have
to be getting out. So taking that and knowing that
you have these wide spreads, you could maybe work
something a little earlier in anticipation of having
a hard time getting out. Sometimes you just
may not be able to. We’ve got DarkSuperman. He’s asking– DRKSuperman. We’re going to call him Dark. OK. Yeah, I was informed
that we’re going to go with dark on that
one at the last show. Well, I’m great with that. Yeah, so DarkSuperman is
saying, how often do you– how often are you getting
into the Analyze tab when you’re going
to get into trades? How much is just knowing off
the top of your head the info that you know? Well, I mean, I
think that, like, for me, just knowing,
like, verticals, you know, I’d know some of
it off the top of my head, but I use the Analyze tab. How about you, Phil? Yeah, I think once you’ve
get the experience down, and you know what your profit,
and loss, and your risk potential might be on
something like a vertical or any other spread. Maybe you’re not
going over there quite as much as is in the past, but
I always recommend, especially for anybody trading
spreads as a novice, until you get comfortable
and you know it second hand, get in it Analyze tab. Visualize it. Put it in there
before even place the order as a live trade. And all it does is
reinforce it in your head. You’re going to get
it faster and sooner the more you see it that way. So you know, maybe you’re not
a right-brain visualizing type learner, but I think
it always helps. I agree. And if you’re building it– I mean, spreads can be a good
way to start out as well, because they’re defined risk. If you’re selling an
option or something, you’re not going
to be defined risk. Buying an option will
be defined risk, though. But you can often get
a little bit of safety, or at least know your parameters
when you’re doing the spread. Speaking of which, maybe
we should build a spread. And you want to take
a look at Apple? Yeah, for sure, we can
take a look at Apple. You good with that, Phil? Yeah. You OK with Apple? Or have you got any specific
ones you want to look at? Apple works. I think you know, well,
you mentioned it before, how do you know what to
trade or where do you start. And a lot of times you do say,
like Stephanie Lewicky said last week, trade what you know. And if you have an
interest in these products and you follow their
announcements each September, and when the new
phone is coming out, and what’s going on digitally,
yeah, just stick with it. Right, that’s why we see– you know, you’ll
see a lot of people who only trade one or
two, maybe three products, because they want to
be up on all that. That’s a backhanded comment
there from the chat. Well, CMG, so
that’d be Chipotle, I am a fan of their product. I’ll definitely say that. Yeah, me too. Big time– Not a recommendation, but I do– Right, I’m doing my part
as far as that goes. Yeah, well, bolstering the 800– is 800 now the stock
is trading for? 835. 835, that’s incredible. That is quite the rally. Yeah, that’s a 52-week high. Yeah, look at that right there. No more E. coli worries, right? No. You’re just getting in there,
getting your burrito bowl? No, I never stopped. [LAUGHTER] I was just like, take my money. I never looked back. I had it once. I never looked back. Let’s see if these are liquid. I’m sure. Yeah, I’m sure they are too. Well, you know, it’s
also higher price stock, which sometimes you’ll
see wider spreads. And you know, look
at that at the money. It’s reasonable. [INAUDIBLE] 40, yeah,
on a percentage basis, that may be a similar spread. But in real dollar terms,
that’s a $70-wide spread on the at-the-money call. Right, well what’s
the difference Bill? I mean, why the
wider spread even if it’s an expensive stock? Who cares? Well, I mean, higher
priced underlying is always going to give
you a higher priced option. And if you’re going on
a percentage basis– you know, this is $0.60
wide right now on $15. That’s, what, just over 5%? Yeah. So I mean, that could
be a little bit– I think that’s standard. We could see that
somewhere else too. During, like, when Phil and I
started down at the exchange, and you would see huge,
huge bid-ask spreads. And a lot of that was
also due to the volatility and the liquidity
of the underlying. So we were looking at
that in terms of, OK, well we need a wider
bid-ask spread, because let’s say we were to
sell these calls in CMG at $18 or $18.10, a big client would
come in and buy those calls, obviously. So we’re selling calls. And then we’re buying the
underlying to hedge it. There is not a lot of
liquidity in the underlying. We could possibly, off
selling these calls, we could drive this, the
underlying, possibly 5 or 10 points. So you would actually
need those bid-ask spreads to enable to be able
to get your hedge off. So that’s the market
makers, like, mentality, and why they want the
wide bid-ask spreads. Yeah, and also
the risk behind it is a market maker,
because that could happen. And like you said, if you’re
trying to buy the stock and it keeps screaming up
because everybody who just sold these calls is trying to
buy the stock and hedge, all of a sudden you could
end up locking in a loser almost immediately
as a market maker. And so I know we love the
fact that, for retail clients these days, these spreads are
a penny wide, or $0.02 wide in a lot of liquid
products, but that’s because there is so much
stability in that underlying. Something like Chipotle,
there is a little bit of a bigger spread. There is a little less liquidity
in the underlying stock. So it stands to
reason, those options might have wider spreads. And it’s not to say that
necessarily a market maker is trying to rip you off. At some point, they need
to stay in business. And they’re going to assume
a certain level of risk. And then it’s just
a matter of, are you going to be able to
recoup some of that spread that you’re giving up when
trading those options? And things, obviously, can move. You’re going to
have wider spreads. When you have an $800
stock, a 1% move is $8. A 1% move in an
$80 stock is $0.80. So things can move quickly. And it stands to
reason that you’re going to see those spreads
kind of widen out a little bit. That’s true. And it brings up an
interesting point. I always tell
people– like Amazon, you know, people will be like,
wow, it’s a 13-point move. And it’s like,
well, realistically, it’s really a $0.13 move if
this thing is an $18 stock. So it’s really not– we
want to look at terms in terms of percentage points. [? DaTrader ?] is saying
he agrees with you, Bill. He worked there
during the break out. And he still ate a
burrito bowl every day. No fear, no fear. And he’s still here
to talk about it. That’s always encouraging. I’ve never had a bad experience. All right, well, let’s
get into a spread, OK? We can do a vertical. Apple seems to be where
we want to keep it. How about we go
out to next week. That way we can revisit this. There will be only
two days left. All right, well, let’s
take a look at the chart. Oh, I’m on the wrong thing here. Click the old [INAUDIBLE]. All right– yeah, I know. OK, so this is going to
be a shorter term trade. So we’re going to look
at a shorter term chart. Here is the yearly. Not much can really be gathered
for that going a week out. So we talked about
this last week. If we’re going to go
short term on the trade, we should look at
a short-term chart. Actually, you pointed it out. And long term trade,
we’ll look at a long term. What do you want look at, Bill? Let’s do a 15-minute, five-day,
15-minute, about the week time frame about what we are
pondering of putting on here. Interesting level here. Yeah. It looks like we’ve done this
before in the last five days. Yeah, it’s kind of
oscillating a little bit. And our high is 211. So looking at that,
it could break out. We may see some resistance
at the 211 level or even right where we’re at. So that’s the long way
of saying you don’t know. Well, I never know, is
the thing, you know? I mean, not that I can gather
anything from this, either. I’m not an expert on that. That’s for sure. Right, so I mean, if
we– let’s take a look at some of the
premiums we’d get too, because that’s
something to consider. So we like the maybe 211. 212 half is our next strike up. And would you want to go long
or short, like a long or short the spread? Well, I don’t know. And then you don’t know. Phil, do you know? Of course not. We might have to ask
the chat to– maybe we’ll ask them to see if they
want to put on a bull or a bear play. So we’ll give the chat some
time to respond to that. You guys in the
chat, if you want to put on a bull play in
Apple, put bull in there. And if you want to put on a
bear play, type bear in there. And then we’ll take a vote. And also, so we’ve got
28.66 implied volatility. Yeah, let’s go back
the implied volatility. So implied volatility,
how would you explain implied volatility, Phil? It’s basically going to be what
the supply and demand dictates when it comes to
pricing options. And we talk about that
example from earlier. Let’s say there is a
big buyer of an option and market makers
are selling it. And what are they going to do? Are they just going to keep
selling it at the same price? No. There is demand for that
particular strike, or maybe multiple options, or even a
different strike in that name, so they’re going to move their
implied volatility up ever so slightly, bump the
prices up, so that now, as they go to sell
some more, they’re getting a little
more premium for what risk they’re putting on. And obviously, they’re going
to move that back and forth. So implied vol is
then obviously going to try to be an indication of
what potential movement there could be in a stock. We were looking
earlier at the one. And it caught my eye,
because you were looking at– I think it was AIRG, where
if you look at the implied vol on that one in
the front month, 81, whereas the other month,
the back months are 50, 60-something. So that’s telling me there is
uncertainty in the marketplace. There is a premium built into
the price of these options because people are paying
for the possibility that stock could move up or
down in a greater percentage than it might normally. And so what is that? Sometimes it’s an indication
of earnings coming up. Sometimes it’s an indication
of some sort of news pending. If it’s a biotech,
maybe there is going to be an FDA approval
or denial coming up. And so that the
implied vol could be for a number of
different reasons, you know, the reason
it might be inflated or deflated at a given time. But to me, it’s really all
about what kind of premium you’re having to pay for
the right to see a move or lack of a move in a name. Yeah. I think that’s a good
way to boil it down. I couldn’t have said
it better myself. I love the supply-demand
factor that you kind of threw in there. And it really is that. It was really– I guess a
market maker was the only way to control the price movement. You can’t adjust interest rates. You can’t adjust, you
know, the strike price you. You can’t adjust those things. But as a market maker, you
can adjust implied vol. So we do have some votes as far
as what to do in Apple here. And everybody is going with
“Da Bears,” because we are– their debut, their season
debut against the Packers is tomorrow night. So everybody’s saying bear. I love that play. Yeah, this is–
we’re in Chicago, if you couldn’t have guessed. Yeah, we are in Chicago. Yeah, I don’t think we’ve
ever mentioned that. Well, we did say that it was
the Chicago trade desk manager, but that’s about it. And I think that,
the other than that, we’ve never really
mentioned that we’re here. We are in Chicago. You’re a big Chicago sports
fan, are you not, Phil? I think the whole crew
here tends to be, right? Yeah, [INAUDIBLE]. Don’t we have a picture of
something like that too? I don’t know. We might have dug something
up out of the well for that. Wow, that was smooth. And there we have it. There is Paul Rudd– I mean, that is Phil, our
own Phil Carava there. It looks like– where
are you at there, Phil? Is there a story
behind that one that might be PG rated for the kids? Yeah, there is an establishment
out the back of the bleacher gate at Wrigley Field up on
the north side of Chicago called Murphy’s Bleachers. That was a Sunday afternoon. I forget if that was– I don’t know what year that was. But the story goes that
a friend of a friend knew somebody involved in
the production of a video that they wanted
to make for a song that Eddie Vetter, a huge
cubs fan, had written. And they needed some
extras to sing along to the chorus in the video. And that’s what that’s from. Oh, that’s right. There was that Cubs thing he
came out with a few years ago, right? Yeah. Wow, wow, you’re kind of famous. Yeah. Yeah, I like it. That’s good right place
right time, I think. That’s what that was. I lived about three blocks
from there at the time. And I had nothing to do
at 1 o’clock on a Sunday, so I got the [? show. ?] Yeah, nice. Well, that was a good choice. And now that you’re
on Twitch, you can tell all your friends
you’ve officially made it. Exactly. That’s the limiting
factor for it. Although, have
you really made it until you’ve had some trolls? I don’t know if I’m getting
trolled as we speak here today. I can only– I’m sure that– I can only hope the
comments start pouring in, because it’s no fun otherwise. Yeah, no trolls yet. I don’t know if we should
be encouraging trolls, but you know– nice. Well, there is two ways we
could put on a bear play, right? We could sell a call
spread or buy a put spread. What are you guys thinking? Well, last week
we sold a spread. That’s true. [INAUDIBLE] We sold a spread on [? ES. ?]
I say we go for a put spread. Yeah, all right, so we’ve got–
we have an option chain here. We’re going nine days out. OK, so we’re going to do– we’re
going to take the bear side. What kind of point move
you guys want to look for? obviously, we’ve we got a
pretty significant one today, almost 2%, 339 in
the underlying. By next week, what do we think? I mean, are we thinking maybe
a five- or seven-point drop? Yeah, let’s– I mean,
we’re up 339 today. If that’s in any indication
of how we’d be seen even playing a little bit more
conservative over a nine-day period, we’ve got, what,
five trading days until that? Seven trading days, excuse me. Yeah, I think that’s fair. You know what we can do? Let’s price some of these out. Let’s see what the
200 197 is going for. And then we’ll kind of
work our way up and see what they’re kind of going for. OK. All right, so we’ve
got this one here. This is the 200 197. It’s a 2-and-1/2-point spread. So the most that could
ever be worth is 2 and 1/2. We can buy that one
for about $0.31 there. Now we’ll move up
to the 202 200– paying a little
more premium there, obviously, because
it’s closer to being the money, $0.43
on the mid there. And we’ll go up to
the 205 202 and a 1/2. And is this the way
you guys kind of do it? Do you guys price them out
a little bit like this? This is kind of how I do it
when I want to decide which one. Yeah, I kind of work
a ratio in my mind. You know, it depends. A person could like
doing it this way. Another one might
have a distinct idea where they think it’s going. And then a lot of times
you want to build a trade idea off a hunch or a
researched idea that you have. You haven’t gotten
trolled, Phil. But you get the first compliment
on your hair in the chat. That train’s never late, so
you can dismiss that one. That’s too easy. The hair has gotten better. It is great. And there was something in
this article here, actually. It says is your claim
to fame is twofold. You’re a daredevil
and legendary hair. I can concur with that. Agreed, agreed. So we have this spread here,
205 202, midpoint is $0.60. So we went from 30 to 44-ish. And now we’re at, like, 60 here. And maybe we’ll go up one more,
207 205, see what that one is at. That one is 80. Another thing I
always look at, you want to see what
the at the money is. Sometimes there is
a premium for these. Let’s see what the
at the money is. It’ll be around here, 210 207. OK, I mean, theoretically,
if the stock is halfway in between these
two strikes, it should be worth half as much as the
spread can ever be worth, which is $1.25. Right here, I think we’re
pretty much in line, because we’re more towards the
high point of the spread here. So I think these are probably
pretty fairly valued as far as that goes. So what do you guys
think about this? Phil, what do you think there? Well, I was looking
at the same thing. I was just kind of pricing
them out in my head. And I think because
we’re buying the spread, obviously we’re really buying
what is potentially a wasting asset, right? If Apple doesn’t
drop at all, we’re just going to lose the
entirety of the premium. So I don’t know. Do you say, I’m not
comfortable with dropping $1.20 on something that could go to
0 if it just sits here or even goes up? Or would I rather just
go a little further out of the money, figuring, all
right, if Apple does drop, I’m comfortable with it
maybe move in 5 to 10 points. I don’t have to quite put
out the same expenditure. And then, obviously, my
ROI is a lot better too. If I’m only spending
$0.60, $0.30, I would probably go a couple
extra strikes out, but– Yeah, I agree. –you know, I obviously haven’t
done any technical analysis. I haven’t looked at what
I might think that move could be realistically. I’m not even
thinking about what’s the standard deviation move in
Apple over the next seven days. So there is a lot
of other factors that, if we had a little
more time, we could get into. Yeah, no, I agree. As soon as we get to those
at-the-money strikes, the price just really spiked up,
so I’m thinking somewhere down the 202 strike-ish. We can go the 202
200 or the 205. I would– yeah,
let’s do 202 200. OK, we’ll put that one again. That was at the $0.40 one? That was right
around $0.40, $0.44. There you go. So that gives it a little
bit of time to move. And I do want to analyze that,
because there is something– I love the Analyze tab. –I want to point out. Me too. I love it. Let’s make sure–
well, you know what? I should– I’m going
to start that one over. I want to make sure there
is no other simulated trades in there. So when you guys
build these, make sure that you’re looking
at the right things and there is no other
simulated trades in there. This is just for
a one [INAUDIBLE].. Want to take us through– take it through us, Bill? Yeah, so we’ve
got the teal line, which is going to be our– teal, did you not like that? I think it’s a teal. It’s blue, I guess. It’s good enough for me. We’ve got a teal line to show
where it will be on expiration. And we’ve got this
purple line which shows us essentially
where it’s going to be if it were to move there today. And as expiration
comes in, those two will slowly meld
into each other. And when I say that, I mean
that the purple is going to meld into the teal line. Melt? Meld. That’s good. Is it M-E-L-D? I said M-E-L-D. And I’m
going to stick with it. OK, I like it. We’ll fact check that
one after the broadcast. But going back to what Phil was
saying, having not much time, we’re going to be
seeing some time decay. It’s a decaying asset,
just like you said. And that’s going to be
represented by the theta there. If we take a look
at the price slices, we’re going to be
seeing that our theta at this current level– What do you want to
set them to, buddy? Let’s just– any
of those will work. Let’s do– You want to do this guy here? Yeah. OK. So the middle line
where it says 209.20, That’s going to be our
underlying right now. And we’re going
to see our theta. So right now, our theta
is not that dramatic, but that could get a
little bit more dramatic and will get a little
bit more dramatic as time decay runs out. So right now, it’s $1.74. So one spread would
cost us $1.74 to rent, is kind of how I
like to think of it. Yeah, and then of
course, with a vertical, if we’re buying the vertical,
the most we can lose is what we pay for it. So that’s why you’re seeing
on the teal line, right– and that’s, if it goes
up, we lose money, because this is a bear play. So the most we can
lose is that $0.42 that we’re potentially
going to pay for this. How do we know what we
could possibly make? Well, we take $2.50
minus the $0.42, and that’s going to
give us the other side. And that’s the $2.08. to answer DarkSuperman’s
question from before, when you get good
enough at these, you’ll be able to do
them all in your head. But you know what? Either way, I think
it’s always a good idea to cross-check with
the Analyze tab. Absolutely. And one thing I’ll
always look at is, let’s say you
get to the point where you don’t need
to come and reference this just to put on
a vertical like that, you’re going to
have some losers. Bill, I know you’re
famous for them. So what then you can use
the Analyze tab to do is say, all right, maybe
I’m going to roll something, or maybe I’m going to
tweak or adjust a position. What’s it going to look
like coming out of that? And that’s where you can go
back to the Analyze tab and say, all right, now I
want to see what simulating this trade on
top of a current position might mean for me. And so that’s
another way to use it as a kind of 2.0 or
next-level teaching tool. Yeah, for sure, that’s one great
thing about the Analyze tab. You can add simulated
trades to it, look at what your
position is now, look at what it could be after. And also with– sometimes
you have weird spreads that aren’t quite as
easy to interpret. Maybe you got, like, a
weird ratio or something. And that’s always–
this is going to be a helpful tool
for that as well. I think it’s also good
to always just have your shapes memorized, because
like, when you look at this, well I mean, you should know
just by looking at this, this is a bear vertical
It’s get, like, that z formation, you know,
with the downside, obviously, and the plus category,
and the upside, obviously, and the
minus category. So you should know your
shapes as far as your risk graphs are concerned. That’s always a
good one to look at. Yeah, and that’s
buying a put spread. You should know selling
a call spread is going to look the exact same. They say that you love
out-of-the-money GE calls. Is that true? Not that I’m aware of, but you
know, not knocking if you do. I think you’re getting trolled. Ah, yes, the trolls are out. You are officially trolled. All right, let’s go
back to the Trade tab. How many of these do
we want to put on? Let’s do 44– our last
risk [? portfolio. ?] [INAUDIBLE] Let’s do 10 of them. You want to do 10? $0.43, so that’ll be $43. OK, that’s going
to be a day order. All right, so we’ll put that in. We’ll go in on the midpoint. And remember, putting
these in on paper money is not necessarily reflective
of what it will actually do in live money. All right, so we’ll
put it in at 42. We’ll let that one work. And we did get a fill. Yup, we did get a fill. And something I
wanted to point out is, so when you’re
doing two options, you’re going to have
more transaction costs, because there is
a per-option fee. That’s true. That’s something to
always take into account. Now, spreads are great because
they are defined risks, but commission can
play a role, especially if you’re doing something
that’s got lower premium and you’re trying
to collect premium, your commissions
can eat into this. This, we’re paying a
little bit, so we’re adding on to the costs, but
it is something to consider. We do have that one on. Now it’s– I think it might be
time for our breakfast sandwich bet– Oh, is it? –get into some futures. All right. Do you want to just sling one? Or do you want to
do something else? Yeah, let’s do one. Yeah? OK. ES? Yeah, yeah. [? CRU, ?] ES? OK, maybe next week
we’ll do [? CRU. ?] OK, so we’ve got a couple
minutes for this to play out. So is there any particular– well, let’s take a
look at the chart. Let’s see where we’re at. We’ll take a look at inter-day
and kind of see where we’re going to go from here. This is just during
the trading day. It looks like we just
recently made a new high. So what are you thinking
there, Bill, bull, bear? Phil, you’ve got any
thoughts on this? I’ve got to go bull again. You’re going to go bull? Mm-hmm. Yeah, I was thinking the same. And you know, I hate to do that
with the Bears game tomorrow night, like you mentioned, but
we do have the Bulls in town here as well, so that’s fair. Nice– well, then I’ll
go with “Da Bears.” We’ll keep it real
as far as that goes. What did we do last time? We did micros? We did do micros on this one. Yeah, and we did,
like, five lot. We did a five-lot micro. OK, so do you want
to stick with micros? Or do you want to go
to the [INAUDIBLE]?? We’ll just do the [INAUDIBLE]. Let’s do micros. Let’s stick with it. We’ll go to the MES, OK. I’m just going to simply
enter in the MES there. It’s nice to have someone
on my side this time, Phil. This is good. I was feeling pretty
lonely last time. Stephanie was
definitely on my side. They doubled up
on you last time? Yeah. Yeah, was tough. It was tough. I survived, though. All right, so I think
I accidentally just put in a working order. We’re going to just
cancel, replace it. And you guys said you want
me to just go in and buy it at the market then? We’ll buy five? Yeah, but let’s set
up an OCO on there. Last than we had five handle. All right, first trade is OCO. Stop– This is how you build– –and limit. –these guys here. And notice, when
we’re doing these, we’re putting a stop in
there, a protective stop. Now, this is a stop market. There are two types of stops,
so stop limit and a stop market. Very good, Bill. We’re going to be using
the standard stop, which is going to be a stop market. OK, so this one is just
going to be a market. We’ll just– oh, let’s see, 20,
now, where are we right now? 29– we’ll say 35. Do you want to go– what did we do last time,
10 under and 10 over? [INTERPOSING VOICES] I think we did five
and five, if I’m– Was it five and five? –not mistaken. OK, so we’ll put
a stop above 2940 and then a limit below of 2930. Does that sound right? Mmm, yup. Am I doing that right? So this one is
going to be a stop. It’s going to be at 2940. We could actually do it
off the trigger price, but we’ll do that
maybe next week. Does this look right to you? It does. And it looks– Fire it? Yeah, go ahead. Always check the order
confirmation dialog here. Yeah, you definitely want to
double check that every time. We are doing micros. OK, so there is all the
costs associated with that. Boom, now we have that one on. Entry point was 2934. And I think we just had
a news story come out that could affect the ES. You’re kidding. Do you see anything? No. Let’s go to the news on the ES. OK. Do you want me to read that you? UK– OK, let’s see
what we’ve got. Let me just bring up the news
here and see where we’re at. Let’s take a look at. Right there, UK lawmakers– oh wait, it was on the main– What was that? It was the main feed, yeah. Oh, I’ll go back. UK lawmakers vote to delay
Brexit, halfway down, 1,351. Where are you at? Right there. Take the wheel, Bill. One lower, here we go. Let’s see if we double– Do you want me to bring it over? Yeah, so it popped open
on Anthony’s screen. There you go. When you double
click, you’re going to be able to get us
a larger news story. And if we scroll down,
voted Wednesday again to delay Brexit, frustrating
Prime Minister Boris Johnson in his signature
effort to take Britain out of the European Union. It doesn’t seem like the
futures are reacting too much off of it. No, I’m a little surprised. I thought there would be
a little move on that. I don’t know if there is a delay
maybe and people don’t see it, but I doubt it,
because that was, what, only about two minutes ago. Usually when stuff
like that happens, yeah, I mean, boom, you see
a big move really quick. Unless this was expected–
and I don’t know what the pound is doing. You can take a
quick look at that and see if that’s moving at all. Do you want to bring
that up, a pound USD? Is it GBP USD? USD. We’re not getting
into FOREX yet, but we’ll take a look at it. OK, so it’s up 1.2%,
yeah, the British pound versus the US dollar. And we’re seeing that
here on the chart, OK, so a little spike there. Yeah, a little bit of a spike,
so it could be positive. We’ll have to wait
and see it play out. I mean, we’ve been seeing
a lot of swings off tweets these days, too. So I guess I’m used to the
swing right off the news. Well, I don’t know. I’m not a big FOREX guy,
but is that a big move? I don’t imagine so, but
it is a move, nonetheless. Yeah, it’s– I mean, 1.8% is not
a monster, 1.18, but for FOREX, you could consider
that a solid move. Yeah, one day,
we’ll get into that. Today is not going
to be the day. Today is not that day. 6B– DaTrader is saying,
6B, that that’s– That’s the futures contract. [INAUDIBLE] It’s supposed to be
forward slash 6B. I’ll take a look at that– a
little spike there, as well. Maybe we should put something
on the British pound. We didn’t know. Yeah, I don’t know. I’ve never traded
the British pound. Neither have I. Yeah, I don’t– not
much currency either. I haven’t either. I haven’t delved into that. Eventually we’ll have somebody
on that actually knows what they’re dealing with that. All right, so we’ll
let that trade run. Yeah. OK, what else do we want
to look at today, guys? Well, we did a one-call spread. Why don’t we do another
one on the other side? In the same stock? Or do you want to
do something else? No, let’s do something else. OK, we could pick from our
watch list here, if you’d like. We’ve got a moving box. That’s a possibility– Constellation Brands, makers
of Modelo there, Beyond Meat. You know, haven’t had a lot
of news on Beyond Meat lately. No, that was a real
big move, a real big– that was a big hard to borrow. You were looking at
Harley Davidson earlier. Want to look at that one? Yeah, sure. Let’s take a look at that. That’s HOG. We’ll take a look
at the options here. We can put on a– do you want
to put on a vertical there? Yeah, so let’s– we
did a debit spread. Let’s try a credit
spread with the vertical. They’re at a very
similar risk profile. You’re looking at a
bullish or bearish? Bears– It’s up today, so
you know, premiums might be a little bit higher. Don’t go against poppa bear. Getting back to the
bears there, but– There is some great
stuff out there. They’ve got some
video with Bret Favre. And they’re kind of
giving him some smack. There is some really
good stuff for– Yeah, that’s right. I saw that video. That’s funny. All right, let’s
do one real quick. We are under the gun here. And then we’re going to check
back to our futures trade, try to predict a winner. What you want to do here, Bill? Well, we’re running
into the call side. Maybe we’ll try and
collect a little premium. Let’s just look at a spread. I don’t know. I’m looking at these premiums
and I’m not very excited. No. No, look at the 32– like, if we’re doing a
similar risk profile, we’ve got the 32 33 call
spread, only getting something like $0.26. Yeah, see, like,
options like these, when I see him that
cheap, I almost want to just buy spreads
rather than sell them, because if you sell
them, you’re just not going to get a whole lot. We could widen out
the width, though. Remember these, are
half-dollar strikes. Right, but looking at
this, I don’t know. Do you see much here, Phil? Especially not on the
sell side necessarily, because when you think
about the premium you’re going to take in– normally I don’t like to
worry about commission cost. And I think if
commissions are going to make me not want
to put a trade on, that means maybe it’s
not a great trade. And if the commission costs
might eat into that small little– you know, if
you’re getting $0.15, $0.20, how worth it is it to
you to put that on? Right. Yeah, right. And this is one of the things. You can look into
a symbol and think there may be an
opportunity here, look into the option chain
and see it’s just not right. Yeah, you don’t always
have to put a trade on. We did get [? DadRuby ?] from– [? DadRuby, ?] poppa bear. They need to work
on their creativity. Well, it seems to
run in the family. You stepped right into– This is true. –that one, though. Yeah, this is true. But thank you for following,
[? DadRuby, ?] whoever you may be. Yeah, I like it. Well, we don’t have to
put anything on in HOG. And sometimes the best
trade is the non-trade. I have a few that I
probably could have– I wish I could take back. –not put on. Exactly. Well let’s– want to
check back at our ES– Yeah. –and see how that’s going? Let’s see how it is. OK, we’re going to look at
ES even though we put it on the MES. The chart is still
going to look the same. It’s going down. Look at that. Is that going to be two
breakfast sandwiches? I don’t know. You’re going to be a very
full man one of these days. Well, I’m going to
be a very fat man. Well, that too. That’s not going to
be good for my image. Maybe we should just, like,
accumulate these over a month. And then there is a payout
at the end of the month. And then, like, if there is
10 of them or something– You’ll get 10– You have to buy– –breakfast sandwiches? Yeah, and I’ll just hand
them out on the desk. Well, that’d be– We’ll see. –nice of you. You’d be a Robin Hood,
a man of the people. Yeah, we don’t like
Robin Hood, though. That, I didn’t get. All right, guys, well,
we’re going to wrap it up. So the trade is looking,
it’s looking like it’s not doing a whole lot. Yeah, looking pretty
stable right now. We’ll have to wait
and see again. Yeah, let’s wrap it up. We want to thank you so
much, Phil, for joining us. We really do appreciate it. Yeah, we know you
have a busy schedule. We really appreciate
you stopping by. Not really, happy to
do this any time– when you guys at the bottom of
the barrel of potential guests, just let me know again. Yeah– no, I mean, we’re
hoping next time you just tell everybody that they have
to watch or they’re fired. I think that’ll get
our viewership up. I’ll check with HR to
see if we can do that. Yeah, let us know how that goes. Let us know. All right, guys, don’t forget
to watch us every Wednesday live at Again, it’s Just remember that
these episodes are archived to YouTube
directly after the show, so you can check out
that content there. There is also some
great education content on the website as well. Thanks so much again,
Phil, for joining us. Until next week, Anthony
Panzeca along with– Billy Ruby. Thanks for watching,
guys, so long. Thank you, bye.

One Comments

  • KRC R

    September 6, 2019

    Please nix the small talk and get down to the business of discussing trading strategies only, otherwise your wasting everyone's time!


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