hello and welcome to using options as a
stock investor my name is james boyd
today
is september 1st and yes it was a little
breeze it was a little chilly this
morning that's why i'm wearing the
little coat here
and i was 51 degrees this morning
hopefully wherever you are
it's not that cold we like to welcome
paul jill scott
leslie backyard garden bill gary
alfred ray tony and many others we
welcome you here today as we talk about
stocks and options
now remember my name is james boyd in
the chat we have
the barbara armstrong she lived in
toronto i lived in upstate new york so
we're just going to call it the really
the
the northern investors here today
invading the td ameritrade webcast
uh you can find barbara or myself on
twitter
if you're not on twitter you need to be
you're you're i was slow in
adopting twitter it's a mistake
there's some great things actually on
twitter if you haven't if you have not
gotten on twitter
get on it if you don't know how to ask
someone great
educational resources on twitter now
just real quick as we get started i also
want to give us a quick reminder that
with what we talk about today is for
educational purposes okay
we're going to talk about examples we're
going to demonstrate the functionality
of the platform
we're also going to use actual symbols
that does not imply that the
recommendations
they're examples and also remember that
any investment decision you make in your
self-directed account is solely your
responsibility
and i'll remember that all investing
involves risk including risk of loss
sometimes it doesn't feel like the
market has risk but it does
and you're also going to recognize that
as we talk about potentially and we will
options remember that options are not
suitable for all investors
there's special risk inherited trading
options make sure that you have that
pamphlet
really called the characteristics and
risk of standardized options and last
but not least when we talk about options
remember the option greeks
and when we look at two futures examples
here today
remember that futures and futures option
trading is speculative
not suitable for all investors there is
a uh
pamphlet as well called the risk
disclosure for futures and options
there's the link there prior to trading
futures products
by the way also futures can now also be
paper traded
on the paper money platform now just
real quick as we get started what are we
going to cover here today
so first off remember i kind of said
that you could follow us on twitter
i want to give us a quick uh update of
what is on twitter a lot of people ask
me
why would i go to twitter well so what i
actually do is sometimes i
i post videos this is of jenny horn she
talks about for example
amazon yesterday i also for example talk
about
zoom this is i posted this about an hour
ago talking about zoom in the pre market
where that stock was uh where did it
close
okay that was yesterday before the
earnings this morning
okay i showed the bid ass talked about
the gap
up in zoom and also you're going to see
that
also with that i talked about maybe how
would a stock maybe in the same similar
perhaps space
maybe with those stay-at-home stocks
like docusign
talked about that stock gapping up about
20 bucks
these are examples posted another video
by jenny this morning
because she mentioned a stock that's
been in the paper money account
called walmart they've been uh they're
launching that walmart plus
they said at the end of august but they
pushed it to september 15th
we're gonna talk about walmart okay and
also a couple other things as well
as we'll mention index and sector
returns and also
uh i also want to kind of make mention i
do
post some funny stuff from time to time
i did ask
would anybody be willing to call the top
on tesla today
since it was down a dollar okay so tesla
is educational but there's some funny
stuff as well it's also a way that we
connect offline
and we meet online okay through a
webcast so it's uh
some good stuff if you're not on it
today is the day
now what are we going to cover here
today so first off what we're going to
do is we're going to talk about let's
say
the indexes the market posture and top
down and relative strength okay we
always start there
number two we're going to talk about
last week's trade
follow-through okay and we talked about
last week using long verticals as a way
to try to get exposure to a trend
okay we'll follow up on that because we
do okay
and then we'll talk about the portfolio
update okay
we will also talk about hedging examples
and also with that we're going to talk
about new trade examples
stocks and options now what i talk about
tends to be very concentrated
so if you mentally drift for five or
eight minutes
you kind of get off in the weeds so stay
focused on what we're going to talk
about it builds
and some of the things we talk about
again they're very important
and uh so first let's actually go into
the s p
and we're gonna zoom in now from time to
time people ask me
how do i get this chart okay
this is a now we typically use two
different charts
this chart and someone asked me this
morning about this chart remember you
can go up to setup
open shared item and if someone said i
like the kind of the setting of that
chart
you can simply type in these letters and
numbers
it is case sensitive if you go to the
top right setup
open shared item and you could type in
those
letters and numbers and then walk
through those steps where it says
preview
and then import what it's going to do is
it's going to bring up a
small chart that really looks like
what we just did okay and you'll see it
has those moving averages
so i just want to kind of head that off
if someone's thinking about that
now first off let's kind of now go to
the s p
and if you take a look at the s p when
we look at the moving averages
and it's going so steep where you really
have to zoom in on it
okay by the way that's a good problem to
have okay you're going to notice that
the price okay is above
this is the shorter term moving average
the 10
and that lower moving average is the 20.
now today what
what yesterday what we actually said is
the price really aggressively went up
and it would not be unusual when you
talk about bull flags
let's say both flags maybe they go up
for a week week and a half
and then they kind of flatten or pull
back well
this price action lately went up for
about a week week and a half
and you're going to kind of see it's
flattening off we still see that there's
a green shade there where there's still
a trend okay but when the price gets
below that shorter-term moving average
there is a little loss of momentum
okay so it's not a downtrend but it is
maybe
just kind of consolidating some of that
recent
price move okay so the s p still looking
strong now
if we saw the price get down below the
20 period moving average
that would kind of be maybe more of an
example like here where there might be
stronger
selling okay we have not seen
either one of the moving average lines
turn red yet
not yet so the trend on the s p is still
strong
okay still gonna watch that now remember
which moving average is more sensitive
the shorter term moving average is more
sensitive the 10
and that 10 period moving average is
still that color of the moving average
line
is still green which is still saying
there's still momentum
okay now if you take a look at the
nasdaq not going to be too much
different
broken record here that everyone still
loves to play
is the nasdaq again keeping it very nice
and simple
showing up getting back above now by the
way
to kind of zoom in on this okay
to kind of show you how the color of
those lines work the color of the line
actually crossed there's the 10 period
moving average right there
okay when i say there it's probably on
the 15th of august
what you'll then actually notice is so
you're going to see that both of those
lines at that time
about the 15th of august they were both
green
remember the line that's going to be
more sensitive is a shorter term moving
average
in this period right there it's showing
negative momentum
a lot of investors don't like to buy
when there's negative momentum they like
to buy when there's bolus momentum
so investors like to see price at the
minimum
get back above the 10 period moving
average and if it does
that line turns green again and it's
when those when the 10 is
green when the 30 when that 20 period
moving average is also green
that means there's momentum and there's
a trend
since that date right there it's just
pretty much been one way
traffic beep to the upside and
it's been amazing it's been about thirty
thousand dollars in this paper money
portfolio
we'll talk about that in just a minute
this has been one of the stronger trends
we've seen
and if an investor has been trading
their thoughts
wow that that is very
hopefully they were good thoughts okay
but if they've been trading their
thoughts and maybe
trading based on how they emotionally
feel it's been a
very expensive lesson
okay i couldn't even imagine now if you
take a look at this
now let's go actually go to the vix now
if we take a look at the vixus real
quick
remember we actually said the vix keep
an eye on that we see that the
volatility
has been breaking out above diagonal
resistance now this is really
interesting because
remember a vix level about 16
means approximately that the s p
fluctuates about one percent think of
that as far as the volatility
so if the if the vix was at 32 that
would mean that the s p would fluctuate
about two percent about
so we're kind of right in between we're
about 26 it's about fluctuating on
average
1.4 percent volatility from high
to low so if we're starting to see the
vix increase
the market is just starting to now price
and maybe greater price fluctuation
greater price fluctuation doesn't
necessarily mean downtrend
it just might mean that instead of the
price is drifting so much to the upside
they might become they might become a
little bit more volatile
as some investors profit take okay
or number two some investors maybe buy
options
as a way to protect their stocks
let's keep an eye on that but volatility
at 26
and it's also gotten above that diagonal
level of resistance now let's take a
look at these numbers just real quick
uh let's kind of go back to this right
here so first off when we look at the
indexes something
i said on twitter this morning is you
know it's really awkward when you see
that the strongest
if we say if we look at indexes the
strongest actually bump was really the
vix
that's not normal okay that if we're
talking about
vixx was the strongest and the other
four
indexes were weaker okay
so that's not normal okay that you say
the strongest actually up moves were
vixx and if someone said the strongest
up move was vixx
and the markets were still bullish
that's unusual
okay and it is so vix 18
for the week and when you look at the
week it's really been nasdaq
and the s p now remember if we say
nasdaq and we say s
p that means three sectors mainly
technology discretionaries and probably
financials that are leading that push
does that mean other sectors like health
care can't perform well
not necessarily but it might be biotechs
that actually might be leading so when
we look at the sectors
technology there's your healthcare
and there's your discretionary so
remember when we look at ixv the
healthcare sector
that has healthcare let's say hospitals
etc
but it also has some biotechnology
that is also kind of maybe straddling
healthcare and technology so those are
the three that actually led and
after that there was a whole lot of
nothing
okay as far as sector returns it was
all concentrated in those three areas
all right all right
so now as we go forward here let's kind
of now take a look at uh so
some of the futures just real quick so
one of the things i did make mention of
when we take also look at gold and i'm
going to pull up for example
uh now there's two charts okay number
one we could actually bring up
forward slash gc okay
this is what we call the standard
contract for gold
and we actually kind of showed the
example on twitter kind of talking about
price patterns
they were educational examples we're
going to bring them up here we're going
to look to do a trade demonstration now
this contract is not what's called the
micros okay
and you're going to see that this is the
bigger contract we're not going to look
at this
but i'm going to show you the difference
so forward slash gc
and then if we actually just put an m
okay in front you're now going to see
that it
has a word called e-micro
so this is trading at a fraction or
smaller scale
to the bigger dollar contract now if an
investor said james
was such a strong move in the market
might investors maybe start to
shift what they actually buy might they
diversify
because if everyone everyone keeps
plowing in the technologies okay
it might become a crowded trade right
and that might actually cause that if
some investors get off or profit take or
get stomped out
might they change the position
that they're in now the first example
that we're going to look at here is
what's called
e-micro gold futures now these futures
if we take a look at these
these are for the december expiration so
like
options there's expiration okay
it's december 20th now what you're going
to notice is that's
that's the price for the gold contracts
for december it's up about five points
and what you're going to notice is each
point
is worth 10 dollars
so let's kind of take a look at this now
we we know in technical analysis whether
we're talking about stocks
we talk about options we talk about
trend momentum support resistance
and the same thing now applies to really
this example
so the technician might say james i see
a support there maybe about 1925-ish
another technician might say james i'm
looking at that diagonal
resistance and if we were to kind of
plot two different supports on that
chart
let me kind of mark that i'm going to
take the old resistance
and someone might say james i see
support being like 1959.
another technician says let's say 1925.
well let's say in this case that the
investor wanted to be bullish
gold okay now by the way is is this
a gold company type in the chat is this
a gold company
is this like aem or gold
or yamana gold barrick gold is this a
gold
stock company or what is the investor
trading here
what are they really trading they
trading is it a gold company are they
trading the price of gold
so this is now trading the price of gold
okay so now if the investor what we're
going to show in this case is
right click on the current price right
click on the chart
right click going to go down to where it
says buy custom
and go to where it says with oco
bracket now i just will try to
solo
body we don't talk about it i got the
bandwidth back
okay let's kind of wait for about 30
seconds
the bandwidth is actually back okay
looks like we're good had a bandwidth
issue let's kind of get it
about 30 seconds or so you guys will
actually hear me in about 30 seconds
okay and i'm just i'm giving it about 30
seconds i just kind of want to make sure
that everyone is hearing the audio had a
bandwidth issue
okay about the last five minutes there
was bandwidth
we're still talking about gold and it's
looking like the live feed and looks
like we're good
okay now let me go ahead and sync this
back up
okay good now let me kind of just recap
this trade as we're coming back online
okay so first off what you're going to
see
is this was the potential entry price
okay
that was the target which is the prior
high
now also what you'll notice is there's a
stop underneath
1904 so some of you might have not heard
if the stock goes if this in this case
gold goes up to the prior high
this would really mean in this case that
it would be about 900 dollars nine
hundred forty dollars
potential target if it were to go down
about eighty points each point being
worth
about ten dollars it'd be a potential
eight hundred dollars
now what you're going to notice is for
each contract
the commission there is 225
and now what you're going to notice is
the buying power effect in a margin
account
now what you're going to see is it's
really a thousand twenty three
okay so let's kind of show this example
and this is going to get a little
diversification let's practice this
now remember that it was actually filled
at 1984
20. so remember this is not
this this ticker that we're looking at
forward slash
mgc this is not a standard contract
it's an e-micro which means it's trading
at a fraction
of what the larger scale contract is
each point remember is worth a dollar
and now what you're going to see is we
have a target at really the prior high
and we have a stop underneath the low
so the paper money account is going to
look and see if it can't get a reversal
on that as far as price and again this
is what's interesting about this this is
not just another tech stock or no the
discretionary stock
if the market were to become a little
bit more volatile this
trade might benefit from that rise in
volatility now are there any questions
with that
yeah so what i did with the buffering
there is i kind of just held i sometimes
we know with wi-fi there's buffering
so i we're still on that same trade we
just kind of held
and tried to fight our way through it
now
thank you for that patience there now
number two now remember we were on that
gold
we had a little intermission with a
wi-fi issue but we're back
the only other thing i would say in
terms of precious metals when you look
at
silver it's also near the prior high
when you also take a look at palladium
it's also actually
well closer to the prior high than gold
is and also if you look at let's say
copper
it also hit a brand new high here today
faded off some high a little bit but
these precious metals as some investors
try to get diversification
they've been getting a bid so let's keep
an eye on that
watch the trends but we would say that
gold is
not hitting resistance
if we're talking about diagonal
resistance gold actually got above the
diagonal resistance
and now what we're going to now what
we're seeing is kind of price above both
moving averages now
if that trade is wrong there's there's a
stop
underneath support at 1904 okay
so now let's actually go forward let's
kind of now bring up the ex
trade examples that were done from last
week
now when we talk about the trade
examples that were done from last week
let's first kind of get mr obvious out
of the way well
one of the trades that was done last
week in this
class was crm
and the paper money account sold the
207 50 short put
well needless to say that expired
worthless okay
and that was actually sold uh it well
got a hundred percent of the premium
and now what you're gonna see is it's
popped up quite big
okay so that trade was done last week
that trade is over a hundred percent
number two trade that was actually
looked at last week
let's go take a look is really two
stocks well
we'll bring it up number one was amgen
and it was a long call vertical here's
where it stands
long call vertical is buying a call
okay and then selling a call
okay and that that was done last week
has four contracts
and has 17 days left okay number two
trade just want to kind of let you
follow through on this
is microsoft and the trade that was
really done last week was this one right
there
now let me actually verify that no
it was actually the october expiration
this one
so now what you're going to see is those
who are the trades were last week don't
have a whole lot more to say on those
because both of those are really still
holding above
a level of support probably the one
that's maybe looking potentially
a little bit maybe questioning maybe the
momentum
is amgen and then really number two
there
is really microsoft there where it's
sitting
on that lower moving average so
nothing there per se on those but i just
want to kind of follow through on those
okay now let's kind of take a look at
this as far as the next bullet point
which is the portfolio okay let's get a
quick update on this
so this portfolio if we take a look
before we look at some trade examples
this portfolio started off the the
beginning of the year at 175
000 okay and it's sitting at about
now where am i getting this information
it's sitting right now at about 258
000 okay so remember the last three
weeks have been really
big about 30 000 or so in about the last
three to four weeks
so if we kind of take a look at what the
balance is now
258 where it started 175
and what you're going to see in this
case this portfolio that is mainly stock
focused
and mainly just using options and we're
not talking advanced options we're just
talking about
selling puts covered calls not not
advanced options okay just stock
positions
and mainly just basic options year to
date it's about 47
now if we're talking about using
annualizing
as a means of comparison annualizing
does not
mean it's going to do that annualizing
if we if the investor kind of want to
see those numbers
that would really be about 74
if we're talking about annualizing
because we're not
all the way through the year that when
we talk about annualizing
it's really saying if the portfolio were
to keep going
at the same pace what could it
potentially that's the key word
what could it potentially be on pace
four okay
and the reason the biggest thing is we
don't know that yet can it do that
but actually i misspoke it's about 78
and the way the investor could get what
that potential
annual return might be if the portfolio
could keep going at the same path
remember we show this each week but i'll
tell you why we're telling you this in
just a moment after i write this out
we have 365 days in the year 245 days
have already gone by
and we just want to subtract that by one
that will give us the
annualized number guys and gals
professionals
know this stuff okay one of the things
you need to track
is year-to-date returns annualizing
those returns
as a mean of comparison of different
assets okay so that's why we keep
talking about week-over-week
annualizing okay it's a means of
comparison
okay now uh any questions on that
okay now by the way the paper money
portfolio has
about 54 000 of cash okay some cash
and it's really about invested about
well 200
000 of it so it doesn't have all okay
it's not fully invested okay but what
you'll notice is
53 000 is cash let's talk about why well
so let's kind of bring up this other
point as we now start talking about
individual trades well
there was a situation where we saw last
night
zoom which the paper money had the short
put trade-off
and zoom did not really have it only had
300 or more dollars a premium
the paper money account took the gains
on zoom
i can't remember the exact percent but i
think the option was at 16
it went down to three a large portion of
that option was already gone
okay zoom pushes to the upside the paper
money account
yesterday does a trade and it's called
docusign now the whole trade
idea behind docusign was to sell a put
they had earnings on thursday and it was
kind of with that same mentality of
stay-at-home stocks right well with what
happened with zoom
we see that docusign today
the stock price was up about 29
or 30 bucks and you're going to notice
that that profit loss percent
is literally about 43 but was
as much as 65
that's just from yesterday's closing
price okay
this trade was placed yesterday and
with that bump it actually had 65
percent gain
now you're going to notice that this
paper money account is still going to
hold this over the earnings
but if the investor said james whenever
let's say the investor says i want
50 or 65 percent gains etc
this was at 65 percent earlier today
okay so that's a trade we want to just
kind of make mention of the other one
we're going to kind of make mention of
is
paypal now paypal what you're going to
notice is on that short put right there
you're going to see that that option was
sold for 390
and it's now down to 132
66 percent of that option is gone okay
now when you take a look at this the
investor might say
profit take or roll the position
now when you take a look at actually
paypal well bring
this up what you're going to notice in
this case is the prior high is about
204.
the stock actually today even got to
about 210.
now you might be thinking james why did
the paper money account not take this
down
the gains would have been bigger because
all the trades are done
in the webcast that's why i'm bringing
them up now
okay now if the investor was concerned
they said hey i think the market might
pull back i think the volatility might
actually start to push
up i don't want to be assigned the
shares of the stock
the investor could actually just right
click on that option
and create a closing order and then buy
it back now we'll talk about why the
paper money account is going to do that
but remember
there's the law of diminishing returns
the investor can only make 132
more that's it for the next 17 days
that's it okay now the investor might
say
could they go out and maybe try to sell
another option
with a higher ceiling than 132
i think there's a good chance okay so
the paper money account in this case is
going to right click on that
option create a closing order and then
whoops
buy that option back okay if they buy
the option back it's releasing the
obligation and trying to realize
those gains okay
confirm and send you're now going to see
that it's giving back
some of the initial premium back 133
dollars
adding a commission on top 65 cents and
there's the total
now what you're going to notice if
that's okay the investor is going to
click on send
and that option now is gone and we'll
see if that order fills in just
a moment okay so paypal let me actually
just see
the working order let me just make make
sure yeah it's right up there
so it just hasn't filled yet we'll look
and see if it feels in just a moment
if it doesn't we'll check on that we
want to make sure and by the way if we
want to kind of make sure that that
position fills
we can even change it from limit to a
market
confirm and send if the investor changes
it to market it's not going to get
just filled at 133 okay so sometimes
when the investor does limit
might take a little bit as we just saw
so thankfully the paper money account
does not have to edit the order
or maybe even change it to market now
let's kind of bring up
one last thing before we talk about new
examples
now the reason why we're bringing this
up is we have a situation where
procter gamble has a long
call now one of the things that the
investor wants to do they might be
thinking well i got 17 days left don't
need to do anything
that's not true a long call like a stock
position
is bullish so the investors watching the
see
does the stock continue to have a trend
and the reason why we're bringing this
up
is because we're talking about
management and if you take a look at
this what you're going to now notice on
this stock of pg
what you're going to see is and you tell
me what you see
okay so i'm going to kind of move these
orders out of the way you
tell me what you see
what do you notice
what do you see now remember the
position is a long call
the investor is evaluating the trend
they're looking at also to see maybe
where's support
so what's happening on the trend right
now
remember this class is using options as
a stock investor
using options but also not being blind
to what trend is doing so what you'll
now notice is in this case is
what historically has been support has
been the blue line
and now the price has now started to get
down below the support
now think of support like trust
okay and all of a sudden if the price
gets down below that blue line the trust
line
investors might start to fear they might
start to say hey
i don't trust the stock anymore and when
investors don't trust it anymore
they typically click on sell sell sell
sell as they try to grab any of those
games that are that are there
so the biggest actually thing is we see
the stock now getting below support
and we also see for example the price is
below both moving averages
it's not great so momentum is down
trend is also breaking down and we also
see that
nasty that
red shade there that's not great and if
we start to see that red shade
sellers are starting to maybe profit
take
okay now let's say the investor has a
long call
now could they wait and just see what
happens
yeah they could but if the investors
saying they wanted to ride the trend and
as long as the trend was up
stay in that long call until and up
and uh or up until expiration
but if you see this the trend is
actually going down the investor might
say look i'm going to profit take
so what you're now going to notice is
the trade was 515
and now what we see is the mark is 802.
if we look at the percentage gain it's
about 55 or so
some but what you're going to notice is
james why didn't the paper money account
sell it before because all the trades
are done in class
that's why so together let's kind of
show the example of right clicking
create a closing order and selling just
because the option has 17 days left
doesn't mean the investor cannot sell
that option
what is the option worth the option is
worth its intrinsic value
the option is also worth its extrinsic
value
which has 17 days left if the investor
wants to sell that option
the mid price of that option is right
about eight dollars
okay so the investor wants to sell that
based upon a broken support line
they could sell that option confirm and
send they get a credit back of 800
minus the commission 65 cents for the
contract
and now the investor is going to come
down and say send
that order now if that's what's actually
done now that investor has tried to stay
on the right side of the trend
meaning the investor wanted to be
bullish as long as
it was above support but if the stock is
now starting to break support
it's retracting those bullish positions
and saying hey
bullish positions don't typically tend to
do well if the stock
is below support so what i want to do is
here involve you in that learning
process
and the decision-making process okay
so that's what i really tried to do with
the example of really
procter gamble now the other thing i
want to kind of just bring up
is one last trade here when i talk about
management okay so first off what you're
going to see in this case is
visa now what you're going to notice is
visa is
right up near those prior highs so here
it is right there
and there it is right there so do some
traders use prior highs as
target points do they try to sell
right up into that prior high now if we
go back and let's evaluate together
let's zoom
in what what do you now notice on the
price
what do you notice in terms of the
candlesticks that we're seeing now
what do you notice now this whole move
from down here at 196 up to here it's
pretty much been one-way
traffic with more bullish type candles
well now what type of candle do we get
yesterday
well yesterday we had like a bearish
engulfing candle
and then you're going to see that
today's price action getting down
below both moving average lines now
can the moving average lines act as far
as a level of support
yes now james what's the position
well let's show you let's involve you in
that learning process well the ticker is
actually
visa okay now that ticker symbol is visa
and it has a long call
remember long call a bullish position
which means a right to buy the shares at
195.
well when would the investor say i don't
want to buy the shares at 195
well they might say i don't want to buy
the shares at 1.95 if that stocks break
and support
they might not want to buy those shares
at 195 if the stock was going up
into the target and investors were
selling
up near that target and trying to profit
take and trash the price
they might not they might want to just
take those gains that option went from
840
up to 17.50 so that's about a hundred
percent on that option now number two
is it also has a short put this is what
the investor calls a long synthetic
where the investor buys a call
and also sells the put two bullish
positions
sold for 375 it's gone all the way down
to 70 cents it can
only go down to zero so if the investor
waited
17 more days they could only make
70 more cents so first thing tell me
what the investor would consider
i think if the investor looked at let's
say the short put
there's not a whole lot more to make
they can only make 100 it's sitting
right there
81 percent and it's rolled out the red
carpet and say
a take that gain two
roll that option or number three is
try to squeeze the last 19 20
out of it if the investor said you know
what james
i actually the investor says i just want
to take that gain that's a pretty large
gain
they could just sell that they could
exit the put by
buying it back if the investor said
james i don't like
to see the price getting down below both
of those moving averages
they also might decide to sell the
call as well how would the investor do
that
well let's go to actually click on these
lines okay
so now what you're going to see is we've
highlighted both of these lines now
notice
that the investor is watching the
support lines
the moving averages can act as far as a
potential support
and if the investor says hey have a
bullish position and now starting to
kind of see the price get down below
this
the investor now can right click create
a closing order
and now they're selling now in a long
synthetic it's a
debit typically to get in and now what
you're going to see is to
exit hopefully it's going to be a credit
okay so now what you're going to see in
this case is is trying to
take or realize
hundred dollar profit right there and
move it over
into the cash so if that's what the
investor wants to do they can go back to
the trade
confirm and send and remember it's a
credit for about seventeen hundred
dollars
minus that dollar 30. okay
now what you're going to see in this
case is going to send the order if
that's okay
i'm going to take that now remember
here's something kind of very important
what happens is as these stocks go up
near prior or these old highs
some investors they like to feel
right right they like to feel right and
they like to feel right by holding these
positions
can these stocks go above the priors yes
they can
but sometimes that prior high can act as
far as a potential resistance
and that's what we're really seeing on
this position right now
maybe some investors starting to profit
take a little bit paper money account
had a position on that
using the pry high to sell into the
strength okay now what i want to now do
is bring up
one other example here when you take a
look at walmart
now the paper money today had but we're
going to talk about a new position on
this
the paper money account had a position
on this
made about 475 and today
if you saw my twitter account what jenny
posted
walmart actually announcing for example
that new
walmart plus now what you're going to
notice is that
the reason why the paper money account
today was
targeted out is because we used a fib
extension
for the target earlier this morning it
went from the 100 percent
or a couple days ago went from 100
percent up to the 161
and it targeted out on the first trade
on walmart it's about 475 dollars
james why did the paper money account
not get back in
because all the trades are done in the
webcast
so now what you're going to notice is
that stock is about four dollars higher
why did the paper money account actually
do something before because it was
waiting for the webcast at 11 eastern
so now we're just going to have to roll
with it in the paper money example
so let's kind of look at this the stock
now has gone from the 161
to the 200 and it's sitting right there
now with that type of
underpinning as far as a new potential
product
or something that they might build out
more fully so
might that actually kind of really bring
uh
maybe some new revenue streams or
a higher number as far as e-commerce
sales that's the idea right
now what i'm going to do is when we go
back and look at this chart
okay now last week i think one person
laughed that walmart trade
that's okay paper money account forgives
you but if we take a look at this what
you're now going to notice is
the investor might use 142
as far as a potential support remember
fibs could be resistance levels
and support levels the investor also
might try to take where it went
up and pull back maybe use that pullback
area as maybe a
secondary level of support
so we're going to mark that 142
137. now i've talked about options quite
a bit
okay and i've even talked about a
futures example
but what i'm going to do here to show a
little mixture
is the paper money account is going to
do a long
stock example so remember when the
investor actually does a long stock
example
the investor is just going to go the
trade tab we're going to right click on
the ask price
go down to where it says buy custom with
stop now sometimes i feel like i get a
little pushback as far as buying stocks
look buying stocks is the most bullish
position you can do
because it's dollar for dollar does that
make sense
it's dollar for dollar okay now
sometimes people
i at least i feel some pushback if the
average age here is 45
there's a good chance that someone has
some money in their portfolio if they're
anywhere
close to being on track for retirement
so buying a hundred shares
of walmart at 146 is 14 000
if they bought 100 shares now if the
investors said look i want to buy the
stock
and also set a stop what you're now
going to see is well where
could the stop be well a very tight stop
might be right around 142.
a secondary area of support
might be right around the 137
54 and if that investor set that stop
below that area
it's really about 134.78
okay so now what's happening is that
investors saying you know what
gonna have an entry price and actually
going to have a stop now
by the way this position size of a
hundred shares of walmart
is not something that is being over
positioned
on the portfolio okay so remember what
we kind of said before is if we buy if
the paper money account actually buys
14 600 of stock
and this portfolio is about 258 000
that really means that this walmart
position would be about
five percent of the account
that's that's not like that's not a big
position five percent would be
walmart okay so it's not over leverage
if the paper money account
buys 100 shares now what you're going to
notice is
we have a price 140 61 limit that means
that price or less and a stop price is
saying if it goes to that price or less
sell the stock at the market price
and go day to gtc
now what you're going to notice if the
investor says confirm and send
now you're going to see on this is there
it is
there's the setup of the order there's
the stop
and now what you're going to see in this
case is going to send that order
now i only got about two or three
minutes left but i kind of want to show
some stocks
when we talk about just really kind of
trends and really kind of i'm going to
have to save something for a little
later
but one of the stocks that i'm going to
kind of make mention of is ttwo
okay now one thing that the investors
might be seeing on ttwo is a recent run
to the upside
and a diagonal slant of resistance
okay now one thing the paper money
account is going to do from a time
standpoint is
it's going to right click right above
that area of resistance
it's going to actually do by custom with
stop
and in this case what it's really going
to do is it's going to set a buy stop
order
a buy stop order is saying don't buy the
stock
until it gets to this price or higher
and the investor can specify what that
price is
i put my actual cursor on the chart and
above a resistance
an example of that is about 176 13.
when the investor does a buy stop it's
saying don't
buy the stock until it gets to that
price
or higher so one of the trades we're
actually going to also add here to the
paper money account
when we go back and look at this and
kind of say where's the potential
support
probably about 169 or so
setting a stop below there let's say the
investor uses a stop of 165.63
now in this case let's kind of show what
this order looks like
this is saying look paper money account
enter if the stock gets to this price or
higher
if it doesn't don't get in okay
the idea is a potential diagonal
breakout number two if the stock were to
go to that price or less
sell the stock the stop is not valid
until okay this the paper money account
has the shares the stock has to be
bought first
okay now we talked about the stock if it
gets that price or less
it's going to sell the stock now the
last one i'm going to just take a look
at just real quick
and the reason why we brought up the
ttwo is that's kind of a stock where it
ran up and it's sitting in a flag
and it has an order just sitting right
here where if that stock pokes above
resistance
instead of chasing it the order is
already sitting there and saying if the
price goes at or above that
enter the order that doesn't guarantee
that the stock's going to go up like
other
examples it's just saying get in and try
to see if that trade can work
the last one we're going to kind of make
mention of is oracle
now remember oracle is in the same space
of crm
okay and you're going to notice it also
has earnings coming up so
it's crm and among others i think it's
also
docusign a couple of those other names
as well uh as far as
uh and it's supposed to actually post on
twitter it's in the same space for sure
of salesforce
now if you take a look at oracle it's
right up near the area of resistance
and you'll kind of see the last four or
five days it's been tippy-toeing
all over that old resistance and if that
stock could actually kind of
swap that from resistance to support the
path of least resistance might be
potentially that one sick that 161 fib
now the earnings is upcoming and the
idea might be if the other ones had good
earnings
could oracle have decent earnings so
as an investors let's keep an eye on
oracle
see if that stock actually can't hold
that support and maybe try to actually
break
up to the upside and also be watching to
see
could the stock stay above 56. i'm out
of my time here today
but those were the examples we did we
did a number of examples here today
so the orders that were filled we did
the example of gold
number one we also did the example
profit taking on paypal
profit took actually on procter gamble
profit took actually on visa
also had an order filled on walmart
and also did the example of ttwo
so pretty active here this morning
remember all
trades are done in the paper money
account during the webcast
so trying to include investors in the
thought process
of how to use the platform and also how
to use different strategies okay
how many of you learned something here
today and uh
also enjoyed today talking about trends
and also getting kind of an update of
how the portfolio is actually doing and
also taking a look at different
strategies if you enjoyed today's video
give us the big thumbs up we weathered
through that technical issue there
okay we didn't have to cancel the class
we're able to kind of keep it going
so thank you for being patient on that i
can't control the wi-fi
i would like to think i could but i
can't but uh we'll continue to watch
what's actually happening with a number
of these stocks
pat malawi is going to be coming up
right at the top of the hour
so i'm pushed for time here but also
want to kind of make mention of
what we discuss here today we
demonstrated the function
of the platform also remember that uh
any investment decision you
you make in your self-directed account
or solely your responsibility
we also talked about today
market and sector update still being
quite strong
investors keep an eye on volatility we
saw a push on precious metals
that might be diversification or a
continuation of prior trend
we also did a number of management
examples and we looked at a couple
new trades ttwo walmart and also looked
at the example of oracle
so with that said i'm out of my time
thank you so much for your comments your
questions
and also thank you barbara for answering
those questions in
chat again thank you for being patient
we fought through it
and that's what that's what winners do
you just fight through it so with that
said
uh stay tuned for pat malala coming up
right at the top of the hour thank you
so much take care
bye
you
