How to Trade Credit Spreads using the MenthorQ Swing Model

[00:00:21.06] - Speaker 1
Right. Good morning everyone and welcome back to the second session for today. Good morning and welcome down again. Hello, Fabio, nice to have you here. Today is going to be very interesting one. So what we're going to focus today is last week was a really good earnings week. So we had companies like Google, Amazon, Palantir, so really good momentum. We're going to show you today some back testing results on our string model. We're going to show you how you can potentially apply the data for your strategy. We're going to show you how that would have worked out on our assets, on the liquid names that are reported last week and give you some ideas on how you can use the data. And then we're going to look maybe at this week what's going on in the market, maybe like some interesting companies that are reporting and how can we then use the data to potentially get some ideas in the market. So before, before doing that, of course, let's let me go into where you can find all the resources. So if you create a free account or if you are part of our premium service, you will have access to our guides.

[00:01:35.19] - Speaker 1
Within our guides, we post all our documentation, all our resources that are available to you. So the first step is really first to understand what the string model does. So the string model is the model that you find here. So here is a chart, we show you the level for the next five days or 20 days. So we have two time window, five days and 20 days. And we're going to go into what these levels means. But to find basically more information about it, you can come into our products, look at swing trading model, open up the first guide and we're going to go into details on what the data represent and then we're going to show you some examples. So first of all you have our tutorial videos and basically the swing model has essentially three components. One is our upper band, which is the highest level that the model forecasts the price to be under over the next five or 20 days. Right. So it's like the upper barrier over the next five to 20 days. Then we have our lower band that is really the lower barrier over the next five to 20 days.

[00:02:44.11] - Speaker 1
So the model predicts that this, the price of the asset should potentially stay above the lower band over the next five or 20 days. And then you have the risk trigger, which is the white line that you see here, which highlights a level that could act as a volatility, a volatility level. So for example, if we are close to the risk trigger, it could of course act as support or resistance, but it could also act as a very strong inflection point. And the reason is that we are basically looking at potentially forecasting the direction. So the model is not only giving you a volatility around the asset that you trade, but it's also providing you with a directional bias and is based on a machine learning model that we built looking at options, data, momentum, and other factors. So whenever you see an upper band right here and a red, of course the color is red, the bias is bearish. And whenever you see a lower band, like, let's open up another example. Like in this case, Palantir, for example, We see a lower band here and our lower band is now 100, and this obviously is in green.

[00:04:03.08] - Speaker 1
So it's kind of like a bullish bias. The risk trigger can be above the lower band or below the upper band, and it typically represents a strong inflection point. Right. Because the model is trying to also provide a direction. We also then show you our back testing results that you see right here about the success of the model. So the success of the model, simply in simple terms, is really, is the price five days from now going to be above this 100.91 level on, on Palantir, and if so, that's a success for us. And here you can see the historical, historical value. So this lower band value was given to you right here. Five days in the future, the price closed above the lower band. That's kind of like a success rate. And if you see on Palantir, right here, you have an 86% success rate over 36 days. So that means that every time we add the lower band over 36 days on 86% of the cases, the price closed above that lower band five days in the future, we can do the same with our 20 days swing level. So here we have 21 days.

[00:05:16.21] - Speaker 1
Of course, we're going back about two months, but obviously the first price you will see 21 days after the first candle right there. And then you see if the price closed above the lower band or not right there. And in this case, we have a 90% success rate on 21 days on Palantir. So today we're going to show you the results from last week and then Dan can give us some ideas on how you can then integrate this data into your strategy and into your analysis. So we've also published a document that you guys can access if you go under backtesting within our guides and click on swing levels. We just published this this morning. So this is Available for all of you guys. Let me paste the link here. And this will highlight all the results that we're going to go over today. They're all here. So it's the same as this file. So essentially what we do is this is a very, very simple backtest. We take the data as of Friday the 31st. So Friday after the close, we take the data after the market session on all the companies that we cover.

[00:06:34.07] - Speaker 1
It's about 865 companies right here. This is a ticker. And then we take the bias from the swing trading model, whether it's bullish or bearish. So whether we have an upper band or a lower band. And the bias will be either bullish or bearish. Here we have a risk trigger level, and here we have the value of our lower band or upper band based on the bias. Right. Then we look at this data and we run two simple strategies. And let me show them the strategy right here. Strategy one is a pure long, short strategy. So the entry is going to be at the open on the Monday, and the exit is going to be at the close of the Friday. There's no risk management. This is very simple. Backtest strategy two is selling credit spreads. So if the bias is bullish, we sell put spreads. If the bias is bearish, we sell call spreads. And the idea is really to show if the close price at the end of the Friday would be either above our lower band or below our upper band. Right. And here you see basically if we are doing a put spread or if we are doing a core spread right there.

[00:07:53.07] - Speaker 1
Okay. And let me know, guys, if you have questions in the meantime. So let's go over. I don't know if. Dan, if you have questions on your side.

[00:08:03.19] - Speaker 2
No question. It's. I love it because it's simple, it's straightforward. And in simplicity lies basically one of the main things which I like about the levels and about this model. So go on, Fabio. I'm listening. Really intense and going to go over some other stuff later. Yes.

[00:08:24.00] - Speaker 1
Okay, sounds good. So basically, let's go over the results, and then we can go into practical examples. So our longshore strategy on 865 companies. So we assume that we trade the same amount for every stock. So this is like $1,000 per stock. So obviously, this is just a simple backtest. 865 companies, our portfolio size would be 865,000 by looking at our profit and loss. So here we calculate our return on five days on $1,000. Right. We sum all this up and we calculate Our win rate which is 65.78% again purely long short, no risk management open, you know, trade at the open on Monday, exit at the close of Friday, our PNL would have been 20,634 with a return of 2.39%. Right. So obviously very interesting. We haven't filtered out any of the assets. So we are purely doing full asset coverage. No filtering, no liquidity filter, market cap or anything. If we look at our option strategy then the this results actually is actually very, very interesting. So we have a 92.49 win rate. That means that if we are on a bullish bias from the model, we are looking if the price of the asset on Friday is above the level value.

[00:09:59.20] - Speaker 1
Right. So the goal is obviously to use the value the levels as our strikes for our swing strategies. So for our spreads here we look if the price is above the lower band of the the previous week or below the upper band. So in this case, if we take Apple, we closed at 227.63. Our lower band was 227.89. Output spread in this case would have not been successful. If we look at the upper band, let's look at Adobe, Our level is 461.98. We closed way below that. So we closed at 433.07. So we had a successful in this case credit spread. Right. By summing all these success and unsuccessful, we come up with our win rate which is basically 92.49. I'm gonna pause there. Let's see if we get more questions and let me know then if you have questions if not. Yeah, no questions so far. And then what we did, we also did kind of like segmentation of the data. Right. So obviously it's unfeasible to potentially trade so many stocks. Obviously that's back testing exercise. So what we did is we looked at the earnings stocks. So the most like liquid and more relevant earnings companies that reported last week.

[00:11:38.20] - Speaker 1
So we have our Palantir, Google, AMD, we have you know, PayPal, we have like Amazon right here. So like some very interesting companies. Right. So we do did the same exercise, took the bias from the model on the 31st. We trade at the Open on February 3rd and we trade at the close of the 9th. Right. So here we have our similar exercise, return, profit and loss strategy success rate. And then basically here we have our results. So out of 22 stocks that reported and this was during an earnings season, so during a lot of volatility, our long short Win rate was 63.64. So if we were to just go longer short these 22 companies, we would have made a 5% return. So $1,100 over our $22,000 portfolio, 5.41% return. If we played the same basket using options, in this case credit spreads, our success rate would have been 81.82%. Using exactly the same approach. No risk management, no filtering, just using this kind of like approach. And this data, very, very simple. The third basket is done on indices, right? So a lot of our users, they trade obviously spx, qqq, SPY gold, iwm.

[00:13:14.17] - Speaker 1
So we took basically these indices, we did the same principle, right? And then we see obviously that our long short only had a win rate of 40%. Our return overall was minus 0.57. So almost zero performance. But our actually option strategy, this is what's kind of interesting actually return a 100% win rate. So even though our long short didn't really work as well for these five assets, our basically options selling strategy would have worked perfectly because the indices stayed above the level across the week even though the market moved quite a bit last week. And see, let's go back here. So everything is here as well, guys. So all the data that we showed you is published right there and you also have access to the Excel file that we use. So here you can also download the same Excel with all the data that we have. Let's see if we get questions.

[00:14:41.19] - Speaker 2
I don't see any questions yet, Fabio. I think the results are for themselves and especially you can see why options are so interesting. Going naked long and short is a very simple strategy. But here you see basically what you can do with options. And we talk here about the most simple ways of having options is like level two options, like having a spread, which is a risk managed strategy. It's risk defined, you know what you win and lose. And this, this is the thing. And maybe we should talk very briefly why there are differences in the, in the options win rates. The first thing is like a nice thing, is that the most simple portfolio the most, and we have seen that before Fabio has shown other results, is that if you don't want slippage, if you want to keep things simple, then you just take the biggest ETFs weekly beyond the five days, on the 20 days and, and you just trade the model, you make your own basket and you will outperform the market most probably. This is something very nice. And the stippage is very, very small there. And this is just like five big ETFs, you can even add theories of how to build something, how the correlation is, which is very simple.

[00:16:09.25] - Speaker 2
Just use an AI or read into that. It's very simple. So the queue offers you the right data just to build your simple portfolio, which will outperform probably on the long run. Then if you want to be more active, then you can trade a lot of stocks, as we've seen here, and you have a very high win rate. And the question is why the profit and loss is higher with earnings. Because we talked about earnings. We're going to talk about earnings again today a bit. Everyone is fascinated by earnings, but everyone is having a hard time to trade them. Earnings are, as you know, option prices inflate and due to a rise in implied volatility. And after earnings are released, maybe not right in that moment, but during the first day or till the end of the week, they deflate. Which it's. Which the term is like IV crush. And a lot of strategy, selling options especially is trying to capture some of this crush. And that's the thing that before, because if you sell in a earnings week and you're right on the, on the bias, then basically you have captured a lot of premium and you have a lot of win, a lot of wins.

[00:17:28.16] - Speaker 2
Because even if your win rate would be lower, you see, you just doubled your profitability, which is like amazing. And that's why we will keep an eye on that. So this could be a very viable thing just to have a different baskets you can trade. You can have your simple ETF basket, then you can have your weekly or 20 day basket of certain stocks. We will talk about that, how you can build something like that for yourself or what would be an idea to do there. But the great thing here is if you do it with earnings, you will capture a lot, a lot. You will capture a lot of premium and you have a high win rate and you will make a lot of, a lot of return. Which is amazing because I know a lot of people who have failed years and years and over again. Earnings trade, earnings circle in a good way. So I think this is a wonderful approach and we were gonna keep a close look. And I've been doing some of those trades and some of those trades have been inspired by the spring model, which I love.

[00:18:34.09] - Speaker 2
And that's, that's really nice, Fabio. I love it.

[00:18:37.20] - Speaker 1
Yeah. And also obviously what I did here was something really simple, right? So not putting a lot of like risk management in place. So we already did like just want to show you that the data can help you, I think Dan, you have also looked at some liquid names and maybe if we want to share kind of like the Excel that you put together as well on how you can then take this 865 companies, narrow it down to some universe that can make sense for you and then we can go into like how we can then use the other data points as well. Maybe to even look at next week or this week on earnings again.

[00:19:20.29] - Speaker 2
Yes, I hope everyone can see that now. Is this, can you see this? Yeah.

[00:19:27.26] - Speaker 1
If you could zoom a little bit.

[00:19:29.14] - Speaker 2
Yes, yes, I will zoom. I will zoom in a bit. I will zoom in a bit so we can see a bit more. Let me make that a bit bigger. Okay. Okay. The thing is like what you see here is like we had 25 trades and we will go into the trades. We had a win rate of 21 winning trades and four losing trades, which is amazing. So basically this is the average profit loss, the max gain and you see a win rate of 84. And this is like really, really nice statistics. I, I, I kept the simplicity which I love here. Yes, we can do more complex back, back testing we will do because this is called advanced option strategies. Like we will show you how you can, if you feel advanced, if you have done let's say a hundred or a thousand of these simple trades, then you should feel fine by doing other trades. So we will show you other option strategies which you can use. You have an even higher and better risk return and then you can maybe carve out even higher returns on the whole thing. I'm going to zoom in on this one too.

[00:20:41.20] - Speaker 2
So what did I do here? I kept things very simple. I didn't change anything of the whole setting. I just said yes, there are 865 stocks. Very interesting. And you saw, if you traded, the whole basket would be lovely. The thing which we should never forget is, is if we don't do buy and hold that we have slippage. And slippage means that you pay fees for a trade. Even if you have low option fees. You should once in a while look at your portfolio. Okay. The bigger the portfolios, less you pay. But you shouldn't forget the moment you set a trade, even if it's a simple spread, you're already in the red zone. Which means you have, you have paid not only a fee, but you have paid the slippage which is the difference of the bid and ask. You don't get these things for free. So where is the slippage the lowest apparently at the big ETFs like QQQs and spiders and all the rest, but basically also in the most liquid stocks. So what I did is like try to find out let's say the stocks with let's say where the swing model has its break even.

[00:21:59.22] - Speaker 2
Basically the most liquid liquid spreads. And this is the small from the back test. This is what I carved out and I really love it because it's super easy. You can set up a week and say, okay, I want to trade, I want to have 10 trades, I want to have 20 trades. But I want to focus on, on certain, on certain stocks. I know I will look at the levels, I will look at the swing model on the one hand and on the other hand you can enhance that. Remember when I said you can build a very simple ETF portfolio by just trying to see how you can find things which do not correlate? Yes, that's very easy. You can look at the sectors and choose either the ETFs or you can choose from the sectors of market leaders. So there's so much you can do. Like if you had a basic strategy you did before discovering basically mental, then the thing is what you could have done is just like enhance the strategy. Very sorry, it's a bit noisy here today. I'm not in my normal office today. I'm going for somewhere else and you hear my son, which is not happy.

[00:23:06.19] - Speaker 2
I don't know which trades I put on for him, but most, apparently they're not going well. I have to check them later. Haven't had time, been a packed day. But this is an approach.

[00:23:16.29] - Speaker 1
Sorry, he's your compliance manager.

[00:23:19.18] - Speaker 2
Yes, my compliance manager complains in compliance and complaining manager. Yes, he would love to sit here and push the buttons, but yeah, I don't want to dive into the psychology and everything. What we're doing here is we shouldn't forget buy and hold is the most simple thing. And you can, if you have enough money, it will work. But what we do is try it on the short term to try to take out markets efficiencies which, and try to take chances which are on the short term. So on the long term, a monkey most probably would beat us, even a small child like my son. But if we do it on the short term, we need, we need certain ideas how we can do things. So we saw in which I want things. I want to stick with you. You can do a very simple approach, either going long or short. You can have a simple basket with the ETFs, you can have a basket with these liquid stocks. Like things you be things, you know, like absolute won't dive Most probably like 20% unless something very terrible happens and the bid and ask is very low.

[00:24:28.28] - Speaker 2
Amazon, yes. It had earnings. Yes. Maybe it shouldn't have been here. Yes. Google too. But I try to focus on those ones too because I said this is what people would trade mostly. So maybe this is not the most representative if we're taking that out. The thing is we would have had even a win rate because if we do something like that and you don't feel comfortable with earnings, this is the other thing. You saw great results with earning, but if you don't feel well with earnings, just leave them out. Don't trade the things which have earnings in the next two, three weeks. Just trade things which have earnings maybe in a month or two and we will dive in later in another session. How you can choose the right options. When is the right time to choose an options, what to look at in IV and historical IV and other things. When it makes more sense to have a credit spread or a debit spread or when to go naked. These are things for the future. So we want to stick with these simple things and show you simple ideas which you watch this live now.

[00:25:35.11] - Speaker 2
You can finish, you can sit down and maybe build your own 5 or 10 stock basket and yeah, enjoy a good steak in the end of the week. Paid by your MetaQ Swing model. Okay, Fabio, I think this is for these trades and we can move on to other things we wanted to show.

[00:25:59.13] - Speaker 1
Yeah, absolutely. So maybe we can show how to look at the models or maybe some of the companies that are coming up and maybe are interesting to watch for the week. For those who are interested in learning more about the swing model and using the swing model, you guys can sign up@mentor key.com you get access to our dashboard where you can kind of like leverage all our models. And you can also access our swing trading models on about 900 stocks, 900 assets. We're actually increasing coverage very soon, so you'll be able to access a lot of more companies as well. You can do swing models on ETFs, indices, stocks. You can also upload the swing levels on Trading View. So for those who are trading using charts, all the models or the levels that you see in these graphs are also available into our trading platforms. And Also we do offer 50 off the first month if you guys sign up through the link. So just go to mentor Q.com and you guys can find all the information that you need. But I'll pass it back to you, Dan.

[00:27:05.20] - Speaker 2
Okay, thanks very much. Yeah. I will talk very briefly because we've made it a habit of making money in earnings seasons and very briefly about 2, 3 stocks coming up and what's interesting and we can take a look at the model and maybe two, three other thoughts. If you say have a simple approach like we showed you, but if you want to have a more complex approach, the other things you should maybe look at. And then we're going to jump basically to what we told you and try to see if we find something interesting like in our scanners and then how we can harvest from that, very simple strategies or how we can even day trade with these things and how the swing model can help us on that. So the first thing is I want. I will just share my screen so everyone can see. I see. Give me a second here. Present it to mentor queue. I hope everyone can see my mentor queue. Can you see that, Fabio?

[00:28:19.25] - Speaker 1
Yeah, yeah.

[00:28:20.15] - Speaker 2
Okay. All right. Good old Coke. I don't know if anyone still drinks Coke or drinks other stuff. I still like the zero. I don't know why I would like the super sugary stuff, but my wife would bear to disagree. So Coca Cola is having earnings, I think tomorrow before market opens. So if you want to trade that tonight, now is the day as Coca Cola has always been trading on the same price and it doesn't move much. So I will take a brief look. At Coca Cola. We have Paulo Alto Networks and shop. Okay. There's CVS in some Airbnb, but these are smaller ones. They are very small and that's why Coca Cola normally doesn't move that much. It seems to be a very safe bet. So it would be either good to either trade an araconda or just. We will take a look at the levels and these are the levels which we got live from the. From the intraday levels. This is something. If you haven't seen that, if you do it here or you do it through the bot in the discord. If you day trade or want to set up a trade this on the live level, which is amazing.

[00:29:34.08] - Speaker 2
So let's say if we had a trade, we will set that up and I will show it to you. We will look at the swing model and decide which direction we would like to take or which direction we should skew our. Let me do this one second. Maybe I'm doing. Ah, there it is. Sorry. So what do we see here? We see a lower band at 62 and the risk trigger is 65. Okay. We always go a bit further out that would be a very simple iron condor. And we would be outside of my statistic which I have. Coca Cola richly moves around 2% max 3. And if we take the risk model, risk trigger and the lower band we could build a very simple and very simple iron condor there. If you feel in a mood of celebrating and riskiness you could do short strangle. But this is isn't advised among earnings because things, a lot of things can happen. And because we talked about the model and we saw how well it works in earnings, we would here choose to take a very simple put spread and try to find the break even point around the lower band.

[00:30:59.17] - Speaker 2
This thing is here the model gives a very simple approach. And what I would do as a second thing before I would set that up is try to see the levels of the day which it's 62, very close to that. This is the ODT and they put support in general is 60. So this is the thing somewhere in between 60 and 62 which should find our break even point in order to be safe. And we still have a bias. Another thing which I do, and this is something I I do with I do often is before I set up a trade I will go in and see the difference in the gags because for the end of day. And what do we see here? We see some positive gags and some negative gags and the changes here, you see and then this helps us to give us a feeling what might happen. And our bullish bias here isn't 100 approved but it's not disapproved. So the next thing is what we will do is take a look at the gags difference here, the previous snapshot. And again we see that we might be safer here to set our camp around 60 and not around the high volatility level.

[00:32:20.18] - Speaker 2
About the high volatility level, how to trade it, what to do it, especially in day trading we can talk in another day and which strategy is the best. And this is something we have kept for the longer, for the longer term. So I would try to build here a very simple bullput spread on Coke, Coca Cola. So let's see, we saw 60 and if you look at that we would just get $3 and an estimated margin of 100, let's say. So it would. This is like too much. And what did I say to you there? We had the model which showed us 62 something so we can be more, a bit more aggressive. And I told you Coca Cola normally moves about 2%. So if we go to 62, okay, things are Improving right now because we know our break even point through the model is a bit higher. This is a 2% so it's 22, 200, it's 1 to 5. This is not the most incredible spread, but this is not the worst spread because max you lose 78 in West coast you make 22. And what I showed last week we can cut off here one third at least of that.

[00:33:39.25] - Speaker 2
So with a very simple move here tomorrow you already hear very close of making of doubling or already capturing the whole of the credit. We don't fall down here, not much happens. And in the worst case if it doesn't move much we can still stay here. And we remember our break even point is 262.78. But the thing is output support is at 16. So even if things go really really sour, we max lose 78 because somewhere around there it should stop. But because the model works so well, we can be very confident. What, what else could we do? We if we say okay, we saw a bit of change in the, in the gags and in the dax. This is something I showed you last week. We could be here a bit more aggressive. We could do this here. And then we go one second to the model and build one second for the model to load. We can build our Iron Condor. So we have 6,220 and 65 40. So that will be Aaron Condor. So this is not that bad. It's $39 and you have immensely increased basically your net credit. The other thing which we could build and this is I will do very fast here and then we're going to move to other stuff here would be this put broken wing butterfly.

[00:35:31.29] - Speaker 2
You see we have a bit more repay debit. Yes, we can lose but basically I showed you something. This is, these are the levels where was probably going to stay in because this is what our five day swing model showed. And we know Coca Cola doesn't move that much almost probably we're going to end up somewhere here. Maybe we won't make that money that fast but in the end of the week we're going to end up here. And you see we pay $50. I can tweak this more and maybe we had a credit. Yes, we have a high max loss but this normally doesn't happen. And basically it could make some very nice profits. So it's one to three. So this is very nice but this is a more advanced thing. I will prepare things for the next time or some other time and show you how you can build nice open wings butterflies. So let's go back here. Going to take a very fast look at the time we said there is Palo Alto Networks and Shopify. We're going to look very briefly at them. And Palo Alto normally moves around 8% and Shopify about 12.

[00:36:45.18] - Speaker 2
And this is something you should bear in mind when you build your strategy. But thing is, we're going to keep it simple. Again. See we are defined again. We see here a nice lower band around 107. IV has spiked. So we would make get a lot of premium. And as we saw that the model works awesomely well. You can just build a very, very simple vertical here. And if you want you can even build an Iron Condor or something more complex. That's the thing. And whilst we're here, I want to show you two other things which are very interesting or I take a look at these things. Take a look at Shopify and this is just a dog. Where we see two things. If we take here the main, the main matrix, which is amazing. You see it change in the dax. Yes. So this is basically we solve a bullish model, but we have to be a bit more careful here because we see a change in these two. And this is simply made. But there's so much complex information here. So this is just a warning for you. If you set that up.

[00:38:15.09] - Speaker 2
Keep the break even points in mind. Keep basically the core resistance and put support in mind. So we saw the model around 107. Yeah. Maybe move to 106 in the put support if you still get good credit for it. Another thing which I want to turn my attention to, I think it's something which is very interesting to you is something we can do is like what I like here is like we can go to the IV rank tabs and take a look at these things and say, okay, this is something where volatility is high and where we could just trade some different things. This is more advanced. So you see Coca Cola is here because it has earnings. This is something I wouldn't trade now, let's say with a strangle or something else. But this is something I would trade maybe if it wasn't. If it wouldn't have earnings. Something I know because I traded it the last weeks was Devon Energy. It has heavy rank. It has a high implied volatility. So this is something which we can easily build something around. But what do we see here? We're gonna go back here to 8 Devon, because I've been asked a lot in the charts and all the, and all the groups, what kind of trades where I Take the trades and where I get my ideas, a lot of ideas I get here on the main dashboard.

[00:39:48.20] - Speaker 2
And you can just. And I will show you that I haven't forgotten about the model. I will definitely use the model to tweak things. But for a first thing I will again go to metrics. There's the Matrix. We all love our metrics. Wish there were more films like that. So we see a lot of rat here and yes, I've traded this up. I traded this down. Oh normally if you have a lot of high volatility, especially if stocks fall at some point they stop, they go up. But there was a reason for it. Devon Energy is in the. In the old sector. XOP is the big ETF which is rising today. So energy stock should go. Go up again a bit. But this is not mine. This is Tim's. Tim's field of play with a long. Taking a long look and swing at things. So what could I. What could we do here? We'll take a look at the 20 day model soon. So we could maybe think of building some iron condor, some sort strangle. I would either do this year. Still 35 days left, but I would prefer the April one. So this is a monthly.

[00:41:01.05] - Speaker 2
So we could take the 42 and the 35 and build a strangle there. And what do I do here? Why I like the Matrix so much. I will take a look how this develops. Does it go up, does this go down or does this go up with it? So this is something very simple where you can see how the market is shifting. And this is something I do most of the times daily. There's some other things of my TheQL used just to check, to check if the basis has changed. So I won't look into my broker. I know my breakeven points, I've set alarms and I don't care about that. I will look at these things if we build a very simple strategy here and we will twist around and look at the things if we say okay, we see a lot of negativity here. So we have the 35 here, but we see some 30s here among that 31s. So this is something we should bear in mind. But the 42 inside, but not that high if we have the 50 here or the 40 here. So what could we do here? We could go here and build a single.

[00:42:15.22] - Speaker 2
This is the thing. And that's why I chose also Dev. Not only because I found it, but because I will show you what I meant today. Oh, it's up. Wonderful. So making money Right now. So what, what did we see? We saw the 40, we saw the 32 or the 35. So this is something, this is a longer outlook. So if we take this outlook we would expect this thing to go up. If you want to be more safe, you could trade this way. We're going to check our deltas. This is a low delta, this is a bit higher delta. But given the bullish approach on the long run from the levels maybe not from the model, which will help us adjust this thing would be a good thing to think about that. Why wouldn't I take this trade? That's why I'm showing this trend, not because I don't believe in it. Yes, I could manage it very well. It would be an easy trade, must probably to manage. But I don't, I wouldn't take it because there's no, there's no volume here. So that's the thing, the break the bid and asks are very fine, they're very nice.

[00:43:15.26] - Speaker 2
But if there's no volume, I can't get out of this trade if I need to. That's why I told you today, stay put and best trade the liquid stocks. We take a Tesla for example. Wow. This is super liquid like you see. So if we go a bit lower, it's very high. Let's take the 300, take that. Elon goes to the moon, we're gonna go to the moon too. So this is a very simple 20, 20 deltas triangle around here. So you see, and this is basically what you can always take as a reference. Make one, lose four. And this is something you can manage well. So this is something we would just build with deltas. Would we improve that? Yes, we can improve that by just taking a very short look at the matrix. But we will see how the model will help us on the short term and I will show you and you can do this with any strategy you like and then I will pass it on to you again. You can add something if you like. So we love it. S line here. I have a friend who's living off trading angles on Tesla for as long as I can think of my auction career.

[00:44:42.22] - Speaker 2
So what did I do? I. I chose a 310 and the 445 for the April one. Here we have 500 and 350. So yes, the market is more than we are and yes, the market is in general more bullish. Yes, we see here a bit going down channel. It won't most probably won't break our upper level. It's probably not, but we might be A bit on the caution side because we will take a short look at the, at the. At the model in a minute. But let's see what happens on the lower volume. The lower volume we see the three. The. Give me a second. The 340 and we chose the 310. So yes, this is safer here. But maybe we're losing premium here. Oh, what I always like to do. I take this as reference points and play around a bit. But I would maybe start with something like that what the model tells me and adjust over time. I will swing them around. Not that much because every time you change the trade you. You might lose money but with a bit of ask. But this helps me here just steer the ship pretty well for a beginner.

[00:46:02.29] - Speaker 2
I would advise you maybe to build some iron condors and but because this is an advanced option strategy, we'll dive into. We'll dive into naked selling strategies in one of the following courses. Especially why strangles are so nice, why it's so easy to adjust them. But you should know the risk and what you can do about that. We're going to dive one second into the 20 day model which gives us a longer, longer view. And what do we see here? Oh, I was pretty well with my 310 and the 413. I was a bit more. A bit more aggressive. So I could have gone a bit lower if we traded that on a 20 day. And why do I love the 20 day model if I'm trading out to April? Because half of the time was probably going to close my trade in order to avoid any gamma risk. The 20 day model, if I start around with 40 to 50 days to expiration gives me a perfect look every day what is going on. Yes, it has a buyer a bullish bias here. Is that bad for a striker? No, I would just adjust and skew it.

[00:47:14.05] - Speaker 2
So the same thing is what you can do with an iron condo. You can skew in order to harvest a bit of the move. Maybe you have a lower range where this can move. But the market always as a side which it tends to and you can adjust to that if things don't work out. You can get in more premium. You can roll the things, you can adjust the things, you can roll out in time and you can do tons of things and mental Q and all its data helps you to be on your toes and be the wave before it comes and captures you. That's the thing. Okay. We mentioned like no one can basically see a big wave in the market which can come any. It captures Most of most of the things. And if you know how to read the data and use the data, and the data is laying out very simple to you and you can get very advanced strategies and make the most out of your money. But we're here just to show you things. These are just ideas how you can use the things. This is no advice.

[00:48:17.10] - Speaker 2
This is just something for you to learn to play around and to try to capture the most. So the easiest thing which you can do is build a vertical here. The second idea would be make an iron condor here. And the other thing, if you know about options and know about its risk, start with a strangle. Build a strangle here and try to capture the premium of the moves in between of the stock. Why is Tesla having great premiums? Normally because it has high volatility. But this is something we will talk about in another seminar, as I said, where we can will help you to choose which option rates, especially the verticals, are good for a credit and which are good for a debit. I've talked about this a bit in another session, but we will dive, take a deep dive so you can take your trading to the next level. And don't set these things up, not only in the right direction or with the right premium or the right break even, but also having volatility on your side and not only theta or theta working against you and having volatility against you, this is very hard to win.

[00:49:26.20] - Speaker 2
All right, Fabio, these are some of the very simple things I could show with the, with the data here. And maybe back to you, you have something to add or we have questions.

[00:49:38.20] - Speaker 1
Yeah, I don't see any questions left yet. So maybe there is an issue with the platform, but no problem. So I want to add basically that everything that you showed, actually it's also covered by many of the courses in our academy. So we have actually an advanced curriculum for option trading. So here is an example of some of the things that we have. So we have option Greeks, auto read, term structure, skew, terrorist charts, how does market makers and liquidity work, how to use our models for options trading, and then also how to use advanced strategies with options. So like we have bullish strategies, bearishness. So we have a lot of lessons here that can be very, very interesting. And then, Dan, we're going to continue to add more value here over the next few weeks and months. We're going to talk about different use cases. We looked at earnings today, but essentially, basically, if you want to access all of this, you can now join us over our premium Membership, you get access to all our courses, all our academy, all our data, all our models, and also if you want to then step it up.

[00:50:53.18] - Speaker 1
We also have our pro plan, which allows you to join our live trading sessions twice a week with our traders and also give you access to everything else that is part of of our premium package. So I think there's a lot there that you guys can use for not only being actionable, but also learning actually how to use the options data and why options are so important.

[00:51:20.16] - Speaker 2
Yes, wonderful, Fabio. And we, I didn't even talk about decks today or you can use it for your trades, but we will said there's so much, so much you can, so much you can learn and read and see it as a journey. Learn every day. Like I make it a habit of trying to reread stuff and take one piece for 20 minutes. Even if I know things, you always discover something new. So when I go, one of the first thing is every day I go into the platform, look at the screeners, look at the things I'm following, how the, how there's a change in it, and we'll take five to 10 minutes just to jump into the academy and just look at something and something will pop to my mind and get a different angle. So. And there's so much stuff added. So feel free to reach out, to post questions here or to tag me or Paul, who also trades a lot of options in the discord and we will dive into more trades and how you can harvest these things and you don't need to just blindly follow deltas and other stuff to build your trades and across your fingers, but you can really see what's going on under the hood with all this data.

[00:52:36.24] - Speaker 2
And I'm just telling you, just take a look at Apple today, perfectly start. If you had traded that from the put support and the daily put Support already made 20 to 30%, always tracking that on the side just for the fun of it, to see what happens in an hour when I talk. So this is so much stuff you can do. And how would that have started? Look at the screener, find Apple, see that it's close to the put support. Take a look at the model, see how the model is reacting on that. Maybe take a broader look in the matrix. If you want things simple, just set up a very simple vertical and you saw the results. So statistics don't lie if you, if you do them properly. And this is what I love about these statistics. To wrap that up, they are simple, they're understandable for anyone and they they just don't hide the numbers, because you can just take the numbers which Fabio showed you and can go to your broker or somewhere else and check the historical numbers and they will add up. That's why. So it's no it. This is no paintings on the wall, nice things, but the numbers are just great.

[00:53:49.15] - Speaker 2
So just decide for yourself what is good and what do you want to trade. This is the advice we can give you. We can point you to things, and that's the nice thing. We don't give you ready things, but we help you think, and that's the most important thing. We should never stop, although we have our eye and other things, stop to think. We have to develop and develop every day. Otherwise, where would the fun be?

[00:54:12.11] - Speaker 1
Yeah, I like it. Yeah, that's well said. And thank you, Dan, as always, for your take. I mean, it's great to see how you apply all this data for kind of like doing exactly what you do, which is selling premium, which is really benefiting from one of the variables of options, which is decay of time. So in the next few weeks, we're going to spend time going over this concept, going over, like, some of the other models that are going to come out are net delta, net gamma, and all of that stuff. But for now, thank you so much. Really appreciate your. Your contribution as always. And we're gonna see each other tomorrow back in the room and, you know, happy trading week to everyone. Thank you, guys.

[00:55:01.17] - Speaker 2
Thanks, Fabio. Good luck, everyone, and use the data wisely. See you next week. Bye. Bye.