How to use MenthorQ Data to create Options Spreads

[00:00:00.07] - Speaker 1
Foreign again, guys, welcome back. Today we had quite a busy stream and thank you, Dan, for being here. This session is going to be very excited because we're in the middle of the earnings season and today we're going to see a lot of like, really interesting companies reporting. So we're going to go over some, some of that. We're going to look at some data, we're going to go over some ideas and strategies. And now you can use the option data. But before I pass it on to you, maybe you can introduce yourself. I just want to run our disclaimer for a very few seconds. Just one second. All right, nice. Thank you, Dan, again, as always.

[00:00:55.14] - Speaker 2
All right, guys. Happy to be back, Fabio. And yes, we're in the middle of earnings seasons. I don't know what you have traded has been a hell of a ride already. And we don't have only earnings, but we have a lot of other market influences. But one thing is sure, when there are earnings, all the spotlights on inequity and everything around is like not that important. So the stock is mostly in its own capsule. And that's why it's important to see what data shows that shows us. And that's why we're going to focus a bit today on earnings, what you can do with earnings. I think in the future we will have some sections where you can choose from strategies or background of strategies for pre earnings or during earnings or after earnings ideas, just how to harvest the provided data from Mentor Q, all these kinds of stuff. But today we're going to answer your questions. That's the first thing, if you have questions, hopefully. And secondly, we're going to look at the earnings which is coming up, what is coming up and how maybe we couldn't can play them, how we can set them up and what would be a good approach, which stocks maybe we should avoid, maybe which we can maybe play safely.

[00:02:12.23] - Speaker 2
But nothing is safe in the world of options unless you have mathematics on your side. And earnings is. Yeah, that's a wild card. Probabilities are not the easiest thing there. All right.

[00:02:26.07] - Speaker 1
And I think, Dan, I'm just gonna share our dashboard. So all the data that we are going to show today can be found within our dashboard. We have all our different models. We're gonna go into like maybe our swing trading model and we're gonna go into our net GAM exposure, maybe delta. But yeah, let me know, Dan, if I can pass it on to you.

[00:02:47.08] - Speaker 2
Yes, you can pass on to me. I would say we're going to start with Some. Some. Some interesting facts. We have Google this week. We have Amazon this week. Today we have Palatier. If I'm not wrong, there are two approaches for Palatier. We'll talk about them very soon. Some smaller ones. Merck, we have amd, which is a. A smaller player than Nvidia, but always interesting. We have Pepsi, Disney, and so on. And yes, you can play them all. You can just take the swing model. And I remember Fabio did some very nice exercise putting all these earnings from last earnings season for certain days with a swing model, and the results were astonishing. So if you want to play it easy, do it like that. But we want to talk about advanced strategies and maybe see how you can harvest even more out of the data. So I would suggest we go. I hope everyone can see my dashboard here in my account. So the first thing is we're going to go to the data. This is the first thing I always look at. And I have the snapshots here. But wait a minute. I wanted to start with palette here.

[00:04:15.12] - Speaker 2
Maybe I pushed something wrong. Give me a second. I'm gonna draw a palette here. One second, Emma. Let's see. Maybe I'm doing something wrong.

[00:04:29.05] - Speaker 1
I have it here in case.

[00:04:31.00] - Speaker 2
Yeah, no, that was my bad, guys. I was on the dashboard and not on the ask. That's. That comes when you change your settings. I'm using another browser for the OR for streaming, so this is my bad. Come on. Otherwise, maybe. Fabio, you can share palette here so I can take a look at it.

[00:04:54.12] - Speaker 1
Yeah. What do you want me to do?

[00:04:57.20] - Speaker 2
Just go to. Just. Let's. Let's take a snapshot on palette here. Let's take a look. Ah. Oh, I'm sorry. I got it here, so I have it here. Fabios, that's. Okay. First thing is, what we're gonna do is we're gonna take a look at the. At the metrics, and we're gonna take a swift look. I hope everyone can see that. So what's the first thing we see here? We see a lot of green, and we see a bit of red. So an indication that when red comes in, a change in DAX or a change in Gags means normally we have higher volatility, which is good for premium, but this might flip things around. And the green indicates over all the expirations that basically this is a stock with a more positive environment, which is also good for us if we are more on a. They want to have things. Karma. And we also think that this might be leaning to. Towards the bullish side. Everyone who's traded palleteer in the last few weeks, had a good time most of the time. And so what about earnings? We have earnings tomorrow. So the average move for Palleteer is around 19% if I remember correct.

[00:06:20.14] - Speaker 2
And the thing is that the implied move, if we look at options. I won't go in there now, if we look at options is a bit higher. This means that this, that this is a stock where you can say yes, normally we, the market expects a higher move. But having priced in 90% what we had last time, this means we can take the stock and maybe take a look if we can build a wall where the stock may stay in. So one approach would be building some iron condor around this 19 and hoping that the levels will hold. If you are unsure about that, the easiest way to play pallet here, which is not a, not an expensive stock, is to look at the, the levels we have. And this is, I would do this with intraday levels to see where the stock is. This is something I wouldn't do now. I would do it tonight. So the core resistance is 100. Put support is at 60. So this is very far away. This is very nice. So this is something you can build around a very nice, a very nice butterfly. We can do this right now.

[00:07:37.19] - Speaker 2
I'm going to use something else here, here. So we said this is hundreds and the other one was 60 and we just have to change the expiration so it would get $26 in credit and we have a very high max loss. But okay, this is like crazy. The range is like 25, roughly 25. And we said this is a bit too much. And the thing is what we always have to take into consideration is that the implied move will cut into, will be cut into half. So this is something which in the end is something which we have to consider. So our break even points are faster. But this is not a good credit to get. So we should try to see that we go a bit closer. This is what the level gives up. This is something which is very safe. We go a bit closer, we can harvest more. We will balance this. So this is a credit of 23 and a max loss of M76, which means we are right here on the 19 round. 1917. I'm just looking at the, at the average moves which was 19 for fast past five years.

[00:09:14.19] - Speaker 2
Last two years it was even 17. So this is a very nice thing. And you have, you get, you, you lose, you lose three and make one roughly, very roughly, which is very good. So this is a way Very easy way to set up a non directional trade if you're not sure if it will trade up. Done. This is what I prefer. You never know how the market will react on things like you might have a earnings beat and the stock goes down and everyone's asking why. So if we take our swing model, this is the second thing I will do the five day swing model. We can get a good, good insight in where the stocks is heading. So we have a lower band. And this is why I like that this means this stock has a more bullish approach, had a more bullish run last, in the last weeks we saw a lot of green. Which means if you feel that the positioning and this is what the market thinks, the positioning is more bullish then you could adjust this here, you could adjust your, your strangle and go even higher. This is something I did here.

[00:10:30.04] - Speaker 2
I went on a balance. So we have 73 as a break even point. You can unbalance this and go here. So your break even point would be there. The 91 is the upper. So let's say we have our average in mind. This creates a, a higher credit and you get more credit than your losses here, which is very nice. But your chances of profit are definitely lower. But this is something how you could also play. But this is a more risky game. So if we are buying to the upper side, this is the risk trigger. This just means that something will happen. The lower band is something which is more important. So we saw this hundred here. So let's say you don't want to go 200, you want to go here. So this is like make 50, lose one, make one, which is a very nice probability trade which you can go in on the upper side you still have, you still have the average move. And most of the times Palatir has gone up at least what history of Palatier's earnings has taught us. But this doesn't mean that this will happen this time.

[00:11:44.20] - Speaker 2
And the other thing is what happens and this is something I have emphasized a lot of times. A lot of people, they don't want to hear anything about dax. But we have two, two kinds of levels. We have the GEX levels and the Dex levels and the one derives from the other. But with the DAX levels you have market makers on the other side. So they have to react, react like if you, if you buy, if you buy a call or you, you buy a put, someone is selling it to you. This is a market maker. So if an important level in the deck structure is breached, they either would try to Keep this level, otherwise they have a problem with their book. I think probably could explain that even better than I can. He comes from the industry. But if this leverage breached majorly, they will have to cover. And this, that's why we have squeezes. So really take a very swift look. At the DAX levels. Let me close this one. There it is. This is an important DAX level. We have 85, 75. This is positive next. But if these levels are breached, let's say if a level on the downside on the upper side is breached for good, then it might push it up.

[00:13:04.17] - Speaker 2
If it holds and stays in range, it will normally tends to go back there. This is also what we see with some GEX levels which are sticky. But with the dex levels if they break, they will have to cover. And that's why there might be a flush or rush. So this is something I want you to keep in mind. Another way to approach Pallet here is that we know Palatir and this has nothing to do with the levels here. The levels only helps you to know where the risk is or where the stock might stop. And this is something we can take a look next is for example we know that and volatility which is very important and volatility for options rises before there is an important event. In this kind of cases we can maybe buy the closest triangle which will be expensive and theta is working against that and close it before. Right before the earnings happen. What is this? This is the so called IV rush. This means we profit from the rising of the prices. Yes, you can do it some weeks before. A lot of people do it weeks before.

[00:14:12.20] - Speaker 2
But the risk is always that the theta is you lose more value every day than the the stock is gaining in value. So I tend to look at the averages, how the stocks have reacted and palleteer something like in midday today was probably after we finish this. An hour later I might sell a long strangle or a long straddle might be even better and just close it before the day ends and maybe then go on the other side and sell some premium. In order to harvest from what I said that we expect a lower than implied movement. Will this happen? I don't know. I don't have a crystal ball. So I will go with mathematics, I will go with data. And it's nothing to do with luck. It's pure statistics and let's see what the market makes of it. This is Pallet here. So I haven't seen any questions. Fabio, is there something you want to add? You want to ask? Otherwise we're going to go to the bigger earnings and see what the average is, what we can do with the data.

[00:15:18.10] - Speaker 1
Yeah, I think we. We can go. No questions so far.

[00:15:21.18] - Speaker 2
All right, guys, just hit us with questions. We're here to answer questions. Makes it more fun. So we have Google, we have Amazon, and we have amd. Yes, Pepsi and Disney. I don't know. If you have some interest there, let us know. But the easiest way. Fabio has shared that we will. The easiest way would be to just use the swing model. So if you. If you. If you're thinking of maybe. Of maybe doing something with Google or with one of the other stocks. Let me see. Yes, there's Google. Ah, just. I'm too fast today. There is Google, I think. Okay, so the thing is, we can do. Is we can go on the model again and take a look what the model suggests to us. Okay, this is qqq. We don't want to play qqq. There is Google now. It should kick in. Hopefully. I don't know. This worked really well. I think it is the. It's the Chrome browser. I don't know if it doesn't work, maybe, Fabio, you will have to share it and no worries.

[00:16:48.08] - Speaker 1
I think it's there. Yeah, I can see it.

[00:16:51.28] - Speaker 2
Okay, there it is. Wonderful. So again, we see a lower band. Okay. All stocks have been rushing up, and some stocks were not rushing up. So what do we see here? We see basically Google as of today. We have earnings tomorrow. Aftermarket is right in the middle here. So this is like a nice iron condor. You can sell again. Or you say it's too risky. I don't know. I feel like we've. I see the structure. It's more bullish. I believe Google will have good earnings. Okay, then have a bias. This is not bad. You, then, if you have a bias, don't. Don't just sell naked options or buy naked options. Yes, you can buy a call if you're very bullish. But in order to make all your money back and take off the risk of probability risk, I would prefer to. Even to. To have a bit debit spread. But for the sake of it, let's keep it easy today. So we're going to go to an easy strategy then a more advanced strategy, because this is a more advanced strategy course here. And we will do something on calendars. I don't want to mix that up today because this is a.

[00:18:05.15] - Speaker 2
Might be a mind bender. So what would we do with Google here? The easiest thing would be here basically to just set up A trade here, sell some, sell some premium here. And this is what we're going to do right here. We're going to go, we're going to build a bullput spread which is very easy. Enough. Google here 196 is our break even point. Let's see. Yep like 3%. So if Google plays along with our model, the earnings if they're good or not good, but the market doesn't dip until the end of the week. We have this. But again these are just the numbers. With this implied volatility the volatility will roughly cut itself in half. So we can, that's, that's why I would sell and not buy. That's the thing. If volatility is high then you sell, you buy a call here. Yes, it can go to the moon. But Google is an established company that really have to get out with something which is bigger than deep sea, see 10 times bigger. And then they will go up, then they will go to the moon maybe. But it's a money making machine like all the other magnificent seven.

[00:19:26.09] - Speaker 2
So it's will move in a certain range. So the average past move has been 5.2% roughly and the implied is like 1% more. So that's not much. So the thing is if the implied is right, this is, let's say the implied is right. So I want to show you, you can mic you're going to make 95 whatever happens and, but you can lose the difference here of the spread which is 2 and which is 250. This is what it's shown as margin here. If you don't have a, if you have a margin account. So what happens if the stock moves, moves around 5.5 you're going to lose a max of $150 more than your credit. So this is not so good, but this is not so bad. This is a defined risk strategy. Yes, it depends. I had seen a guy who was doing little credit spreads and that was safe but he was selling hundred or 200 of them and once or twice, three times, thrice it went well. But on the fourth or fifth time he blew up his account. So this is something which is if you have a bias, do this.

[00:20:44.19] - Speaker 2
If you want to go combine the model. Let's say you want to combine the model. Let me go here like we would have, this would be if you have a bullish approach or you say I feel a bit better with using the model. So yes, 61 in credit. This is the margin, this is the max loss and you go a bit on the safe side. So you start to lose money after we hit that. This is what the average is and the market has priced in this roughly 6.5. It's still $50 and okay, you lose five times but this is what the market is priced in. So normally this, this should stay in range. So even if we go down, you still have the average here and time works for you and implied volatility works for you. This is something which is now. So and if you want to do it safe, you just build an iron condor. So how would you build an iron condor here? Yes, you can do butterflies. We can look at this later. A lot of people love butterflies. I also like butterflies. Put them on the expected move and see what happens and adjust them with the data.

[00:21:56.23] - Speaker 2
But I would go back here, I have my roughly 5.5 in my head and let me draw up Google again. Hopefully I'm doing it right. I think I'm doing something wrong today. I don't know, it's Monday so still got the whole week to do it better.

[00:22:19.12] - Speaker 1
Yeah, I think you just need to wait the drop down menu to come to pop up.

[00:22:24.09] - Speaker 2
Okay. Yeah, there we are. Yeah, might be this new mouse I got from Apple. Apple hasn't been, hasn't performing that much. Okay, so let's go here just to show you some other approach. The first thing is yes, I would draw, I would draw up my matrix and look at it. But if you want to have live data, this is something to look at. So what do we have here? Let's say let's pretend the earnings would be today. Our one day minimum is 193. One day max is 211 because we look at the ODT to 10 which is correspondence here and the put support is a bit lower than the general put support. So yes, this is the two points. You can take the reference points and you can build a nice condor around it. So let's do it with this. We said 180. The other thing was 210. And what do we see here? We see that we're very close here. And what did we see from the model? The model. And we will go into the matrix, show that the positioning is more bullish. So that might be a more risky play. And but the model and then the data here just shows what has been happening over the last week.

[00:23:52.26] - Speaker 2
So again we go back in mind when I in your mind, go back in your minds what I said in the beginning earnings, they don't respect expected moves, they don't respect gags or dex levels. When Earnings season hits and there's an earning. Anything can happen for a stock. But after something happens, the levels tend to work again. Even in the aftermath if you have to adjust something, but the levels can help you prepare. So we said we have a break even point about 5.5. Yes. And you see here, this is too much. Yes, we are safe on the downside, but why should, why should we, why should we risk that much? It would be better to go up a bit again. So if we, if we can take a look here, we can take another look and I want to show you this because Mantaq doesn't only provide GEX levels and only provide Dex levels, it also provides other levels. So if, if we pretend today with earnings we have 194, let's say into 11 as our daily moves. So we would leave this 19F. Where is that? 93. See if we get here. So this is the daily expected move.

[00:25:15.16] - Speaker 2
If we had only one day and again volatility will be cut in half. So yes, here around five, you still make money, you still make a bit of money. And if it moves less, and this is what this model implies, that we're going to move less than what the market thinks. This is at least what happens happened before. Plus we take the data. This is like a lot of credit and this is your max loss. The thing is, if you just look at the credit and on the other side you look at the loss, you would say, wow, this is a bargain. Whatever happens, I keep $155 and I can lose maximum. Is $95 going to take it right away? Not so easy because probabilities are not that high. So the best thing is it depends on your, on your risk risk tolerances to take the models and to take the levels into consideration. And now we're going to take a broader look because anything can happen on earnings. So that's why the thing is we're going to take another look at the matrix. Yes. And what do we see? We see the 210 and the 180 we had seen.

[00:26:29.11] - Speaker 2
We see the 200 and the other ones. So what do I do here? I normally take a longer look and see where is there a positioning. We see a lot of green here, but so in order something like 230 and 105 or 150, 250, these are things which are in the future but they gives you a nice idea how you could balance things. So go to this 220 and also look at the deltas. It's a nice roughly 16 delta iron condor. So yep, and we're very well balanced. We have cut our volatility into. We have 68, like roughly 70 and we can lose 180 which is like, it's a, it's, it's not that bad. The probabilities are higher here, so 8% and on the downside because we were more bullish, but it's really nice, nice and balanced. And if you say okay, like, like we said before, you see all this bullish positioning, you can go even higher here, you can go even higher here and close a bit the gap. So yes, you will lose easier here but you make more credit. So this is something you could do. Like you see 5% here and 5% here.

[00:27:56.22] - Speaker 2
So this is a nice slightly skewed. A slightly skewed iron condor. So this is something which is very nice. So we can also look one second. This is which I also like for a second. We can see this queue here. You see we have some bullish moves. Yes, if we take into consideration today we'll see some red candle here. But as you can see here we have the right move. So this is something you can use to play this big, big, big, big, big mover. So we're going to take a look, very short look at Amazon and then I will pinpoint you to some, to some trades. This is something like what do we have? We have the positioning and the levels and we have average moves. We have. Our implied volatility has worked. So it's always good to combine your findings all together and try to set up something which is safe. So move to the next stock. Let's move to Amazon, See if this time.

[00:29:25.17] - Speaker 1
Yeah, I think is a browser issue then.

[00:29:30.09] - Speaker 2
So first thing is we can do again is take a look at our swing model again we have the 225 and 250. That will be a very easy way of setting something up. We will start again here building let's say again a bullput spread. We can also look at some sponsors later but let's stay where we were. So what did we see here? 225, 26. Let's stay in the ranges of the. I could be more accurate on the iv but I'm just going to cut it into half for the sake of it. So you just have to believe in my statistics the average move of Google is 7% in the past and now we have an implied which is lower. This means this is a stock which might move more than it has, has been chucked in. So this is A nice way of approaching it. You would just use the swing model and say, I believe the stock might go up or at least stay in some range and I make $80 and lose 280. But I said to you, we know that the levels, they are respected but they might get breached or change a bit during the day because earnings are earnings.

[00:31:04.06] - Speaker 2
So maybe be a bit on the safer side. And then we have to see if probability suit ourselves. I said 7.1%. So 7.2. This is like make 50, lose 250. So it's 1 to 5. It's not the best. But this is a stock where you are on the safer side. What can you do with a stock like that? You could do something else. So. And the levels will help us with this again. Give me a second. I think you could do is buy a short straddle and. Okay, this looks very nice in the beginning. Okay, it's 16. $16 for a contract in debit. This is something you pay. But here again you have to cut volatility into half. This is what a lot of people forget with long positions. And you start making money tomorrow around here and around here. So 8%. So we need a good move and the implied move is six. So we don't. We shouldn't forget that. And let's go back to our levels. This is something which a lot of people forget. I will show you two things which are important. So what are the levels for this week? 235 and 210.

[00:32:27.20] - Speaker 2
And we have the high volatility level. We can talk about that later. But let's say we take these levels into consideration. 35. Yes, this is something. But let's say the level is, is there and it is respected, then you lose. Let's go a bit lower so we can see the 235. There it was. You're gonna lose roughly $900, which is not that nice. This is not that nice. You don't want to do that. So this is something you should have in mind. What happens with. If these levels play a role. They do play a role. Maybe in the beginning, the, the, the. The. The stock will start to flip around. But this level start to start to kick in. Yes. What you could do when you, when you go and buy options, you can go further out in time. This is something. If you have earnings tomorrow and you wanna harvest on, on the earnings. And the average move is normally less than the implied move. And the implied move is when you take the strangle and you count that together and you See how much you pay. This is what is expected, how much the move is.

[00:33:43.25] - Speaker 2
We can make a deep dive another time, but you can go a bit further out in time and but the thing what happens here, you need a further bigger move to make money. But your loss will be less. Like if you go again to this three point, roughly 3.5, your loss you see here is a bit less. So this is a bit safer bet. But another thing is what we see here again, low volume, low open interest. Okay, the stock is quite liquid here. The break bid ask is okay, but always take a look at the volume. But yes, this is something you can take a look at and build it. So if you have a stock which has moved furthermore like Amazon, than is implied now, normally it will move more than it has moved because it has moved that much in the past. It's a stock that tends to be more volatile in, in, in. In. In earnings season. So this is something you should consider. So again if you say okay, I want to take a very conservative approach, you can again sell Premium. But then rest assured that take a look at the levels and don't forget that this stock is something which can move.

[00:35:00.15] - Speaker 2
So move it at least to a safe space and there the levels can help you. Again if you're not sure which levels to use. Yes, these are very closed levels. We can build an Iron Condor here. But if you say, oh, this is a stock that moves a lot, you see further levels which are good. So if we reverse that and go back in building an Iron Condor and go to our closest exploration. So 50, let's see how balanced we are here. How balance we are here. Let me see again, let's go around 8% so you still make money here. So we're still in the range, it's well balanced and you can still make money. So this is something where the levels can really help you. And as we said before and what we did with Google is we looked at the five day swing model and the five day swing models helped us identify. I don't know why it's not coming up. Ah, there it is. Sorry. Helped us identify a nice lower band at 225. So you can go here and balance this out. 50 and you see what I did, I just used the levels, I just used the levels I see here without thinking much like if you're super lazy and you want to play earnings and you want to sell Premium, then you can do this.

[00:36:43.22] - Speaker 2
But here, you see, this is the 7.7 and I said 7.1. The implied is 7.6%, 7.1% in the last 10 years is been the move. So yes, you will stay in range. Yes, you will lose money if we go below this here. But that, that's the case if you go on and you are have a bias on a stock. But this is not bad as Fabio showed in his, in his examples he did. And testing the model on earnings season, we saw that it had a very high hit rate. Not everything hits, but if you have 100 trades and like 70 of these trades hid and they all have roughly the same amount, then you're still a winner. That's the thing. You always have to. You have to always see how much you lose and how much you make. Like here you can keep this, this, this $130 in credit. And yes, your max loss will take in here, but let's say it moves higher. Then time is working for you and implies volatility is also working for you because it will be something like here. So if we stay in range in the first days, let's say stay here somewhere in between.

[00:37:55.20] - Speaker 2
This is a very nice, very nice 50%. Roughly 50% tomorrow at 10pm and you haven't done much. You just have looked at the amazing model Mantiq has built and have you have built yourself an iron Condor. The thing is how to manage these things. This is not that easy. What to do when levels are breached, what to do if should you adjust them? Basically, if you go into a trade, the first thing is you should be ready to take a loss because you put on a trade. We never know what might happen. Yes, we shouldn't do stupid mistake like if we have short, if we have short options. Look how what happens when they expire in the money? Maybe roll them or take a loss before you get assigned. If you don't want to get assigned. If you want to get assigned and sell a call on them, that's, that's okay. But in general this is something you should, you should consider. So you should be confident to lose $120 on this. Why I'm saying that you should. You don't need to lose that. But yes, maybe if we have a huge move on Amazon because Amazon has has a great idea about AI tomorrow then yes.

[00:39:11.22] - Speaker 2
Or when is it's on Friday, I think is it's on Thursdays they have the report earnings then yes, it will move, it will go to the sky. Or if they disappoint and Alibaba is like beating them everywhere and yes, they're gonna dive and you're Gonna lose your money. So you can do various things there. I will just talk briefly about about them and then we're gonna go to other things like what happens. Let's say we have everything goes as planned in the pre market. We see Amazon is rising but then Amazon is rising too much. That's the thing you have. The first thing is I would pull up a chart, have my, my levels there, my metaq levels, even put some intraday levels to see where there would be a resistance, where it will stop and know where your break even points are. With implied volatility faltering because. Because I just cut it into half doesn't mean it will be cut into half right away after the market opens. It takes a bit of time so it might take some time. So if you see that some levels are respected like the 250 here we saw, we can take a look at the GEX and deck structure later and it starts to react here and doesn't go higher then you can be confident that it will stay here and then you can wait it out and everything will go worthless.

[00:40:36.21] - Speaker 2
What I would do is like I always had a profit taking target like 100. Not an option for me because I prefer to make 25 or 50% like 100 times and never, never have a loss. But this I can't avoid losses like everyone. So the thing is I try to have a realistic approach onto that. So if I want to close this trade on that day I hope it won't move that much but I will be okay of taking 25 to 50% and call it a day which is very nice, very fast. Yes. If you had a long haul you would go to the moon and you would be a hero for a day. But you can't be a hero every day. So selling options and or working with probabilities in the end market the market is exciting that this is like can be a boring thing. You do it over and over again but it has to be somehow boring because if something is exciting it's very nice. Yes, most excited about these things. But then you start making mistakes. So you have to just use the data, take your emotions out. And the thing is like if you see on a day like this that let's say the put support or the lower band we saw here is breached and it's breached for, for good.

[00:41:55.23] - Speaker 2
Then you have to call it a day. Then yes, you can roll out in time and say okay, going to try it next week. Amazon is not a stock that will drop a lot. Who knows what happens. We have tariff wars now and other stuff. So a lot of things can happen. The stock market can dip 10 or 20% and then you should be ready to take more losses. So maybe call it a day or say this is a risk adjusted strategy, that's okay, I'm going to lose $120. That's the thing. If you have sold like 50 contracts then it might be harder to take a decision. But this is something you should always have in mind. So I'm going to go back and see if there are any questions now if Fabio has been, has been sharing stuff. So I don't know if there are the questions or if we should swing to some other stuff. Fabio.

[00:42:48.26] - Speaker 1
I don't see any questions. One thing I wanted to point out, I posted the link in the chat. The exercise that we did can be found within our guides. So if you guys log into your guides, this is all the list. And if you go under backtesting, right here you have our string level. We have two back testing exercises available there. The one during earnings, this was done three months ago. There's a video here we have our backtesting assumptions. You can download the file with the data. And then here we have our long short strategies, credit strategy and and so on. So there's, there's a lot of information there. The video goes through the all exercise. This was done on about 25, 30 companies that reported last quarter. We had Google, we had many of the others. So there's a lot of interesting ideas here. And then what we also do have is our swing trading model. So we did this for the whole month of October 2024. Again we have a video showing the assumptions, different strategies. We focus on 120 companies, max 7 or just indices. And then we also looked at a long short strategy, credit spread strategy, max 7 and indices.

[00:44:16.21] - Speaker 1
So yeah, there's really interesting stuff here. And you can download also the data here on all the data that we use for that backtesting. Let's see. I don't see any quest. I'm not sure if we. I'm not getting a question but I think Dan, while you share was awesome and I think obviously looking at expected move, looking at a swing model, looking at risk I think is very key. The most important when you are trading options is not how much money you can make but managing how much money you can lose. Which is the key part because if you are able to use risk management then you build basically a data driven strategy that basically maximize your profit potential, minimizing the losses.

[00:45:14.09] - Speaker 2
Yeah, this is a very important part and we're gonna make a maybe a session on that. I was also talking with Paul about that. So I don't know, I'm gonna. Maybe we have, we have some minutes left I think Fabio. So maybe we can use that for some not only risk, talking about risk things, what you said, we briefly can take a look at that but maybe also what we, what we can do also with this new intraday levels and other stuff like that's very important. Guys, let's, let's remember again we, we talked about Amazon and this is like here the volume and open interest chart for Amazon. This is a time step from the 31st and you see how some things that changed here. So this is quite, quite helpful. And if we go to intraday, this is something which I like, I like the liquidity summary. We're going to take a look at volume. So you can see here that the currently positioning of Amazon is call dominated. So if you want to take a trade in the evening then because you have earnings after, after market close and it's something you should take a look.

[00:46:31.04] - Speaker 2
So what do we see? Also we see but also we see that the gags has decreased and that the decks has decreased. So also another nice thing is here, I don't know if you use that, but this is something I use a lot because I, I do a lot of short strangles with longer days to expiration and I always take a look not only what has happened in the past, the past can tell us only so much but we always have to look into the future. But the thing is what can help us look a bit into the future is the put call ratio which is really, really nice. Like if you have a low put call ratio, this means, this is more like we have more calls and puts and above all seven. It's more, it's, it's tend to be more bearish. It's just, just, just part of the puzzle. So this is something which is very nice. What I use a lot is like if I have open up, if I have open positions. Let's say I was trading Amazon on Thursday, Friday, it is Friday morning. I am in this trade. I know my break even point is around 8% and basically I won't take a look at it.

[00:47:44.20] - Speaker 2
I'm ready to take the loss because it's just one day left. But I believe in my setup which is okay. But let's say you want to, want to adjust that. So the first thing is I would take the fresh levels here from today which Is like very, very fresh levels. I may say so. So this is something I would put up, take the levels and put them into my trading view. And in the trading view I would, I would see how the levels have reacted. So if you have and I tested that, I tested that and I test things with. This is the best way of learning. It's like tuition school. If you make a have a loss or if you win, it's like you won a prize. So the thing is like if these levels are breached, sometimes yes, you go back to that. But often, often if these levels are breached then we will go basically in the opposite direction. So if, let's say the put support is breached for real, then not a lot of things are going to hold it. So I had not an Amazon, but I had some trades in General Motors.

[00:48:59.27] - Speaker 2
And the thing was the put support was breached there. And yes, it went down today. It had a big dive through the tariffs and but is pulling itself again. And the put support for GM today was 45. And I won't pull up a chart now not to bore you out with stock you, you might not be interested which had earnings last week. But the put support was respected. So this is something nice to know that the levels give you some help. And especially I have, I have a lot of friends who like to trade pre earning, pre earning to do pre earning trades and post earning trades, which means they avoid the main event. Like if I set up a short strangle or some of my other strategies, a calendar or something, I will try to avoid the earnings event. Why? Because it's an, it's something which I can't basically take into account if I have a longer running trade. It's, it's like as I said, a wild card different. If you want to really play the earnings, the earning, the earning date, what you can do is like harvest IV in the beginning and IV crush after the earning and there is something where the levels help, you know that IV will crash and you have some levels and you know maybe the stock is falling and it fell below the put support.

[00:50:24.03] - Speaker 2
Yes. Then it might take a bigger dive, which is not bad because then you know that this put support now has become a resistance and basically you can sell above, above that maybe a call spread or something and so you can harvest that move. So these are low risk trading strategies and something where you can harvest and basically also multiq data. Okay. Is there something else, Fabio, we should talk about today, Something specific we want to emphasize?

[00:51:07.17] - Speaker 1
No, I think this was great. I think it was a great session. I think what we're gonna do is we're gonna go over after the week to some more backtesting around this earning season. So we'll prepare some documentation, some videos about that. For those who are interested to join us, you can check us [email protected] and if you have any questions on any of the things that we discussed today, you can send us an email at [email protected] and I think, Dan, we're going to be back next week with some more like earnings play and then maybe we share the backtest during the session next week.

[00:51:46.09] - Speaker 2
Yeah, that will be wonderful. So we, you can see how you can basically just without thinking much, setting up your, your, your trade and your strategy, which is very nice. Like you can spend hours and hours and hours doing stuff, but you can do it the easy way. And yes, what is better than having time in life and for other things too, because trading is fun and we learn every day. But if it's not only our day job or we have other things in our life, then we want to use a very solid model, very solid levels and very solid approach to make money, to be, to lower our risk, to manage our risk well, and basically not to have one losing trade after the other. And this is why MANTAQ is here, why we try to help you by showing you which approach you can use and other things. So we're gonna take a deep dive next week. Again, what the model showed, how it worked out and basically how you could have set up a very nice portfolio with easy trades and maybe on another session how you can make more complex trades and maybe make more money.

[00:53:02.28] - Speaker 2
But if you are advanced user, then you will also know how to manage that. And for all the other users, we're going to show how to manage that because the easiest thing is to, to open a trade and maybe get lucky to have a winning trade where there's something different of having consistent winning trades. And this is what we try to achieve here with you all together.

[00:53:26.14] - Speaker 1
Yeah, absolutely. And again, thank you again, Dan, for this amazing session and look forward to next week. And guys, if you again, if you need any support, if you have any questions, please do not hesitate to contact, contact us and then see you again live this week, tomorrow and Wednesday and Thursday as well. So have a great day. Dan, thank you.

[00:53:50.12] - Speaker 2
Thanks, Fabio. Enjoy, guys. And.