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How Earnings Season Affects OptionsAs most of you are aware, it is earnings season. So today we’re going to talk about how earnings season can impact options trading, because, as you know, I trade options. Now, just a brief intro. Earnings season happens quarterly, meaning four times a year, and this is when corporations reveal their financial results for the previous quarter. Now, the results of a company’s earnings report can have a major impact on the stock price, and options will often price in the expectations for a big post-earnings move before the event. This is why it is likely that options premium are more expensive during this time. Implied Volatility One thing to know about this and how it can impact your trading is implied volatility. See, there several things that make up an options price, including the market’s expectation for future volatility, and that is called implied volatility. So why is this important? Well, as the buyer of an option, higher implied volatility means that you are paying more for your contract. So if you buy an option before earnings and hold through earnings, you put yourself at risk for a so-called volatility crash. Now, part of the reason implied volatility goes up so much ahead of earnings is because traders don’t know which way the stock is going to go or by how much. I mean, remember Netflix at the beginning of March? Who would have known that Netflix would soar 17%? But you see, once a company reports earnings, there is no more uncertainty, and this is when implied volatility drops, and in some cases, so does the options price. So if you bought an expensive option, there’s a chance that you have to sell it to close at a lower price even if a stock moves in the direction you want it to. And let me show you a very, very specific example of a volatility crash and why it is so important that you understand the concept of volatility and how it can impact your options trading. So I want to show you right here we see Seagate. Seagate reported earnings last week. And so here is the pre-earnings options data. The day before Seagate, STX, was trading at $61.45, and an At-The-Money call with a 61.50 strike price was going for the last traded price of $1.74, and the implied volatility was 128%. On the other hand, the put was going for $1.82 and the implied volatility was also 128%. Now, this was the day before earnings. Now let’s talk of what happened the day after earnings. So again, here Seagate was trading at $61.45 before earnings, but then the next day, Seagate dropped to $59.33. So it fell dramatically and therefore, and the price of the 61.50 call is only a penny. So it’s not surprising that the call is not worth anything, but here’s the key. Even though the stock fell quite substantially, the put only went from $1.82 to $2.51 so it went up because puts go up as the stock goes down. So this means that the put only went up to $0.70, $0.69 to be exact. You see this is how the volatility crash affects the option price, because even though the put is worth more now, and is now in the money, but it also lost a lot of value due to the decline in implied volatility. See, the previous day, it was 128%, this implied volatility, and the day after only 96%. So you have to factor this in when trading options into earnings. How Is Implied Volatility Measured? So let’s talk about this implied volatility thing and how is this measured, right? You know me, I’m all about practical stuff, so I don’t want to bore you with the math behind it and I don’t have to. The good news is that there are plenty of places online that calculate the implied volatility for you, and I want to show you exactly how you can see if the implied volatility, is high, low, or average. Here is the easiest way to do it. You compare the implied volatility to the stock’s historical volatility for exactly the same time frame. The implied volatility measures the market expectation for future price action. Now, the historical volatility measures the volatility for a stock that already occurred over a specific time frame. All you have to do to see if the implied volatility is high, low, or average compare it to the historical volatility. We can use the implied volatility of AAPL Apple’s Q1 earnings season. Apple was trading at 142. For an at-the-money call, expiring in four days, the implied volatility was 71%, and for the put was 70%. The historical volatility of Apple. And this is something that you’re charting software can show you, it makes sense to look at it in 10, 20, 30, 40 days increments. So if we were to look at the past 10 days, the historical volatility was 37%. But the call was trading at 71%. So what does it tell us? It tells us that the premium on this call, and also on the put, was running more expensive than usual. So now we can see, how this is affected by earnings. Now, let’s take a look at the implied volatility of an at-the-money Apple call from the same time that expired later out at, let’s say March 19th. So for calls expiring March 19th, you see right now the implied volatility is much, much, much lower at 43% for the call, and 43% as well for the put. The historical volatility over the past 60 days was 40.69%. Now compare this to the 43% and we see that it is pretty much in line here. So this means that the premium that was on these calls and puts on options that had 53 days until expiration was pretty much average. Why You Shouldn’t Sell Options Into Earnings Options traders are always talking about implied volatility and historical volatility, and now you know what it is. Now I want to tell you why I don’t sell options into earnings. I mean, even though the stock moves in the direction that you want to, your option premium is getting sucked out of there because of the volatility crash. You see, and this where, as an option seller, you might say, “don’t I want the premium to be as high as possible?” and yes, of course, you do. But let me make you very clear why I don’t sell options into earnings. If you have been following me for a while, you know that I love trading the Wheel, and as part of this strategy, we are selling options. Well you see, earnings plays are hit-and-miss. Sure, everybody can get lucky and most people who start trading expect their account to explode from one or two big trades. This is where we have some stocks that are jumping just dramatically. Looking at Intel, INTC over the last three earnings. Huge gap down right when we had earnings, then there was another earnings play, and Intel really crashed down hard again. Then also here during the last earnings season, initially, Intel went up but then started crashing down. You see, some people like these earnings plays because they believe the hype that they can make a lot of money with very little work involved, but see, trading just doesn’t work this way because, in reality, the key to becoming successful in trading is consistency and growing your account systematically. That’s what I mean when I talk about generating SRC profits, right? SRC is an acronym that stands for Systematic because I like to trade what I see and not what I think. This is why I use indicators and have a trading strategy that tells me when to trade, what to trade, when to enter and when to exit. The R stands for repeatable and by trading my plan, I’m able to find repeatable profit-making opportunities. The C in SRC profit stands for consistency. You see, I’d rather make slightly less money more often than biting off all my nails waiting for a big winner. As you know, part of my systematic approach to trading is to use The Wheel Strategy and the PowerX strategy. Now, especially with The Wheel strategy that, where I’m trading right now with you here, the idea is to get paid while you wait to buy the stock, and because I’m collecting premiums on the puts that I sell, I’m looking for stocks with higher volatility, right? This means making more money, and as a rule of thumb, I look for stocks with an IV, implied volatility, of at least 40%. The Wheel strategy can relatively safely produce profits, but I don’t recommend you to trade into earnings, at least that’s not what I do. So I will not target options with an expiration date that includes the company earnings report. I am trading options before we are running into earnings. So this is why I think it is very important that you know when trading options, whether it is buying or selling, that you don’t trade into earnings. At least that’s what I do because earnings are a wildcard and there’s just too much uncertainty. Remember, I’m not looking for fireworks here, I’m looking to systematically grow my account through consistent and repeatable strategies. Where To Check For Earnings Now, I want to give you two more resources, if you want to see for yourself who is reporting and when. These are two websites that are pretty cool that I personally use. So the first one here is “stock earnings.” If you go to stockearnings.com or they even have stocksearning.com, they will show you see the notable earnings that are coming up this week. Now, another one that many people like to use is earningswhispers.com. So that’s another great source for finding out when companies will report earnings because this way you can make sure that you’re not trading right into earnings. It’s always good to know when they report earnings if you have any open positions, whether you’re buying stocks or selling stocks so that you’re not caught off guard. So I hope that this helped you to see how earnings impact option prices and why I never sell options into earnings.
NASDAQ:INTCEducation
by rockwelltrading
Trading For A Living: How Much Money Do You Need?In this article, we’ll talk about how much money you need to trade for a living. I’ll share with you my three-step approach and give you an example from my trading account. “How much money do you need to trade for a living?” is one of the most frequently asked questions I get. “Can I start with $5,000 dollars, do I need $25,000 dollars, or maybe even more?” You see, this is a super important question. Now, here’s the deal. There’s no standard answer because making a living is different for everybody. Some traders can live on $5,000 a month. For others, trading for a living means making at least $15,000 a month. Let’s talk about step number one. How Much Do You Want To Make Each Month? Step number one is figuring out how much money you want to make per month. This is the first thing determining what your income goal should be, and it really depends on a few different factors. For example, what are your monthly expenses? How many dependents rely on your income? That’s different for every trader. Additionally, what income do you need to buy cool stuff like cars, boats, whatever it might be? These are just a few examples of what should be taken into account when you figure out how much income you need to generate every month. Now, as boring as this sounds, it definitely helps to make a budget. You don’t have to account for everything, but you should list your major expenses. So in your budget, there should be, for example, expenses for housing. In housing, you include your mortgage, your insurance, your taxes, and expenses for your house maintenance. The next thing to account for is transportation. Unless you’re using a helicopter, for most people this is a car payment or a lease. This also includes car insurance. The next major category is food. Food includes groceries and also restaurants. Now, the next major category is utilities such as gas, water, power, Internet, TV, phone insurance. Some of you also buy your own health and life insurance. You also need to consider any medical expenses like co-pays. The next one is a fun one, travel and entertainment. Where do you want to travel? How often do you want to travel? What else do you do for entertainment? You have to factor these activities in too. This next one is not so fun. This is of course the dreaded taxes we have to pay. Now you need to add all of this up and you will get to a number, which is the amount you need to make each much to cover your expenses. For me personally, this number is $15,000. So you know what my number is, and I’ll show you how I trade for a living so that I can make this $15,000. What Is The ROI of Your Trading Strategy? Now that we have figured out what your number is, it’s on to step number two: factoring in the return on investment, or ROI, of your trading strategy. I like to trade the PowerX Strategy, and I also like to trade The Wheel Strategy. These are my two favorite strategies, and for both strategies, I want to see at least 30 percent ROI based on my buying power. Let me explain what this means. As an example, let’s figure out 30 percent of my buying power. I’m trading a margin account and this means that I can borrow up to 100 percent of my cash from my broker. Let’s say I were to put $20,000 in cash in this account. $20,000 in cash into a margin account would give me $40,000 in buying power, so back to my ROI, the return on investment. I want to see at least 30 percent based on my buying power. So in this example here, if my buying power is $40,000 and we want to find out what 30% would be, we take 40,000 and multiply it by 0.30. This comes to 12,000, so this means that I want to make at least $12,000 per year with $40,000 in buying power in a margin account. To find the ROI based on the cash I put in, which is $20,000, we take the $12,000 (profit we would make with margin) and divide by $20,000 (cash I put in), this comes to 0.60, or 60 percent ROI based on cash. I know this sounds like a lot of numbers, but here’s the good news. This is the most complicated step. Now, I know that for some of you 30% sounds low, doesn’t it? I know that most traders would like to see 50% or more ROI, maybe even 100–200%. But you see for me, it’s more important to be able to generate SRC profits which stand for systematic, repeatable, and consistent. I’ll take 30% in SRC profits any day over 100% in irrational profits trading stocks like GameStop. For me, 30% is good enough to support my lifestyle, but hey, every trader is different, just make sure that you use YOUR number. By the way, if you don’t know your ROI yet, trade your strategy on a simulator first. After 40 trades on a simulator, you will get close to your strategy’s ROI. Determining Your Account Size Let’s move on to step number three because now things get exciting. So step number three is where you use a formula to determine your account size, and I want to give you the formula right now so that you can plug it in. Everything that I do is very, very systematic. Now you know how much income you must make every month, this was step number one. For step number two, you learned how to figure out how much ROI you can expect from your trading strategy. Here is a very simple formula that you can use to calculate how much you should have in your trading account so you can generate the amount of money every month that you determine. In order to determine the buying power you need in your trading account, all you need to do is take the desired annual income that you determined in step number one and divide it by the expected ROI that you determined in step number two. Let’s say that you want to make $10,000 per month. If you want to make $10,000 per month, that would be $120,000 per year. For some, this might be very realistic. So this is step one where you used a budget to figured this out. For step number two, say you’re using either the PowerX Strategy where you can easily make 30% a year, or you’re using The Wheel Strategy which can also help you to make 30% per year. You have determined that you can make 30% per year based on your buying power. Here’s how you would figure out how much buying power you need in your trading account. Your buying power should equal $120,000 desired annual income divided by 0.3 (30% ROI). This means that you need $400,000 in buying power in your account. Now, $400,000 in buying power would mean if you’re using a margin account, you only need $200,000 in cash. This might be more than you expected, and that’s okay. You can actually trade for growth in the beginning. I just want to show you what your goal needs to be if you have a smaller account right now so you know at what level you can actually start trading for income, and at what level you can quit your job. Have Realistic Expectations If right now you’re looking at this example here and you currently have $10,000 or $20,000 in your account, that is really good, but don’t quit your job just yet. I like to keep it real, right? With me, it’s real money, real trades, and also realistic expectations. Well, that is possible if you have a decent-sized account, but let me cover another example so you can see how simple the formula is, and how it works in action. The Numbers In Action So let’s say in step number one you determine, like I did, that you want to earn $15,000 per month, $180,000 per year. Now, again, we are assuming that we’re using The Wheel Strategy and the PowerX Strategy, which gives me 30% ROI per year. Here’s how I determine how much buying power I need to have in my account in order to make $15,000 a month consistently. Again, we take our desired annual income, which is $180,000, divided by 0.3. So that would be $600,000 in buying power. Now, $600,000 in buying power means that you need to have, if you’re using a margin account, $300,000. This is how this worked out for me. At the beginning of the year, on January 11th, 2021, I put $250,000 in cash into a margin account, and this gave me $500,000 in buying power. So $500,000 in buying power, and at the time of this writing on April 26, 2021, my profit thus far this year is $72,908 in REALIZED profits. This means that on average, over the past four months, I made $18,277 per month. Now, my goal was to make, as I told you earlier, $15,000 per month, which means my goal would have been to make $60,000 in a 4-month span. Since I’ve earned $72,908 over the past four months, this means I’m overachieving this goal. This is the important thing because the question is “how much money do I need to trade for a living?” Summary As you can see it’s quite easy to calculate the money that you need in your trading account to trade for a living. However, it is completely unrealistic to open an account with $5,000 and expect to trade for a living, unless making a living means making $125 per month. And I know that there are many people who tell you that you can start with $5,000, and then they do some magic math and tell you they can show you how to turn that $5,000 into a million dollars within a year. This just isn’t realistic. It’s probably not what you want to hear, but I know that this is what you need to hear. The good news is, if your account is not large enough yet to trade for a living, that’s absolutely fine. You can trade for growth and use money management to grow your account. The main difference when you’re trading for income vs trading for a living as I do is, every month I wire profits out of my trading account into my personal checking account. While you’re trading for growth, you keep all of the profits that you make and keep them in your trading account. If you’re still at a smaller account, that is absolutely fine, but now you know what level you need to get. If you’re here right now and you need to get there, then during this time you might need other sources of income. I wanted to do this article to show you a really simple formula so that you can determine how much money you need in your account to trade for a living. Remember, it is possible to make a living trading. It is possible, it is doable. Just have realistic expectations and a plan.
TVC:VIXEducation
by rockwelltrading
2
S&P UpdateS&P 500 Index. Target of 4210/4220 area still in sight. Nothing to add so I refer you to last weeks update, everything remains in place. Must be noted though, that momentum does seems to be fading. More during the week. Closed all option positions in the last half hour when selling got heavy, probably just profit taking ahead of the weekend, but maybe not. An important target was reached on the Nasdaq which I will post soon. Profited on long Call, lost on long Put, profited on both short Calls and Puts.
SP:SPX
by csmottola71
Emotions In Trading: Biggest Account KillerTrading is fun and every trader is happy when their trades move in the right direction, but when a trade goes against you, you will experience a lot of emotions: Fear, anxiety, regret, doubt, maybe anger… … and these emotions in trading can lead to some bad decisions that could kill your account. In this article, I’ll show you how to control your emotions in trading so that you become a more relaxed trader. 1. Recognize Your Emotions When trading, you WILL experience emotions. The main emotions are: Excitement Greed Fear Anger Frustration Let’s talk about these emotions and how to deal with them. Emotion #1: Excitement When trades are going in your favor, it’s natural for you to be excited. We all love to see “green” in the account, but here’s the problem with that: when trades are going in your favor, you may be too excited and take on more risk. I have seen this over and over again, especially when trading “The Wheel” options strategy. During the first few trades, traders are usually very careful. They do a great job in picking the right stocks, then they take a few good trades and their account is up nicely! All of a sudden, they get overconfident. It seems that the trading system can’t lose, and so they increase risk because “things always turn out for the best,” but that’s when trouble starts. You’re no longer looking for “the best” trades. You feel invincible and want to make as much money in a short amount of time as possible. You start trading with more & more risk, and start choosing stocks that you shouldn’t choose. Here are a few examples: TLRY, SPCE, WKHS, LABU The premium is attractive, and you thought: “I’ll be fine, and if not, I can fly a rescue mission like Markus usually does,” but then you get stuck in a trade, like some of you are. So please be careful when you experience excitement because it quickly leads to overconfidence, and the markets like to show overconfident traders who’s boss! Emotion #2: Greed Next on the list of emotions in trading is greed. Greed is okay as long as you don’t let it take over your trading. My P&L so far is $69,205 at the time of this writing: My goal is to make $15,000 per month, and thus far, I have made almost $70,000 in less than 4 months! I could get greedy now and say, “Why not $20,000 per month? Or $30,000?” But I am going to keep trading with discipline and make sure that my greed doesn’t get the best of me. Be humble! Be grateful for what the market gives you because if you are greedy and try to squeeze the last penny out of the markets, the markets WILL put you in your place! Emotion #3: Fear The next emotion on the list is fear. Fear is a natural human emotion that we all have. In trading, it’s easy to let fear take over because you can see your profits diminishing in front of your eyes! Here’s the problem with fear: it’s a very strong and powerful emotion that has the power to paralyze you, and cause you to have a bad day — a VERY bad day: You’re sitting in front of your computer all day staring at the “red” numbers — the unrealized losses. Your mind goes crazy because you’re already thinking about how bad your trading account will be when you realize all these losses. But what a difference a day can make. Have you ever realized how one day it looks bad, and the next day everything is green again? Here is what you should do when FEAR takes over: – Step away from the computer. Shut it down! Go outside. Do something else. – Take some deep breaths and relax. – Do not panic, this will cause you more harm than anything else! The market is always changing, it’s just out of our control; so instead of panicking, think about what we can control. Emotion #4: Anger Next on the list of emotions in trading is anger. It’s easy to get angry at the markets because it’s so unpredictable! You can never tell what is going on and when it will change. And why are there always losers? Dang, I should have bought 30 minutes ago… but now the price has gone up again?! Happened to me yesterday: Every single trade that I entered was timed wrong. I could have gotten a much better fill 30 min later! But: anger does not get us anywhere. Anger leads to revenge trading, which can lead to catastrophic losses. Keep in mind: Markets don’t know who you are. Markets don’t care who you are. Markets don’t know if you are in a winning or losing trade. Markets don’t care if you try to push them around. If you try to fight the markets, you’ll lose. It’s important not to let anger dictate your trades! Emotion #5: Frustration The last emotion on our list is frustration. It’s easy to get frustrated with trading for the same reasons that I just mentioned: You can never tell what is going on and when it will change. And why are there always losers? Dang, I should have bought 30 minutes ago… but now the price has gone up again?! Some people react to these events with anger, others with frustration. Frustration can lead to impulsive trading, and that’s not a good thing. The best way to deal with frustration is to take some time out from the markets for a few hours or even days until your head clears up. 2. Understand The Effect of Emotions While Trading In a moment, I’ll share a technique with you on how to control these emotions but let’s first talk about the effect of emotions on your trading. It’s ok to have feelings. It’s ok to feel these emotions — these are HUMAN emotions. The problems start when you ACT on these emotions while trading. As you have seen, each of these emotions is causing a reaction, and none of them is good. Emotions cause irrational behavior… … which leads to impulsive decisions, … which leads to and bad trades, … that often leads to losses or drawdowns. Emotions in trading can be the number one account killer, so you MUST be able to control them. 3. Control Your Emotions By using THIS technique I have been trading for 20 years, and I still feel these emotions. They say you shouldn’t have any emotions while trading, and based on my experience, that’s not possible! The important thing is to make sure that you don’t ACT on your emotions. So how can you control your emotions? Stephen Covey said it best in his book “The 7 Habits of Highly Effective People”: Focus on what you CAN control, and don’t worry about what you can’t control. And if you think about it, there are only 2 things you CAN control: Your Thoughts Your Actions You can’t control what the markets are doing, you can’t control whether Hindenburg Research is releasing a report on a company you’re in, you can’t control when a big hedge fund gets in trouble and has to dump a bunch of positions, but you can choose how you react. Let me give you a personal example: As you know, I am in RIDE . And the position is MASSIVELY going against me. I could be angry at short-sellers, especially Hindenburg Research. I could be frustrated with Lordstowns PR efforts, which suck. I could look at my unrealized loss every day and fear “What will happen it Lordstown doesn’t recover?” I could have a lot of negative emotions around it, and NOTHING would change — other than me getting bitter, and maybe even depressed. So I keep following my plan, which is selling more premium. This week, I will make $1,050 on RIDE , no matter what the price is doing. If it goes up, good. If it goes down… oh well, I can’t change that. I just know THIS: I won’t let emotions dictate my day, and I won’t let emotions dictate my trading. I believe the Serenity Prayer says it best: “God, grant me the serenity to accept the things I cannot change, courage to change the things I can, and wisdom to know the difference.“
TVC:NDQEducation
by rockwelltrading
Unusual Options Volume SKLZ $20 APR 30 Call SKLZ earnings date is May 04 2021 Earnings run up and break of down trend. Stock moved with increasing volume today. Possible break of trend into run up for the earnings with good possible upside if it holds at current levels. April $20 Calls Lots of volume today 9,000+ contracts traded. Heavy open interest on May 21 $20 thru $35 strike calls indicating more up side. Consider 21 May options calls above 21.50. Down trend channel break $18.11 Trigger $21.50 Target 23.50, 24.57 resistance, stretch target 27.50 Wide SL close below $17.00 Close contract before ER to be on the safe side.
NYSE:SKLZLong
by marketaction_live
3 Tips That Turned My Trading AroundHow did I get here? To moving from Germany in 2002 to the United States, and came here with $30,000 in my pocket. I put $20,000 in my trading account, and I put away $10,000 for a living. It wasn’t easy in the beginning. It was quite challenging. Now things are different. I mean, thus far in the first four weeks of 2021, I already made more money than I was able to put into my trading account in the very beginning. I know if you are there in the beginning right now, you may have $10,000, $20,000, or maybe even only $5,000 or less to get started. How do YOU get started? This is what I want to focus on in this article. You see, I’ve been trading for a long time and there are a lot of things that I’ve learned the hard way over the years, and I want to go over three very specific things that helped me to become a much better trader. Don’t Focus On The Outcome Of Just ONE Trade The first thing here is don’t focus on the outcome of one trade. You see, at the beginning of my trading career, I was really stuck on looking at what happens with just one trade, or what happened on just one particular day, but it is so important that you keep the longer range in perspective here. Trading is a marathon, not a sprint. One of the few certainties in trading is that there will be losing trades no matter how good you are, but instead of beating yourself up about the P&L (profit and loss) of one specific trade, keep your eyes on the bigger picture. For example, I woke up one day, and I saw my account was down $12,000 and it actually got worse over the day getting as low as $17,000. Now I could have chosen to panic and focus on the red, but you see, this is why I say trading is a marathon and not a sprint. You need to focus on the broader performance over the course of a few days, a few weeks, or even a few months. Usually when you look at your account and you look at the P&L, what are your eyes usually drawn to? The red, right? You will focus on the one trade that is not working out in your favor. I can relate to this because I was just like this in the beginning. Think about it this way, your hand has five fingers. If you take a hammer and you smash on one of the fingers, you focus on the finger that hurts, and not on the other four that are fine. It’s human nature to focus on the bad stuff. But you see, when you do this, you’re losing sight of all the other good trades and also how you’re doing over the course of the year. This is super, super important, and you see, one of the keys to my success in trading is consistency and growing my account systematically. I do this through SRC profits. SRC is an acronym. The S stands for systematic. I like to trade what I see and not what I think. This is why use indicators and have a trading strategy that tells me what to trade when to enter, and when to exit. The R in SRC profit stands for repeatable, by trading my plan. By trading and following my plan, I’m able to find repeatable, profit-making opportunities. The C in SRC profits stands for consistency. You see, I’d rather make slightly less money more often than bite off all my nails waiting for the big winner. So focus on SRC profits. Systematic, repeatable, and consistent. So remember, it is more important to focus on this than on one trade, right? We will have losing trades and it’s unavoidable. Don’t Trade On Emotions The second thing to remember is, don’t trade on emotions. When you’re trading with your hard-earned cash, there’s certain to be emotions involved. When trading there are two main emotions to deal with: fear and greed. So as traders, we fear that we’ll have a loss, and lose money. There are actually two ways to control this fear. Number one, you want to keep your losses small. While losses are part of the business, if you keep them small you won’t be afraid of them. So I like to use, as a rule of thumb here, the 2% rule. The 2% rule means you never risk more than 2% of your account on any given trade. Think about it, if you have a $10,000 account, this translates into risking $200 per trade. Let me ask you this. If you have $10,000 in your account and you’re risking $200, are you afraid of losses? Probably not, right? If you lose $200, it doesn’t wipe out your account. You can live to fight another day. Now, number two is don’t trade with money you can’t afford to lose. I know you might have heard this before, but I just want to tell you a story from when I started. In the beginning, I scraped together $8,000 to start trading. This is before I moved to the U.S. and got serious about trading, and trust me, I could not afford to lose this. This was 23 years ago, and at that time I was 28. And when I was 28, 23 years ago, $8,000 was a lot of money for me. It was everything that I had in my savings account, so this is why I was super nervous when I lost money. It made me cramp up and it paralyzed me. I was checking my account every few minutes, anxiously see what’s going on. Have you ever done this? You check your account every 30 minutes? This is why it’s super important that you trade only with money that you can afford to lose. I know easier said than done, but keep in mind, if you don’t do this it will actually hurt your trading. On the other hand, there’s the fear of missing out or FOMO. That is another type of fear, which is really, really critical. This also happened to me at the very beginning of my trading career. So you see, how many times have you seen a stock that has skyrocketed, and then you beat yourself up for not getting in? If you’ve ever looked at a stock, see it take off without you, and thought, “Oh my gosh, I should get in” then tried to chase the stock higher, you’ve likely realized afterward that this was a problem. A classic example of this that you might remember is the craziness that happened with GME, GameStop, not too long ago. People started getting in at $20, then $40, then some at $160. Another typical example is Bitcoin. If you look back at Bitcoin here, what do you think? Where did most people get in in 2018? Did they get in when it was trading at $600 or $700, or did most people get in when Bitcoin was trading higher around $14,000, $15,000 maybe at $10,000? Most recently Bitcoin went up from $10,000 to $17,000. Where did most people get in on this move? Probably closer when it was topping $38,000. See this is where it’s the fear of missing out. For me, when I trade, I’m not going for these hot stocks. I like to trade based on my PowerX Optimizer and The Wheel strategy because they help me to keep my emotions out of my trading decisions by telling me what to trade, the best time to enter a trade, and the best time to exit. You see, if a stock has moved past my entry, I’ll pass on the trade and wait for the next one, because there will always, always, always, always be another trade. Trust me on this one, because if you are looking at PowerX Optimizer, and you see when you run the scanner every day, it is showing you a bunch of symbols. So for today, The PowerX Optimizer brought up seven symbols that I could have traded. Tomorrow it will be another two to eight. So obviously there is always another trade and this is why you shouldn’t be too scared. This is the next one and it is a big one because after all, why do we trade? We trade to make money, right? But there’s a saying, “Bulls make money, bears make money, but pigs get slaughtered.” You see, as traders, we want to take the trade that makes the most money. We want to find the next Tesla, the next Bitcoin, maybe the next GameStop, but often times when we find them, we’re getting in way too late. So how do we battle this greed feeling? Well, this is where we focus on SRC profits and having a solid plan. Have A Plan This is actually the third thing that I’ve learned in my trading career. Have a trading plan, and don’t make it too complicated. A solid trading plan is a cornerstone of being a successful trader. There have been times when somebody will buy a stock, and when I ask them when they’re going to sell they say, “When I made enough money” or as someone said to me recently, “After it went to the moon,” right? When is this? Probably never. You got to have a plan and this is why I have these two trading strategies, which is The Wheel trading strategy, and it is the PowerX strategy. So what is a trading plan? A trading plan tells you three things, and I’ve touched on these already. A trading plan tells you what to trade, when to enter, and when to exit. When it comes to exiting, we exit either with a profit, or we are exiting with a loss because losses are part of our business as traders. So let’s take a closer look at the three elements of this trading plan. First of all, what to trade. This is in general, a decision that you need to make. Are you going to trade options, stocks, or futures? It’s important to define what you want to trade so that you don’t get distracted. See, for me personally, I trade stocks and I trade options. I’m buying options according to the PowerX strategy, and I’m also selling options, according to the rules of The Wheel strategy. Now, the next question is when exactly are you going to enter? And this is super important, think back to the idea of FOMO, the fear of missing out, right? You need to know at what price you want to enter a trade and you need to be able to move on it so that you get in, right? This is where limit orders come in handy. So this is where here for example, with when to enter I’m using again the PowerX Optimizer because it tells me exactly what is the option premium that I should be getting in order to achieve my goals. So for me, it is super important to have a tool that gives you this information and not guessing when you should get in. This is why for me, it helps me tremendously to do this on indicators, and the indicators that I like to follow are the RSI, the Stochastics, and the MACD. By doing this, you see, I can take the emotions out of trading which was rule number two. This is where, again, the PowerX Optimizer for me is an indispensable tool. Originally it was just programmed for me, my head coach Mark Hodge, and my son a few years ago. Now it’s available for everyone. It saves me hours and hours because it scans for me. Since I have my rules in place, I can quickly scan the charts to see what I’ll trade and what I won’t trade which makes my life so much easier. You need a great trading strategy, you need to have professional tools, and you need to have the right mindset. We can talk about strategies until we are blue in the face, but if you are not following the strategy, it is absolutely useless. What else does a trading strategy have to tell us? Well, this is where we’ll talk about exiting, and we need to know when to exit either with a profit, and in order to define this, we are using a profit target, or with a loss. For exiting with a loss, I always like to use, when it is possible, to have a stop loss. Using the logic “when I make enough money” is not a proper exit strategy. I know this because I did that in the beginning, and I was just swinging for the fences. I entered a trade risking $100 and I wanted to make $10,000, but it doesn’t work this way. Now, what are great exits? How can you define exits? There are several ways. You can use support and resistance, right? What are tools for exit rules? You can go for a certain percentage, it really depends on what works best for you. For me, it is a profit target and a stop loss based on the average daily range. The average daily range measures how much a stock move from top to the bottom, and a good rule of thumb is for a stop loss, you use one times the ADR, and for a profit target, you would use two times the ADR. For example, let’s pretend the ADR is 40 points, or instead of 40 points we could just say $40. So this means that my stop loss should be when the stock moves down $40. So if I have an entry of $850, we minus $40, this means at $810 I would get out. Now for my profit target, I would use two times my stop loss. So here in this case it would be $80. So again, if right now, my entry would be $850 plus these $80, right? So I would exit at $920. Now let’s just say I’m trading 10 shares, right? So this means that I would lose $400 if I’m wrong, but I would make $800 when I’m right. So I’m making twice as much on my winning trades than I lose on my losing trades. So stop loss and profit target based on the ADR. Now for The Wheel strategy, I do it slightly differently. For this strategy, I use 90% of the max profit. I can’t stress enough how important it is to be prepared when you are trading. If you’re trading without a plan, you’re failing. If not in the short term, then for sure in the longer term. Summary So brief summary. What are the three things that really turned my trading around? Let’s quickly summarize it. Number one, don’t focus on the outcome of one trade. Number two, don’t trade on emotions. And number three, have a trading plan. So these are the three tips that really turned my trading around, and I hope that this helps and that it helps you also to take your trading to the next level.
TVC:NDQEducation
by rockwelltrading
3
Selling PutsSomeone asked me about selling puts and I see a lot of people talking about selling TSLA puts The nearest low is at a price of $591, the trend is long and we had almost 40% drop. The implied volatility is relatively high but could be higher (if the IV will go higher it is bad for selling options) The option has 30 days left until expiration. If the price of TSLA will be above $590 the option will be worthless and all the premium will be received $1610 We need a sharp move up to the green line if we want to buy back the option before expiration and get all the premium. In the previous epic wave of TSLA people made lots of money by selling naked puts. Selling naked is for more advanced traders.
NASDAQ:TSLALong
by ZoharCho
5
How I Find The Best Trades Every Time: My 3 Step SystemOn my $500,000 margin account thus far, I’ve realized more than $65,000. Now, I put $250,000 in cash into this, and since it is a margin account I got $500,000 in buying power. Today I want to show you my three-step process of how exactly I find these trades, and I want to show you two very specific examples of trades that I took today (At the time of this writing on April 15th, 2021). So let’s take a look at how I found and executed these trades with this three-step approach. Step Number One: Find The Right Stocks So step number one is where I use the tool, the PowerX Optimizer, and the Wheel Scanner. I want to show you exactly what this does because the strategy that I use is called The Wheel Strategy. This strategy means that you are first selling puts to collect premium. The second part of this strategy is, you may or may not get assigned the stock. If you do get assigned, you move on to the third step where you sell covered calls. So here is exactly what I do, and what I did this morning. The scanner within the PowerX Software updates every two minutes and shows me a list of stocks that meet my criteria. What criteria am I’m looking for? I want to make at least 30 percent annualized in premium that I would collect. So here’s what I do. First of all, I know that the stocks the scanner pulls up already meet my criteria. Then I look at the charts to identify support and resistance, mainly support, which is actually step number two. Step Number Two: Look For Support I look to see if there is any support. This helps me figure out if I want to own the stock at the strike price that comes up on the scanner. So for example, American Airlines came up with a strike price, as you can see, of 20 or 20.5. So the key question here is, “Do I want to own (AA) at the price of $20.5?” Well, looking back at American Airlines to pre-pandemic levels in 2019. I see that American Airlines has been trading very solidly between $26 and $38. So it seems to be a good company to buy at $20.50. Again, this is my main criteria here, deciding if I want to own the stock at the strike price. However, in the short run, I believe with all of the uncertainty that is going on with the pandemic right now, that the airlines might be hurt. I mean, you might have heard a few days ago that Johnson and Johnson’s vaccine got labeled as potentially dangerous, and therefore it is paused right now. It also seems that around the world, the outbreaks are flaring up here in the United States. It seems to be under control, but worldwide there’s a problem. So do I really want to own American Airlines? They dropped down as low as $8. So is this a good price to own them? This is where I can flag them as saying yes, no, or maybe. Now let’s talk about the two stocks that came up this morning that I liked (April 15th, 2021). The first one was (PLAY). So PLAY, Dave and Busters, came up with a strike price of 41.50. This is where I thought, “do I want to own PLAY at $41.50?” I looked back and zoomed out a little bit to pre-pandemic times before the coronavirus hit. They have traded solidly around $38. They’ve been trading as high as $64. I thought about if I’d be OK owning PLAY, at $41.50. So this is where I sold puts that expire next Friday. So the idea here is that we are staying above $41.50 by next Friday. So here is what happens if I’m right. I sold 24 contracts and I sold them at 50 cents each. Since options come in hundred packs, that’s $50. So the premium collected for 24 contracts, times $50, is $1,200. $1,200 for a little bit over a week, with today being April the 15th. It expires on April 23rd. So in 8 days, this is not bad at all. Right? This means that I’m making $150 a day. Now, if it closes below $41.50 I get assigned, and I am okay with this because this is where I decided I want to own the stock at $41.50. The other one that popped up this morning was Schwab (SCHW). Schwab reported earnings and as a result of this. They plummeted down and there was some really good premium in there, so I sold the 63.50. I sold 16 contracts for 14 cents. Now, this is expiring tomorrow, so this is a different play, right? The premium I collected here was $224. So obviously way less than the premium that I collected here for PLAY, but this is a play that expires tomorrow. So we want to make sure that tomorrow, April 16th, if Schwab closes above $63.50 I just collect the premium and have nothing else to do. If Schwab goes below 63.50 by tomorrow this is when I get assigned. So the important criteria here is, for the Wheel Scanner, is the so-called premium per day, or PPD. So in order for my account size to make the 30 percent annualized in premium I want to see at least $100 per day. So with PLAY, I’ll collect $1,200 in 8 days, when it expires next Friday. This means that we are looking at $150 per day. Then we had Schwab, and we collected $224. If we count today, this makes 2 days, so this brings our PPD to $112. So my goal is to collect $100 per day, and I want to be in 5 positions at any given time. So if we can do this, this would be $500 per day. $500 per day (this includes weekends), for 365 days, comes to over $180,000 per year, and I’m doing this on a $250,000 cash account, which is a $500,000 margin account. So, and as you can see, this is a little bit more than the 30 percent annualized, as you can see here. If we divide $180,000 by $500,000, then we see it is 36 percent. So there we go. You know what, sometimes I achieve the goal, sometimes I don’t. Well so far, this year, I’ve realized $65,000 in profits. So this is REALIZED profits. Now I do have unrealized profits and losses, and we’ll see how this turns out. And this is in 4 and a half months. So I’m basically on track to make a little bit more than the 36 percent here that I have as a goal. I’m on track to make probably around $200,000 for the year. Step Number 3: Any Negative News? This step involves checking to see if there is any negative news. Here’s how I do this. I just Google the stock and click on “News.” When you click on “news,” it shows you the Google searched for news articles, and you can scan these for any negative news. What I’m mainly concerned about here are lawsuits, and clinical trials. When they have a clinical trial, they can either go very well or very badly. Possible bankruptcies, bankruptcy. So these are the key things that I’m looking for when I look for negative news. Summary So how do I find the best trades to trade? My three-step process is I like to make my life simple and easy by using the PowerX Optimizer and running the Wheel Scanner, because I want to make, on a $250,000 cash account, around $180,000 per year. That would be $15,000 dollars per month. For me, this is trading for a living. I can cover my living expenses with $15,000 per month. Step number one is where I get the technical criteria. Next is where you look for support and decide if you want to own the stock at the strike price. This is where you simply go through the scanner and say, “yes, no, or maybe.” Finally, is there any negative news? Because if it is too good to be true it is. You should definitely look up stocks on Google, click on “news.” So you can just read through this fairly quickly and make an informed decision. So that’s basically it. This is my three-step approach to finding the best trades.
NASDAQ:PLAYEducation
by rockwelltrading
1
$60,000 Explosion Big Short movie setupIn the movie, the big short Charlie Geller and Jamie Shipley took trades with options out of the money with low probability. This is an example of such trade, 100 options contract worth $6000 if SOS will run up again, this trade could make $60,000. If the price will move to $21, this trade could make $120,000 This also shows that options are leveraged, if you would like to buy the shares you would need to pay $39,000 for 10,000 shares. In this trade, the max loss is $6000, when buying the stocks the max loss is $39,000 How will it end? What do you say?
NYSE:SOSLong
by ZoharCho
14
My Planning Process Revealed In 4 Simple StepsIn this article, I want to show you exactly how I am planning to achieve more in 12 weeks than others achieve in 12 months. First of all, I’m not saying that I’m an expert on goal setting, because I’m not. I’m just sharing the planning process that works for me, it might be completely different for you. The Most Important Thing For Me In My Planning Process One of the things that I have learned over the years that works best for me is, I don’t create a plan for everything. Let me explain what I mean by this. Many, years ago, I heard about a concept that they use in the military, which is called Backwards Planning. And you might have heard about this. Backwards Planning The idea here is that you start with the exact goal in mind and then plan backwards. I have heard this example many years ago where it was used in the military where they say, for example, let’s say you want to invade a camp on the enemy’s territory. So the idea here now, is to go backward and say, “OK, what exactly has to happen right before you invade the camp?” Well, this is where obviously you need to have your troops surrounding the camp. Then you go one step backward. What needs to happen before you have your troops surrounding the camp? And I’m making this up here as we go. I don’t recall this example exactly. I was not in the military, this is just an example that I’ve heard. So in order to surround this camp with your troops, what do you need to do? You need to get your troops to that camp that you want to invade. In order to do this, first of all, let’s assume that this is on foreign soil, so you need to get your troops to foreign soil. So this is what the military often uses, so I was told, which is backward planning. The idea here with backwards planning is that you create a detailed step by step plan of what to do. Here’s one of the challenges. I don’t do this, because based on my experience, the problem with this is what do you do if something goes wrong? So let’s say that one of the first steps is that you are getting your troops on foreign soil, well what happens if somehow you can’t because there’s bad weather or you’re getting attacked? This is where I found that often when you do this, the whole plan becomes kind of useless. This is where for me, I figured out that planning can be overwhelming. It can make the process daunting and can make me feel paralyzed. I don’t know about you, but what happened in the past before I did what I’m about to show you here is, I got paralyzed. I never achieved my goals because I couldn’t get over the first hurdle of planning. I want to show you exactly what I do these days to avoid this. 4 Steps To My Planning Process Step One: I write down my goal. Step Two: I plan the next two to three steps, and here’s why. My idea is, and this is what I found to be true, when I walk the first steps the path will reveal itself. Imagine walking down a foggy path. You don’t actually see the end of the path where it is leading. When I have a goal, I realized that when I plan out the first few steps and start walking, as soon as I get towards the end where I can see, the path will again reveal itself. So this is where, going back to my planning process, it works really for me to plan the next two to three steps. Step Three: I take action and complete these steps. Step Four: When the fog starts clearing and I see the next step, then I add more steps or to dos to it. Planning Process Example This article is all about my planning process and how to achieve more in 12 weeks than most people achieve in 12 months. So let me give you a very specific example of how I’m doing this. One of my goals is to buy a resort in Mexico. Goal & Overview Usually I write myself a quick overview of what is it that I want to achieve. I’m meeting with my private Mastermind members usually three times per year in exotic locations to trade, relax and make money together. In the past, we have done it in the Cayman Islands, Bahamas, Puerto Rico, and Mexico and other locations, but finding a hotel with reliable Wi-Fi as well as getting all of our equipment there has been really challenging. Right now I think that there’s a tremendous opportunity because I know for a fact that the travel and hospitality industry is hurt because of Covid-19. I don’t know for a fact, but there might be a possibility to buy a hotel or resort for $0.60 to $0.70 on the dollar. So if that’s the case, it would be possible to make a 50% ROI within one to two years and that’s not bad at all, right? It could be even more, it could be 100%. So this is now where I write down a few to dos. This is where it goes back to my planning process. So I write down my goal and an overview of what I want to accomplish. So now you know why I’m doing this, what I want to accomplish here, and now I plan the next two to three steps. Planning Process Steps My first step is I want to get an idea of what kind of investment is needed. Is a resort around one million dollars? Two million dollars? Is it more, is it less? Then I want to get an idea if this is at all possible to make money with, because ultimately if I can make money with it, why wouldn’t I do it? I mean, just having a hotel to have a hotel does not make sense. So what’s the best location? The location should be up to 1,000 miles away from Austin and here’s why. I’m planning to buy a plane, and this plane that I have in mind right now has a reach of 1,000 miles. So I’m looking at possibly Mexico, Puerto Rico, Belize, Dominican Republic, Honduras, who knows. This is where I first wanted to find out what a possible price point is? Last weekend I was in Sacramento meeting with my head coach Mark, my CEO Debbie, and marketing director Jared. I shared this crazy idea with them and we had some fun looking for hotels online. Based on my research, I’ve found it’s probably between 1 to 2 million dollars that I would have to invest for anywhere between 20 and 30 rooms. That was fairly easy and only took me a few hours. I can now move on to the next step in the planning process. Now the question is, is it possible at all to make money with this? Because if not, then I can stop right here. Does It Make Sense? I have been investing in apartment complexes for the past five years. To give you an example, I bought an apartment complex with 48 units here in Austin for 2.3 million dollars. I’m making $30,000 in rent per month so I know how to run this. $30,000 in rent per month is covering my financing, which is a mortgage, also insurance. This is also taking care of the property management, utilities, maintenance, renovations as well as capital improvements. Now I know, having an apartment complex is not the same as running a hotel or resort, but I just wanted to see if this is feasible, and in a moment, I’ll show you why this is making sense. So you see, I already know on 48 units, which is quite a lot, on $30,000, I can do all of this and I’m making a profit. So that’s good, not a big profit but I’m making a profit. Now the question is if I need $30,000, let’s divide this by 30 days because now we are going to the resort, this means that I would have to bring in $1,000 in revenue per day. The resorts that I started to look into were around 26 rooms, 17 rooms, 22 rooms, so let’s just say that I will find something around the 2 million dollar mark that has maybe 25 rooms. This is what I’m looking for. So the key question is, can I make $1,000 per day in revenue, not in profits, with 25 rooms? It sounds like it’s possible, right? Again, I have no clue. There’s probably more vacancy, but if I can rent out half of the rooms every day, so 50% vacancy, and I rent them out for $80 per day, this means that I would have rented 12 rooms for $80, which is $1,000. I know that there’s housekeeping, so there’s probably more than property management and maintenance, right? But I believe that these are quite realistic assumptions. If they are not, and if you have experience in this space, leave me a comment below and let me know. Summary Here’s the important thing. Let’s tie this back to what today’s show is all about, right? How I get more done in 12 weeks than most people get in 12 months. Now, here’s the deal. How long did it take me to do the first two things thus far? Well, I can tell you four to five hours. And now I know whether it makes sense to pursue it before I go down a rabbit hole. What is my point with all of this? My point is to stick to something really, really simple when going through the planning process. Keep it easy where you set a goal, then plan the next two to three steps. Or if you want to go crazy, as I did here, we could do three to five steps. Then the most important thing is to take action and complete these first steps. Once you do this, you’ll see whether it makes sense and you can plan the next three to five steps and complete this process.
TVC:NDQEducation
by rockwelltrading
Bank nifty LongAll the levels with green line are a buy call and with a red line are shorting levels.... For me now bank nifty has entered into a bullish territory and won't bank nifty now till any sign of weekness. I will try to buy on dips bank nifty but only till I find a good risk reward and again I remind you downside my all targets of nifty and nifty Bank are not yet achieved...2 big targets are only done positionally we would try to play this bounce but positionally I won't carry any long as I still think there is more downside left ... All the levels are informed in the chart so enjoy trading❤️🙏
NSE:BANKNIFTYLong
by harshuofficial009
Best Brokerage Account 2021Let’s talk about the best brokerage account, and in order to do this, I want to compare five different brokers for you. I’ll be comparing tastyworks, the current broker that I’m currently trading with, Robinhood because many traders are using it, TD Ameritrade because it’s wildly popular, Interactive Brokers because it’s great for international traders, and we will talk about a new broker that I’ve been using for the past couple of months, so I have an account with them. I want to talk about this and compare them to the others and tell you why I really like this new broker and why I’m in the process of switching over all my accounts. The first thing to keep in mind when you’re comparing different brokers, you have to pick criteria that fit your needs. These are my criteria and they might be great for you, or your criteria may be different. So what I’m looking for when finding the best broker. My Criteria For Selecting A Broker So the first thing that I would like to know is how much do I have to pay in commissions per month? I use a certain baseline for this. With my current broker, tastyworks, I looked back over the past three months and I wanted to see how much I spent. From 1/1 through 3/31 I made 150 trades and traded 1,665 contracts. So I use this as my baseline in order to compare these different brokers. I took to see what if I make 150 trades, or 50 trades per month and 500 contracts that I’m trading per month. Again, for you, it might be different, but we need to have somehow a baseline, especially when we are comparing the commissions per month that I’m spending right now, that I would be spending on Robinhood, TD Ameritrade, interactive brokers, and this new broker that I’m trading with. Now, every single broker has some other fees, and you need to see which of these fees are important to you. Here are the ones that are important to me. I want to know if there any wire fees and if so, how much are they? Also, are there any assignment fees? Assignment fees are important to me because I’m trading The Wheel Strategy, and part of this strategy is getting assigned shares, so I want to know how much this will be. Information about their customer support is also important to me. What happens if I need help and I need to call or e-mail them? Do they have an online chat feature? So this is important for me. What about the platform? Every single broker offers a platform for you, so which one best fits your needs? This is where we get a little bit more technical because I want to talk about levels three and four. What does this mean? Well, it means that, especially when you are selling options which you do with The Wheel Strategy, you need certain option trading permissions, so you want to know how easily can you get level three and four if this is important to you. Now, last but not least, I love having live data. I don’t know about you, but I want to make sure that live data available with these brokerages. I also want to know how much it costs if anything. So let’s get started and let’s talk about the first broker here, tastyworks. tastyworks I am currently using tastyworks, and I know exactly how much money I spent on tastyworks. On this particular account, I spent $550 dollars in commissions. For the baseline of 50 trades and 500 contracts per month, I spent around $180 in commissions. Now for tastyworks, how much are wire fees? When I wire money out, which is once a month, it costs me $25. What about the assignment fees? The assignment fees for tastyworks are $5. I want to explain to you exactly how they are charging. So with tastyworks, they charge $1 per contract and they do have a $10 maximum. So you’re never paying more than $10. Even if you’re trading 50 contracts, you will only pay $10. They also have no closing fees and this applies to options trading. For stock trading, these days, trading stocks is free pretty much everywhere. So we want to worry about options here because that’s what I’m mainly trading. What about customer support? I must say their support is good. The experiences that I have had thus far when I contact them by chat are very quick. When contacting them through chat, they usually only have me on hold for three to ten minutes. Now, what I do not like about tastyworks? You cannot call them, and sometimes I would rather speak with someone on the phone, so this is why I’m not labeling it “very good,” I’m just labeling it as “good” because you can’t call them. As for their platform, I think it is pretty good. However, I’m just using a fraction of the platform, so for me, the most important function is actually placing trades. I’m not using any of the complicated curves that you can have and all of the analysis tools, but again, if this is important to you, then you need to make sure that this platform meets all of your needs. For me, it does what I need it to do, which is entering trades. Now level three and four is actually something that is quite easy to obtain with tastyworks. So no problems there, and live data is actually free. Robinhood As for Robinhood, how much would you pay in commissions per month? Well, Robinhood has always advertised you pay zero commissions, and that is true. For options trading, you also pay zero dollars, which is actually pretty cool. Wire fees are a whopping zero dollars with assignment fees being zero dollars. So thus far Robinhood is really good in terms of commissions, right? Well, what about customer support? Now, full disclosure, I do not have an account with Robinhood, so I’ve never contacted them, but based on what I have heard, it is pretty bad. What about based on what I’ve seen? I don’t know if you’ve been following the news, but back when we had the GME craziness, Robinhood restricted trading for several days. I don’t think that was fair. I don’t think that they should have done that, but they did. This makes it seem to me they don’t have their customers in mind. Now, again, full disclosure, I don’t have an account with them and never contacted them. I’ve just heard that customer support is pretty bad. What about the platform? I don’t know first hand, but I’ve heard it’s good. Again, this is where I go from hearsay because I don’t have an account with Robinhood, never had one, & don’t want one. In terms of levels three and four, I heard from traders who have an account with them say it is fairly difficult to obtain levels three and four. If you’re trading The Wheel Strategy, this is super important. As for their live data, it’s free. TD Ameritrade Now on to TD Ameritrade. How much would you spend with TD Ameritrade based on my baseline? You would pay 65 cents per the contract that you trade. So if you’re trading like me, 500 contracts per month, times 65 cents, that comes to $325. What about the wire fee? The wire fees here are also $25, the same as with tastyworks, but assignment fees are zero. Now, what about customer support? Customer support used to be good. Right now I would say it is decent. There was a time when you could call them they would pick right up. These days you are probably on hold for anywhere between 15 minutes and 2 hours because they got bought by Charles Schwab. There seems to be a lot of consolidation going on and because of this, and because of this, it seems that customer support is suffering. What about the platform? ThinkOrSwim is probably one of the most powerful trading platforms out there, and it is fairly complex. For me, I just need to enter simple orders such as buy and sell orders. So for me personally, it is too complex. It took me a long time to learn it. For those of you who have ThinkOrSwim, you either love it or you hate it. Either way, it is so complex, so you probably had to spend hours and hours learning it. Levels three and four are fairly simple to acquire, and also live data here is free. Interactive Brokers Now with Interactive Brokers, I personally do have three accounts. I’ve been using them since 1999. They’re a great choice for international traders. However, Interactive Brokers charges 65 cents per contract. So very similar here to TD Ameritrade. If I would trade on Interactive Brokers I would actually spend $325. The wire fee here is a little bit cheaper, $10. The assignment fees, if you get assigned, are zero. Now their customer support, based on my experience is pretty bad. I’ve tried contacting them by chat, by phone, by email, and if you’re trying to contact them by chat, you will most likely be on hold for at least 20 minutes. If you try to contact them by phone it is not unusual to wait 30 to 60 minutes until you get connected. Their platform here is actually simple to use, but I find it’s pretty clunky. So just if you want my opinion and again, this is just my opinion. You on the other hand might find this platform blazing fast and think it’s the best trading platform there is. Now, in terms of levels three and four, yes, it is fairly easy to obtain, but they charge you $14.50 for live data, so just keep this in mind. This is a monthly fee so you just need to know what you need. So with the new broker, and I’ll tell you in a moment who that is, but when I saw all this mess going on in February where several brokers restricted trading, I said, “you know what, this is not fair.” When I heard from some of you say, “My broker suddenly raised the margin requirements and I didn’t have a margin problem before and now I have a margin call,” or that you’re on hold forever before you get any customer support, I set out to find a great broker, and here is the new broker that I’m currently using. Tradier The new broker that I’m using is Tradier. I will move all of my accounts over to them because of what they’re offering. The commission per month, it’s a $10 flat fee. $10 no matter how many options you trade. This is a special rate for those of you reading these articles, and following me on YouTube. So I think it is an absolutely cool model because it is a flat fee no matter how many contracts you trade. Now, this, of course, is great if you are trading a lot of contracts like me. You have seen it, 500 contracts per month, with 150 trades, so I’m a very, very active trader. I think it is absolutely cool that instead of paying $180 per month, all I’m paying right now is a $10 flat fee. That is pretty cool. Now the wire fees are a little bit more expensive. The wire fees are $35, but again, I’m using it once a month. So, therefore, if I’m adding this up, all right, and I say, well, that is $205 per month versus $45 a month, and for me, that adds up. Right. It’s only a $10 difference from tastyworks, and I’m not wiring money in and out like crazy. I’m just wiring it out once a month and that is okay. So the assignment fee here is a little bit higher, at $9 as of right now. So over the past three months, I had 3 wires and I had 8 assignments. This is for the year. This means that per month I have 1 wire and approximately 3 assignments. So as you can see, this is why the assignment costs here for me are not that important. Again, these are my numbers, your numbers might be completely different, and that is fine. This is where the cool thing is you have probably your brokerage account statement, so you can take a look at that, and then you know exactly how much you’re paying right now. So the customer support, I must say based on my experience, over the past two months that I’ve been using them, is awesome. What do I mean by awesome? By awesome I mean that I can pick up the phone right now. I can call them, and within two to three rings, somebody picks up. The customer support team is in North Carolina, so I’m not going overseas, they are here in the United States. They have been super responsive by email and by phone. I don’t even know if they offer a chat on the website because I was just so happy that I can finally talk to somebody. Again, I’m coming from tastyworks, and on tastyworks, I’ve never, ever been able to talk to somebody because their business model is that they’re all doing it by chat, so I love this. What about their platform? Their platform is simple, and in my opinion, it is super easy to learn. So you can learn this platform in literally 10 minutes because that’s what they do. They just say, hey, if you want to enter trades, which I want to do, it’s fine. They don’t have all of the bells and whistles that the other platforms have. So I would say it’s more comparable to Robinhood instead of a platform like TD Ameritrade because with Robinhood you just enter the trade and it is good. So it’s simple and easy, does the trick for me. Levels three and four are super easy to get. And live data is free. So this is what this new broker is all about. For our members, we have created in our private community a special discussion group, and in this discussion group, we are here to help you, support you, with this particular brokerage. Which again is called Tradier. So, for example, people have been asking if they open an account for business, an LLC for example? And the answer is yes. So you can ask us if you want to, of course, you can contact them. So this is what we have here. We have a Tradier discussion group. We do have tutorials for you such as videos on how to open an account, how to set up a paper trading account, and that reminds me, they offer paper trading. As you know, I highly recommend that you trade on a paper trading account first. There are also videos on how to fund your Tradier account, how to place a stock entry order for the PowerX Strategy, how to place options order for the PowerX Strategy, entering orders for The Wheel Strategy, how to check your positions. Summary OK. So, again, my promise is to show you the best broker and this is the best broker for my needs. Now, for your needs, it might be different, but I thought that I compare here that the top five brokers that most traders are using right now.
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by rockwelltrading