[Music] w [Music] [Music] all right all right hey everybody it's a special July 3r Wednesday Allstar options jam session glad you're here uh it's a holiday week it's a weird holiday week I I'm I'm very confused with the trading hours this week we have a half day trading day today and then the market is completely closed tomorrow Thursday and then we're open a full day on Friday look I don't know about you guys but I'm going on a little vacation I'm heading to Vegas going to see a concert so I'm not doing any trading on Friday Friday as far as I'm concerned is a holiday anyone who's uh making any speculative bets on Friday this week you might have a problem all right just say all right so anyway today it's July 3rd 2024 and what we do here in the All-Star options jam session if you're new here we uh do a little highlevel review of what's going on in the market just a quick little little lay of the land and then we review action in positions that we have open in All-Star options we review trades that we've made any adjustments to any trades that we've exited maybe for a profit or loss uh and then we go through and update uh stops on some positions that are working for us or uh you know they just need updated stops so we do that uh and we'll do a quick rundown of new trades that we've put on at Allstar options uh over the past week but before I do any of that of course I have to uh before oh hold on my my uh sound went on sorry about that but before I do any of that guys I have to drop the old disclaimer uh everything we do here is for educational purposes only I'm showing you what I'm doing with my money and I hope that you learn something along the way all right so let's go to the charts let's start at the top let's look at the S&P 500 this is the Spy the ETF the tracks the S&P 500 as you can see we are on the cuser of breaking out again to new all-time highs it's it's h you know we had a little bit of a consolidation for about uh two weeks we we'll call it um but we're we're knocking on the door of new all-time highs here in the S&P if we bring up the q's which is the NASDAQ it's already at Fresh highs there uh so by all accounts at least by at the index level we are in a confirmed bull market now on an individual stock basis it's it's not as uh not as clear-cut uh these IND indexes uh are being driven by many of the large cap names no surprise this is an old story right we've been hearing about this for years really um you know some of the stocks down the cap scale uh whether they're midcaps or small caps aren't necessarily participating in the bull market with as much Vigor as we would like uh but hey we can still play the big names right we can play the microsofts and the Amazon and the and the apples and all that if we want to there's no rule though says we can't um but hey we're in a bull market so that being said uh I I am uh leaning more towards wanting to have bullish trades on I do have some bearish trades on the books uh if nothing more than uh for portfolio hedges in fact I put a one on this week which we'll talk about um but uh the odds are fa favoring the Bulls here and by the way guys uh I just want to point out I've got the chat open here in YouTube so if you have any questions about anything we're talking about uh throw it in there I'll do my best to answer hey shout out Stephen Roman what's up Roman good to see you buddy all right let's get into action we've had uh this week uh let's start with uh I mean look there's no good news here we have two trades both of them bad news but that's okay that's okay because we have other good news elsewhere that's going to make up for it uh but in no particular order let's talk about Dr Horton this is a trade that did not work for us I mean right right out of the gate right and I I say this all the time if I'm gonna have a losing trade I want it to I want it to be a losing trade quickly right I just want to rip the Band-Aid off get out as quickly as possible not only to limit the losses but also just to you know free up my mental Bend with the focus on the things that are working right we want to do more of what's working and less of what's not so if trades aren't working I'd rather they just get off the books quickly and DHI is one of those uh we got into uh this was a little bit of more of a creative trade we wanted to be long than November 170 calls which we did but we financed that trade by selling some July 140 puts and some August 170 calls against it maybe we got a little too cute here maybe okay okay it bit and it bit us when we put the trade on we did it for a 26 Cent next net credit to get started so we are we already I'm sorry net debit excuse me it was 26 Cents net debit uh to get in well uh 140 a close below or close below 138 was our Line in the Sand and we got that a couple days ago so we closed the trade it cost us 581 net to get out so all in this trade lost us about six bucks not not uh not ideal not what we want um maybe one of the larger losses we've had in a while but still within the realm of what's acceptable uh for our portfolio we sized the position in such a way that if we suffered a large loss on the position it wouldn't necessarily hurt our portfolio all that bad you guys have heard me say this many times I'm a broken record but if you're first- timer here I generally size my positions in a way that I can't lose more than 2% of my portfolio on any one trade and even that's a bit much for me personally I generally like to keep it around 1% but I will risk as much as 2% depending on you know either if I'm feeling really confident about the trade or maybe if it's just a higher price stock or or higher priced option it just you know there's no way to get it any smaller than that uh but 2% is certainly my line of the sand I don't want to risk more than 2% on any one trade so we're out of DHI that's DR Horton uh so s ARA see you later uh next up rocket this one man this one really looked like it was going to work out great for us we got into this trade uh back on uh May 3d uh we bought the September 15 calls for a buck 30 and for about uh the first week it was looking great especially early on in this candle you know early on in the day it was traded as high as550 but then it rolled over on its intraday that was ominous uh came right back into where the area where we bought it and then it did it again right we had another run another great candle this time got us up to you know nearly 16 bucks intraday but then it rolled over and closed on the lows that's twice those should have been the the red flags right you know fool me once shame on me fool me or fool me once shame on you fool me twice shame on me I got fooled again right there uh so uh the stock closed below our our stop- loss level which was 1350 uh just a couple days ago we closed to position got out for 50 cents hey we paid a $130 we got out for 50 c better than a uh better better than a 100% loss which again when I buy calls I say this all the time when I especially when I buy calls I size the position in a way that I fully expect that there's a very good chance that these calls could be at zero right like if if if the stock reverses on me hard all of a sudden you know the fair value of the options might be let's say 50 cents but there might be zero bid right depending on what market makers want to do uh so I always size these positions in a way that you know if it's zero again no more than 2% hit to my portfolio in total ideally closer to 1% so the fact that I got out for 50 cents instead of zero that's not a win but that's the kind of loss I'm happy to take uh any time all right so that's it for closed positions uh this week uh now let's get into U our updated stops we have a number of positions uh to update let's start with ap anol only because these are July expiration options uh these options expire in a couple weeks and so we need to be a little bit more aggressive with our trailing stop the great news here is that we're already sitting on a very nice win in this trade we got into this to into the July 60 calls back in February late February we bought them for 80 cents and this thing I mean other than one little test of it's 50 moving average here in in April this thing's been nothing but a monster for us working exactly the way we wanted to uh according to our plan that we laid out on day one when we put the trade on we wanted to sell half of our calls when we got above 65 which we did uh on May 15 and we wanted to sell half of our position we did so we locked in $687 effectively these are weird numbers because there was a two for one stock split along the way by the way guys in fact when we actually got into this trade we were along the July 120 calls but there was a two for one stock split so all these numbers are adjusted so effectively we sold half of our position at 687 and we bought them for 80 cents so we're already sitting we've already locked in a great win the calls we have now the half of the remaining position that we have on now that could go to zero we don't want it to but it could and we're still sitting on a very nice win one of the best wins of the year for us uh but obviously our calls are not worth zero right now they're still $7 in the money again we're long the 60 strike calls in July Stock's currently trading at 67 so we got $7.50 of uh intrinsic value in these calls right now but we don't want to give much back on that okay again we're closing into expiration so short leash going forward as we roll forward as we get closer to expiration I will be trailing a mental stop I don't leave a me I don't leave a uh a stoploss order in the market not with options that's a bad idea I just set alerts on my trading platform and when certain price levels are hit then I go in and take action and I work my exit using limit orders but that being said our current stop is 6650 that is the lowest price that uh AP has seen over the last five trading days going forward I will keep raising my stop when I can to be right below the the the three to five day you know previous three to days low that's that's my that's my hubric was that the right word no that that's my metric that's my algorithm so to speak for for trailing stops I want to keep the trailing stop just below the previous three to five day low I use a little discretion okay it's not perfect it's not an exact science U but right now 6650 is my current stop I will be updating these stops as this hopefully as the stock moves higher over the next week or two and I'll update those stops in the chat room uh for everyone uh so if you're not in the ASO chat room are you even here come on get in there uh for for members of All-Star options you can get it if if you're a member of Allstar options and you're not in our chat room shoot me an email uh we'll get you the instructions to get you on there info at Allstar charts.com all right so stop is updated in anol now let's go to the rest again in no particular order addi we are Long December 240 calls we got into this trade uh back in May we've had a very nice Gap in our favor a little while back we sold half of our position at 14 so we're free riding in this position too just like a AOL we haven't locked in any gains we've locked in the worst case scenario here is it's a scratch right because we bought them for seven bucks we sold half of them at 14 that paid us back all of our original risk capital in the trade so now whatever we can sell the remaining half of our calls for that's pure profit hopefully it's something more than zero right uh but again the worst case scenario is Adi can trade to it could go to zero tomorrow worst case for us is we end up to trade in the scratch but right now I'm moving our stop up to 220 which which approximately corresponds with the rising 50-day moving average right now um I would like to see ADI recapture highs uh that were set you know if we if it gets back above 240 then we will use this area here as our next stop loss L level if you want to be more aggressive uh I don't hate using 223 or two I'm sorry 224 as a stop but for me I'm going to give a little bit more latitude I feel like it's earned of that since we've already sold half of the position I I'm less worried about this one now uh but for 220 if we're below 220 we don't want to be in the trade anymore regardless and whatever we could sell the calls for at that point hopefully something um that will be pure profit for us all right moving on Bank of America finally this thing's breaking out I feel like this thing been just just toying with my emotions over the last two weeks uh but yesterday I feel like we got a decisive breakout uh it's moving in our Direction I'm feeling really good about this one we're long the December 45 calls we paid a dollar for we're now moving our stop up to 39 all right so 39 is our new stoploss level in Bank of America hopefully we never see that level and if this break if this breakout follows through we won't but for now the stops at 39 all right next up eBay um we are long the October 5565 bull call spread that we paid 250 for this trade is uh not going anywhere for us at the moment um we are raising our stop now to 52 uh which is getting pretty close right now uh if it if it loses the 52 level then that means we're breaking lower out of this consolidation and that's not a good sign that's no bueno for our position so risk management is job one if we're below 52 we are out and finally Google Google's working great for us um we have a protected put protected in quotes a protected risk reversal where we uh where we you know a typical risk reversal that that we typically do is we sell a naked put and use those proceeds to buy a call and we like to do it for approximately a net credit generally this one's a protected risk reversal because we actually uh we we did a we sold to put spread which is defined risk and we use that those proceeds to buy a call spread that has a capped upside so our downside is is capped or our downside is limited which is great but our upside is capped that's the tradeoff but either way we put this trade on for a 30 Cent net credit and uh it's been doing nothing but chug higher for us we got into this trade back in uh in mid April we had a nice earnings Gap here that helped and now we are moving up towards our price Target 190 guys if we get if Google gets two and through 190 I'm going to take the whole trade off and book The Profit whatever it is okay I we're sitting in profits here now which is nice if we get to 190 I'm GNA take profits there because we're our our profits are capped above 190 so no sense in uh trying to squeeze out an extra nickel or a quarter or whatever um let's just take it off me personally by the way guys I didn't put this uh in the trade plan uh but me personally I already covered the short put spread I was able to cover it for like I think I covered it for 20 cents could probably cover it for even cheaper now I just it was just tying up buying power and it wasn't really adding any more to the position at this point so I closed the put spread if you're in this position with us and you're still in the put spread maybe consider taking it off it's really cheap it's not going to cost you much and at least it'll take some risk off out of the trade but more to the point 190 is in our sites and if we get there uh we'll be taking profits so that's the uh that's the update on all of our stops um now let's review quickly new positions that we've put on uh since uh since we last spoke um now these new positions again for people who are new here we publish a detailed trade plan for every one of these positions we tell you why we like the setup what's what option strategy we're using to express our thesis where our risk management levels are you know how and why we will exit the trade for a loss and we also lay out the plan for taking profits if there is one sometimes we don't have a plan for taking profits sometimes we just want to let these things go to the Moon if we can right we want to give it that opportunity to do so not always but sometimes but usually we have some kind of a plan for you know maybe taking part of the position off um or taking half off or maybe taking the whole thing off all those details are laid out on the blog post for every one of these trades if to find it go to Allstar charts.com go to the m M section go to the option section you will find a detailed trading plan for every one of these trades if you don't have access to that shoot us an email info Allstar charts.com we'll get you hooked up all right quickly I mentioned earlier I teased that we put a bearish trade on since we last spoke and that was in this one Five Below I mean how can you be anything but bearish looking at this chart this thing is an ugly chart uh we put a a bearish trade on um and we think uh we think that this thing is just getting started on the down side at least that's our plan but Five Below is a new trade a bearish trade next up is Reddit uh we're loving these fresh breakouts here in Reddit uh this was a a recent IPO had IPO back in March we are making or actually yesterday was a new closing high for Reddit the first closing High since the you know initial uh IPO thrust right we always there's always a little wild action in the first few days following an IPO but then it consolidates for several months and now yesterday was a fresh closing high for Reddit I think this stock has a long way to go it's one of those names that like if it gets going you know for those of you who've been with us for a while you might remember that Uber trade that we put on end of last year Uber I have the same sense with this one as I do with Uber it's like a sexy name people love it uh people are very active in the Reddit Community Reddit the the the the home for Wall Street bets and all the degenerate gambl and I just feel like it's one of those names that if this thing really gets some momentum going I don't want to say it's going to become a meme stock but it has the potential it has the ingredients not to mention there's a high short interest uh so it's got all the characters I'm not saying that guarantees this is going to be a winning trade right we've been wrong before and we'll certainly be wrong many more times again uh but this has the ingredients that it can potentially become a big winner so we are bullish on Reddit uh next up uh the banks we're loving the financial sector that we think there's some great opportunities there we're already in Bank of America as we discussed earlier we added some Bank exposure this week in Morgan Stanley um this chart is just a one-year chart but really the significance with Morgan Stanley is that it is breaking out of a 25e base that's kind of unbelievable I I was shocked to know that we were only just now breaking level highs for Morgan Stanley but it's true and uh so we've positioned uh for a potentially a long ride here in Morgan Stanley again all the details uh can be found at Allstar charts.com all right uh I'd like to leave you guys with this slide here uh some people have asked for this just like a one little slide that encapsulates all the updated stops so take your screenshot now pause the video if you need to uh but that's a recap of all of our updates updated stops and as always if you have questions about anything that we discuss here if you want to get involved in Allstar options if you're not here already shoot us an email info@ allstart charts.com and guys I mentioned this uh last week if you like the charts that I'm sharing sharing here um or using I you know the last few months I started using trendspider dcom my friends at trendspider hooked me up with these charts and they're great if you like what I'm using and you want to try something new go to Tren spider.com check them out and and if you use promo code Shan 50 if you sign up for their services they got they got deals for 50% off their subscription plans using Shan 50 so there you go little gift to you from me from Tren spider hopefully that helps you out hey it's July 4th tomorrow go America enjoy your fireworks enjoy your grilling enjoy summer I'm going to be on a little I don't want to call it a a vacation I'm really just going to be going one day I'm going to Las Vegas tomorrow going to a concert on July 4th I'm very excited uh so we'll see you next week have a great weekend everybody tradeing well we'll see you next time bye-bye [Music] [Music]