Hello and welcome to the Investor Master Series. My name is James Boyd. We welcome all of you here today. We also have Connie Hill in the chat. We welcome her. We also call ourselves the two redheads. So, we'll take care of you. Of course, if you talk about two redheads, myself and Connie, probably going to be a spicy session. Okay, if Lisa Jack is here, it'll be extra spicy as well. All right, a little fun there. Now, just real quick, some of you thought I was going to wear the green shirt. Let's just say this is a light blue or gray, and I think we're not quite there yet for the green shirt. We'll talk about that, but it's hanging up, ready to go if we need to pull it out.
Now, just real quick as we get started, remember our topic: we'll talk about stocks. We'll talk about options, technical analysis, fundamentals; options try to bring it all here together. Now, remember when we talk about options: options carry a high level of risk, not suitable for all investors. The information provided here is for general informational purposes only. Also, remember that Schwab does not recommend the use of technical analysis as a sole means of research. Remember that investing involves risk. We will be using the paper money software application, and as we get started here today, remember when we talk about investing or trading with short options, those can be assigned at any time up to the expiration, regardless of the money amount. Now, our set agenda that we have, which, by the way, it feels like it's been forever.
Okay, really, we did a class on Friday, but here it is Tuesday, so it feels like it's been forever. So, first off, we're going to talk about investing. First off, we always want to kind of talk about kind of how's the market setting up, okay? Is it short-term bullish? Is it pulling back? Where is it? We'll talk about kind of where the markets are and where the sectors are. We're also going to talk about some current positions that we need to address. We want to talk about some positions that might be getting some potential exits, perhaps, or stop adjustments. And then we're going to talk about a number of new positions. Now, just real quick as we get started, I want to hop right into this page. So, first off.
First off, we do have a playlist for this class. That's the playlist, and that's a link to this playlist. And what you're going to notice is last week we talked about profit-taking and managing risk. We always try to talk about things that we think might happen. We don't know if it's going to happen, but today we'll kind of further that a little bit and kind of also talk about maybe there's some stocks or options that might be set up for some bounces. So, I think a realistic goal is to probably talk about some management, but probably also three to four new examples. Now, let's go ahead here and just hop right into the S&P 500.
The reason why we talked about kind of profit-taking last week, okay, is when we look at the shorter-term moving average, and I'm really blown in, which is fine. Okay, I resumed in. Kind of we had this red line in the moving average, okay? So, I'm just going to count the number of days. One, two, okay, three, okay, four, and this is day five. Now, when? Whenever we have a red line in the short-term moving average, it probably just says on a majority basis, if you looked at most of your positions, most of your positions are probably down from the recent high, where we were on like the 13th, 14th. Now, that does not mean all of them are, but the majority probably will be. That's what we talk about, the index, okay?
Now, when we look at the S&P where it is, are we kind of at a point where it might be starting to bounce yet? Well, when we go back and take a look at this, this is really the old breakout level. Okay, and that breakout level was really right at 56. 68. So, if we were going to ask the question, do we see that short-term moving average go from red to green? The answer is not yet. That's why we can't wear the green shirt yet, okay? So, we don't see that yet, okay? Now, we're starting to see some bullish candles near a support area, but you're thinking this is where it could bounce, but we need to see a little bit more.
I mean, something helpful would be to get above the high of the low-the low day, the low day being the lowest most recent red candle on the 15th, we're not there yet, okay? It's been a struggle to even probably get above the middle of the large green candle from the 15th. So, the S&P a little bit under pressure. The Dow, excuse me, the NASDAQ itself, kind of at that same area. It looks very, very similar, okay, to the S&P, to say the least. And so, one thing I want you to kind of remember is when you have the short-term moving average red, the path of least resistance is when markets are up, people tend to sell. When the markets are up, people tend to sell. Why do they do that?
Well, they're trying to sell on those price rallies when the price is below the moving average to try to get a better price to sell into. So, it doesn't matter if the market's up 50 points, 20 points, if the price is still below the moving average. The likely thing that's going to happen is people are going to sell. People use uptrends in the market to sell into strength and to capture those gains. Now, Russell itself, RUT, all the way back down to where the old breakout area was. Now, some investors, they might like that candle, okay, and say, 'Hey, it's kind of looking like a hammer, okay, down near the support area.' Again, same thing. The low of the high day is the 15th. This is a start.
You like to see that investors are maybe trying to buy the support. And the thing you've got to remember is, you might be bearish. You might like to say, 'I think this market is going to crash.' But you've got to remember, most market participants are not that mentality. When markets pull back, individuals and or portfolio managers tend to be long-only, which means when the markets drop, they try to use the pullback as a way to dollar-cost average or enter positions. Do not forget that. Now, when we talk about, let's say VIX, which I've been watching – okay, VIX crossed over to the upside. What does that probably mean if the volatility, okay, you see the moving average crossover? What does that typically mean for indexes and/ or stocks?
Well, if we see the VIX itself going from a red to a green, you know, volatility rises, stocks, indexes most likely pull back on an average basis. It crossed over. Today, we almost got up to 18. So it's not crashing; it's not shooting, I should say, to the upside, but volatility increasing. Maybe some people want to buy protection for their positions. Okay. So that's not the greatest thing. Okay. We like to see this kind of fade and drop back down. So remember when that volatility goes up, price level-wise, and the short-term moving average goes green, you know, you're in that pullback phase. Now, we'll also talk about some positions where we can Knox. We'll also talk about what type of trends they are in.
Now, when we take a look at the sectors, what sectors are you watching? Now, I want to kind of pull up some things that I thought were interesting. Staples, been a non-factor, been pulling back for a while. You look at utilities, kind of sitting there trying to reverse, nothing to write home about yet. Healthcare, well, they might need to check themselves into the hospital themselves because that has been like a, an avalanche of price action to the downside for healthcare. And if you look at real estate, it's pretty much been sideways. Okay. Kind of like Staples, not a whole lot to write about. Okay. So when you look at those four areas, not great. Now we're just capturing the average. Okay.
Now, when we take a look at the, let's say the energy sector, which we talked about last week, better, but notice it's kind of been having this up move. Sell. Up move. Up move. Sell. Up move. Sell down. So it's not just clear sailing for energy either, but it's at least better than the other ones we've been seeing. The financials, which we talked about last week, better. We need to talk about this area. Why do we need to talk about this area? What are we seeing on the chart? Well, on that chart, what you're going to notice is that the short-term moving average went red. Okay. It's been red for the last couple of days. So what's the question we would ask to ourselves?
The question we would ask is, do we have any financial stocks that might be at risk of that group falling? Now, funny we should ask that question because we do. And so I want to go look and see, is there any opportunity to potentially profit, take, and or manage risk? Okay. Now I'm going to bring up the paper money account with that group in mind. Let's bring this up. Okay. And what I want to do, what I want to do is I want to pull up just any stocks that might be financially related. So here we are in the IRA. And so first thing, what you'll notice is a little different than what we've seen the last two weeks or so. We don't like this orange color, Trend four.
Price up near resistance. We do not like trend number one, Boo. Okay. We need to talk about that. We don't like that trend one there. We don't like this trend. And for here, okay, we don't like this five, here because memory; if you go for you're banging up against resistance, you go five, you're slipping down below the 10 period moving average. If you go one, you you've been, you're below the 10 and the 30, you're pulling back. Okay. Now that was an extension of what we're going to talk about when we look at the SPX and the VIX. Now, do you see any chart here that we need to address? That's fine. It's financially related. Looking down. No, no, no, no. Oh, Goldman Sachs right here. Right.
Hit me right in the front of the face. Now, Goldman Sachs. What is it? Well, it's a five, 10 short put and a five, 10 long put. Now we got 31 days. We don't need to do anything. That's not a smart comment. Okay. Because just because we have 31 days left doesn't mean there might not be some potential profit taking. And notice when we look at, let's say, a five, 10 short put and a five, 10 long put. And notice when we look at, let's say, a five, 10 long put and a five, 10 long put. Trend number four. Okay. Trend number four means we're kind of hitting resistance. Might people start to sell and push it down. Stock down about 461. When we look at the gain here, about 89% of the maximum gain.
Now, just so happens to be that there's $510 here that we might grab and put it in the envelope. Okay. So to say. Now, remember we kind of talked about it. If we can get 50% in the first 10 days, 65% with 20 days or so remaining, and then 80%, this is all that. Okay. This is at least, I mean, we have 89% with at any time left. We're at 31 days left. So that means our timing on this was pretty good. So what we're going to do is we're going to highlight both those lines, hold the shift key down, right click, create closing order, and then buy that back. Okay. Now, why are you buying it back? Well, because we sold it initially. Okay. So there it is.
Now, remember, we're trying to sell when the credit was high and buy back when the debit is closer to zero. So we're going to shut that position down, confirm send. And then what we're going to do, you got to remember is there's a commission there. Note that 390. Okay. Send the order. And now what you're going to see is we're going to take that. So the reason why we brought this up. Now, I'm just scrolling down and I'm asking myself, do we have any other financials? And the reason why I say this, I think when we do this due diligence of looking at the indexes and the sectors, we're not doing that just to waste time.
We're wanting to know, do we have any positions currently in the portfolios that could be at risk of what we're seeing on the indexes and sectors? Now, when I look at the margin account, by the way, we'll reset these accounts at the top of the year. If I look at, let's say, no, no, I'm just looking down to see if there's anything. What do we notice here? Do you see anything that might be financially related? Well, what? What you're going to notice is we got Visa. Okay. And Visa, there it is. Trend number four. Okay. Now, if you look at this, 31 days to expiration at 75%. Let me show you what it looks like. Okay. Now, when we pull up this chart, you kind of tell me what are you noticing on the chart?
Now, if we're kind of seeing maybe trend number four, it's probably highly likely that we're seeing the shorter term moving average red. Okay. Okay. Now, let me make this as clear as possible. The paper money account is trying to get in when that moving average goes from red to green. And it is trying to hold the position when that short term moving average is green. This is when the paper money account is most likely the most happiest. Okay. Let me put a little tongue there. Okay. Okay. Okay. And then this over here, when that moving average line goes red. This is when the investor starts to give back some of those gains. Now, luckily, it hasn't really given back a whole lot. It's kind of gone sideways. So, let's not make this complicated.
We're trying to hold when the moving average, short-term moving average is green. And we're trying to exit when the moving average, the 10-period, goes red. When it's good, the paper money account wants to be on it. When it's not good, the paper money account would rather be in cash. Okay. Class is over. Thanks for coming. Okay. Now, when we take a look at this, we're going to go back to this. We're going to go to this, that, right-click, create closing order. And we're going to try to pocket that one right there. 387, sell. And now, by the way, let's take a quick look. When did this position get in? It was two weeks ago. Okay. Two weeks ago. Where was that on the chart? It was right there.
Sometimes, just the squirrel gets lucky. And right there, there was a little. I mean, that's where the entry was. And the very next day, doink. Okay. Yeah. There you go. So that was the entry. Got a little lucky there. But hey, could have went the other way. Confirm, send. Note the commission. Send the order. Okay. Now, here's what we're going to do. Let's kind of talk about some. We talked about Goldman Sachs. We talked about V. We talked about exiting that position. I want to go back to some positions that you have mentioned. The one that has earnings tomorrow. Okay. Now, on this class, we like to talk about trading the trend. We also like to talk about maybe volatility. And we also like to talk about time decay. Okay.
So if you take a look at this, we see that Nvidia fell down below the 143 level. Has earnings what tomorrow after the close. Now there's two trades we're going to talk about. Number one: We're going to look at where the Nvidia position is. Right now, might we consider adding to it, but we're also going to go back to SMCI and we're going to look to trade this. And I know that is just stunning. Okay. But that also has earnings tomorrow as well. I think both of these could be pretty good examples of direction, but also volatility. Now let's take a look at SMCI first. Hey, money count doesn't have the position. Now, what are you going to now notice is there was kind of like a diagonal line; slope down, probably something about like that.
Okay. Now, when not the dangerous thing about this is, you know, we fell down below the horizontal and then we just skidded to the downside with no end in sight, price coming into the, uh, into the earnings itself. We actually see that, uh, it has gapped up. Now, the dangerous thing about this is that we could think that people are buying, but we also have to understand that people could have been short the stock. And to exit the position, they would have to what they got to buy. Okay. And if they buy, it gives the impression, all people are buying, you know, they're buying because they're covering their short position of stock. Okay. Now, are we saying that to everyone? No, let's go to the trade tab for just a moment.
Let's look at the volatility of this now on SMCI with three days remaining. It's 220 mama. Mia, okay, now, what I want to do is when that volatility is so high like that, it might allow the investor to still sell pretty far down, meaning on a lower strike or a lower delta strike and what we're going to choose in this case is you're going to see that there's a lot of open interest on here, okay, all the way down now, this is what three days remaining now, we're going to do a little of each, we're going to choose the expiration for this one. We're going to go into the expiration for this Friday, but we're also going to go into the expiration for next Friday.
Okay, now let's kind of now what I'm going to do is if someone said, James, what's the danger about about this is a lot of the negativity is probably already been built in. Hence, look at the price. Okay, but what we're going to show in this example is we're going to sell something right about the thirty-ish delta, pretty close. The premium there is a dollar. Now, if we sold one strike, okay, our one strike. And we sold that put and said, Okay, if we were assigned to buy the shares of the stock, it'd be about $2,600, so really not that bad, but you got to remember is, hey, it's stock, okay, we gotta plan for, but we own the shares of the stock, and if we did two contracts, $2,600 with a stock, it's about a $5,000 position.
Now, what I'm going to do is I'm going to sell the twenty-six and a half. Now, we might sell the twenty-six. 27 or the 26 and a half to try to be a little safer, we're going to sell the 26 and a half, we're going to push it to the mid-price, about 103. And what you're now going to notice is if I go to confirm and send, we're selling two of these. Now notice it says you picked that weekly option noted, also selling two of these, hence $1. 30 on the commission noted, how much are they setting aside to be in the position? $6. 52. I'm going to send the order. Okay, now, let's kind of look at this, let's kind of play the game of if the stock goes down $2, but the volatility goes down 50%, which probably not out of the question.
But what I'm going to do is let me kind of change one of these headings to let's say Theo, okay? So I like to kind of always think in my mind, like, 'Wonder if it goes down, wonder if it goes down two bucks, okay? Well, if it goes down two bucks from where it is now, okay, and the volatility-so if it goes down two bucks, that would mean that the option becomes more expensive to buy it back. Well, if we're sitting, if the option price right now is $1. 07, and the stock goes down two bucks, the option is $1. 80. So we have that difference, and that would be the potential loss. But if the volatility drops 50%, it's soaking up some of that loss.
It was like $1. 78, but the loss goes down to about $0.01.' 28, or that the theoretical option price goes to $1. 28. So the loss between what we're selling it for or sold it for, and what it theoretically could be worth with a $2 drop and a 50% drop in volatility, not as bad. We like, we're trying to use the volatility drop as a buffer if the stock were to go down. Now, quickly, we're going to go to the next, we're going to go to the expiration of next week. We're going to try to put, we're going to put two of these, actually about four of them, okay, in the IRA. Now, why, why, why, why, why? Well, we're going to go to about that Delta 30 again.
We'll pick that 26, the November 29th. This is the day after Thanksgiving, okay? Now, by the way, when you look at, let's say, the Theta DK, that Theta is $12-ish a day, okay? It's not guaranteed. The volatility can change, of course. But you've got to remember that Theta is going to be getting higher and higher as we get closer to expiration. The ones for this week, they're $29-ish, okay? Now, that's not necessarily captured if the volatility goes up, okay? Now, what we're going to do in this case is we're going to go to the IRA account. Same thing. Sell two of these. Push it to 152. So we're going to have four contracts total. On SMCI. Now, clearly, okay, they did pick up a new auditor.
Boy, could you imagine being them? Okay, tough day. And the biggest, actually, thing is they're trying to stay on the NASDAQ, trying to turn it around. Now, I don't know why they waited so long to do that, but maybe they couldn't find anyone who wanted to step into that. Now, so I'm trying to show the example of something that's had a deep sell-off, but also a good example of volatility, okay? Okay? So on a sheet of paper, you should really write down: 'The front week implied volatility is 214, and next Friday is really 172.' Now, I want you to kind of maybe even take a screenshot of that. Paper trade alongside with this so you can get a sense of kind of what's happening here with direction and volatility.
And keep an eye on that time decay. Now, let's go ahead and go back to the NVIDIA for just a moment. What is the current position on NVIDIA? I'll tell you. Well, so in the IRA account, got the 138 put and the 111. So when we widen out the strikes like that, it's pretty much telling us this is really like a cash-secured put, okay? So that one got filled on the IRA as well. When we go back to the margin account, do we have any position in NVIDIA there? We do not see it. So the only position that we have that I can see, no, check me on that, is we also have NVIDIA. And these are really the same. So we really have on this two short puts, okay?
We got a short put at 130, and we have a short put at 138, okay? Now, I'm going to go back to this, and we're going to do more of your classic vertical, okay? Now, if we wanted to, let's say, again, establish a credit, have a lower break-even, well, I would probably be thinking, I'm thinking about a short put vertical. Remember, on these positions right here, this 130, that, and then this one right here, notice you're going to see that 130, we sold it, and then we bought the 100, okay? So, on that right there, when you widen those out, this is really a cash-secured put, also known as a short put. But I'm going to make it where the strikes are closer together.
Now, on this, what we're going to do is we're going to go to the trade tab. What is the implied? What is the implied volatility like? Well, 116. Now, let's kind of look and see, is there any premiums here? Well, if we went to, let's say, the 137 STI, right? Well, let's see what we got here, okay? So let me look at open interest for just a second, 7,900. So if we look at the strike that has a delta right about 30, bid-ass spread a penny wide. Okay? Okay. Okay. So let's look at this, a $5 wide strike, selling the 137, buying the 132. Okay. Now, is this a good trade or not? Is it a good trade?
Now you've got to realize this, you can think it's going to do whatever, but when I say, 'Is it a good trade,' we're kind of going back to, like, do we actually still think it's above support? Do the numbers support doing this type of trade? Well, we've got a $1. 33 of potential reward, and we would have, in this case, about a $3. 67 risk. So the ROR for three days is 36%. Now, for many of you that trade vertically, I know what you're thinking. You're like, 'Man, I'd like to get 36% for 30 days.' Well, okay. So it doesn't mean that this is the best. It just means that there's more risk of price going up, up, and down. That's what it means.
So now, break even. Okay. So break even on this. Clearly, whatever strike that we sell, the 137, we want the stock to stay above that at the expiration or until it. Now, what you're going to see is the break even. That's not today break even. That's break even expiration. Now, for some of you stock traders out there, this is why people sometimes trade options. If you bought the shares of the stock, and the stock goes down $8, man, it's horrible. Okay. But if you did this type of trade, we kind of have some buffer. If the stock were to go down, the other buffer to this trade is volatility can offset some of that price decline. Now, max profit, max loss. This is for one contract. Note the commission.
Note the red line again. There we go. There it is. Now, in the IRA, what we're going to do is we're going to push this to about three contracts. So now, when we bring this back up, three contracts, these numbers have now been adjusted based upon the number of contracts we're doing. Okay. So let me kind of take a step back. We got out of Goldman Sachs and Visa. We saw a little softness there in financials. Then what we actually did is we went to the SMCI, trying to play a little earnings play, where the, volatility is sky high. Now, part of this, we actually said, could Nvidia deliver maybe fairly decent earnings? Could they maybe, perhaps even give us some guidance going forward? Now, the whole misnomer is like, hey, they gave good earnings.
The stock went down. You have to remember people historically bought expecting good earnings. Once they announced good earnings, people could profit take. That's why, okay, they got in historically. Okay. So I think people kind of get confused about that. They're like, well, what if the earnings was good? Why did the stock go down? Well, because people wanted the money. Okay. The stock, the ticker symbol was secondary. Okay. Now we're going to send the order. There it is. Now, are there any questions with that? Now, the biggest thing is when you take a look at Nvidia, James L says, Nvidia, too much risk over earnings. I mean, I don't know. Risk. So if we did this, let's say two weeks after earnings. Oh, we did this a day before earnings.
A thousand dollars is a thousand dollars. Okay. Now, let me give you a quick example of what I mean by this. Okay. Now, historically, we did a, what is this position down here? Can anyone explain what this is? Okay. Can anyone explain what these four? Four lines are and do we need to adjust anything? Okay. Well, whenever you have, so what you're going to notice is the long option is below. It's the 5,690 and it's the 6,060. Okay. For many, it's a thousand dollars, a thousand dollars worth of risk. Okay. And these things can go up, down, you know, things like that. But the thousand dollars of risk is still a thousand dollars worth of risk. Now, what you're going to notice is we have two short options. Okay.
And those two short options were short the SPX at 5,700. That's the put. And you're going to notice on the 6,050 call, we're over here. Okay. So, whatever options we sold, whatever options we sold, we wanted the stock, in this case, the SPX, to stay in between the strikes that we sold. Okay. Well. We're at 5,900. And we are like right here. Okay. Now, we could have said, well, yeah, the election's coming up, the whole nine yards. We don't know what's going to happen. Risk is risk. Okay. And by the way, that risk brings in higher implied volatility, which brings in a bigger credit, which also lowers the break-even. Okay. So you're kind of using some of that unknown to try to make the trade a little sweeter. Taste that. Taste that. Now, is there anything that we need to do to this position? Anything that we need to do? 30 days remaining, this is sitting at 61%.
61%. Now, if you take a look at this, now, notice on the calls, it's only at 40% only. Okay. So on the put side, what we're going to do is we're going to roll the put. Okay. When I say roll the put, what does that really mean? Well, we're going to exit these positions and then establish a new position. Now, we're going to go the same exploration, but we're just going to change the strikes. We're going to try to profit take on this, which is about $220-ish, somewhere in that ballpark. We're going to try to profit take on it. Now, what we're going to do is let me kind of highlight this. What is that gain? It's $260, $270.
So, this trade, is it trying to be directional or is it trying to be non-directional? Well, non-directional. Okay? So, the index went up and the index came back down at the end. Didn't care. Okay? But it's in between the short strikes. We're going to right-click on this, create closing order, and we're going to buy it back. Okay? Now, we're going to buy that back. Now, by the way, could that gain have been bigger when the index was overpriced? Over $6,000. Of course. Okay? Now, we're going to buy it back. Now, remember, whenever we get in these positions, we're trying to get a big credit. Okay? And we're trying to buy it back for a debit as low to zero as possible. We're going to say confirm and send.
Now, notice on the SPX, there's an extra commission there; note that, or fee, I should say, commission and fee. Note that. Send the order. Okay? Now, what we're going to do is: do we think maybe the index is still going to be sideways? Well, if we think the index is still going to be sideways, we're just going to change up the strike. Now, when we go down to, let's say, the 20th of December, which, by the way, my goodness, it's almost Christmas time, but we'll take it. Now, if we look at this, we're going to go down to the one we had before was $5,700. We're going to come up and say, what strike has a delta of about 30? Well, it's really the 58. 05.
Now, we got the calls. Those are $10 wide. So, if we went to a delta of 30, sold the 58. 05, we're going to right-click on that, sell vertical. Okay? Now, what we're going to do is, it defaults to a $5 wide spread. Okay? Okay. Right in and out, just a hair smidge. Okay? 58. 05, 57. 95, confirm and send. Now, I want to go back to, when was this position put on? Answer, the 22nd of October. Okay? Now, what you're going to notice in this class, not everything is directional. Some things are built on, A, neutrality, maybe like a covered call, a cash-secured put, a short put. Some things are vertical. But the iron condor is really more neutral, has a lower delta.
Now, when we come back and look at this position, this is when we put the position on initially, the whole iron condor. Fast forward in time, it's barely up any higher than where we are now. Now, for a little bit, we did go down some. For a little bit, we did go up some. But we've just kind of had this reverse. We've just kind of had this inversion to the mean. Not a whole lot of nothing. Now, if you're a stock investor, the only way you make money on a whole lot of nothing is if the stock, when I say a whole lot of nothing, what does that even mean? Just the stock goes sideways. The only way you can come out of that hole is you actually maybe get a dividend, okay, if they pay one.
But on options, we're trying to get that time decay and try to have that theta just getting higher and higher, where we can buy those options back for less and less and less. So we exited the ones we were in, and we're just going to the same expiration, going, doink, up on the strike. And what you're now going to see, there's the credit, okay? Now, when we look at the credit, minus the max loss potential, it's $215, $785, that's the max loss, it's 27%. Now, James, the other one seemed better because there was actually-Now, by the way, is this a new position? It is a new position. If you roll, it's a new position. You're not going to think it's not. It is, okay?
Now, what you're going to notice is how come this is not as high as NVIDIA or SMCI? It doesn't have the same volatility, okay? So it has lower volatility. The credit's less. The credit's less. The ROR is going to be less. So what we're going to now do is we're going to go confirm and send. Now, remember, note the commission. But when we talk about the SPX, there's an extra fee, and it's $1. 20 for-and by the way, we're going to do two contracts. And when we adjust for the two contracts, it's $1. 20 fee per contract, but we're doing two of these. Send the order. Now, I want to kind of bring out the question, why do we do some positions that are neutral?
Why do we do some positions that are bullish? Well, because sometimes, like we saw in the last two weeks, when our positions last week, when we looked at many of these gains or trades, they had a lot of gains because, well, the stocks went up. But sometimes when those stocks maybe flatten off or the index flattens off, is there anything in the portfolio that might potentially gain? We're trying to spread the ways in which we could be right. A stock investor, the only way they're right is if the stock goes up. I don't know about you, but we can't always count on the stock going up. That's why we try to do things like cash-to-gear puts, verticals, short-put verticals.
Iron condors try to have the time on our side, which is the only thing that is constant. Time decay. Okay? Now, I want to kind of go back and see if there's any questions. Any questions? Yeah, so what we would expect is when we're trading something like the SPX, the bid-ask spread is going to be wider. When we look at the volume on the SPX, we would not think that it's going to be wider. It's going to be as liquid as an NVIDIA, as an SMCI, as an Apple, as an Amazon. When you only have volume of 109, it's not that much. When we go back to look at, let's say, something like NVIDIA, and these others are Netflix, et cetera, when you look at some of these, the amount of volume that these have had, 1,000, 1,700.
So the SPX just doesn't have that much volume. So the fills are going to be harder. Okay? Now, I want to go back to just for a second, Netflix. Has anybody been watching this show? Buehler? Buehler? Okay. I've never seen that show. Okay. Now, I've got to tell you something really sad. Okay. We talked about the stop adjustment, right? We had a stock position, 30 shares of stock, and you're going to see that last week, it makes me so sad, it was stopped out, and it was stopped out at, where was it? $828. 81. That's the bad part. Now, I don't know. I think it was probably still about $2,000 to the good. But last week, when it got a little volatile in the marketplace, by the way, we also closed out the position on this short put vertical.
Okay. The trade didn't last very long. Okay. Now, let me go back and look and see. I don't have it there. Go back to the margin scale. Yeah. So, that trade, we did a short put vertical, capped with the profit there, and got stomped out of the stock position. And this is the good and bad part about stops. The stop, it got us out. It locked in the profit when the trade was executed and failed, but the dadgum stock went back up. Okay. Now, this is sometimes how it works. James, I got stopped out. When the trade was done, the stock was really bad. Only to see it go back up. You just got to understand that sometimes with stops, you're just trying to grab some of that profit. Okay.
Now, we kind of joke that somebody's watching TV. Now, here's the trend of netty flicks. Okay. Now remember, when we're looking at this chart on a weekly chart, the paperweight account is trying to be long, fill in the blank, when the moving average is green. That's probably going to be when there's a greater potential of happiness. Why is that? Well, probably you have higher highs and higher lows. Now, last week, if we look at this, what you're going to notice is that we did very tight stop losses. We set stops underneath the intraday low. Set stop underneath the intraday low. And on that red candle, as we set the stop on the intraday low from the previous day, it snapped down and it stopped out.
Now, Monday, which I'm still fighting back from sickness, you're going to see that it had a big bullish engulfing candle, which engulfed massively the Friday's candle. Now, I wonder if we wanted to kind of be more optimistically bullish. Now, James L., thanks for being a contestant. Come on down. Now, let's say James L. was optimistically bullish. Now, I feel like James L. is an optimistic person. So, let's kind of just have a little fun. So, James L., if we decided that we were going to be a little bit more bullish and thought there might be upside potential on this, we're going to go to that call side. Now, let's change the strikes here. Strikes, we're going to go down to where it just says maybe eight or so. Okay?
Now, James L., you're not allowed to not play. You've got to come on down. Okay? So here it is. So let's say we change the strikes to 10. And what we're going to do is we're going to go the 20th of December with 31 days remaining. Okay? Now, what we're going to do in this case is we've got the 860 call on the left. And you're going to see the bid-ask spread about 65 cents. Now, the wider those spreads are, the harder it might be to really get filled. And the higher the price is, the same thing-probably harder to get filled. Now, the volume: so far, so far, 188. Now, what we're going to do is we're going to try to establish a long call vertical, say. James L.
says, 'What does the fib say? Okay? Well, so if we go back and let's kind of address this. What does the fib say? Okay? The move that we have on the chart from here to here, this would probably be a way to measure. All right? Now, the first one, this run up and this pullback, a very shallow pullback. The shallower it pulls back, the greater the chance that the price might try to squirt higher. Okay? Now, if we were to kind of look at this and say, 'Well, how deep into this extension are we? Well, let's pull it up, James L. Let's see what we have here.' By the way, everyone, tell James L. he's doing a great job. Okay? So, let's take a look at this.
So, what you're now going to notice on the chart, the reason why I went to the most recent flag that we had. Okay? Well, we had a pullback. We ran up and then we pulled back. Now, how many of you besides me have said, 'Man, if I would have seen this, I totally would have gotten into that first shallow retracement.' And I saw the hammer right there. And that's where I would have totally got in if I was watching. Right? Now, that's a stinky way to live. Okay? So, this is why we don't look at 5,000 stocks a day. We're trying to get used to a couple of stocks in the Dow. The NASDAQ 100. The S&P 100. About. 200 stocks total. That's the whole, whole stocks we look at.
Maybe some stocks in airlines and cruise lines and home builders in the S&P 500. But that's very situational. Okay? We throw in casino stocks. But those are not the typical ones, typically. Okay? Now, what you're going to notice is we got above the 161. The path of least resistance, back, back, back, back, gone. To really about that 261. Couldn't go to that 909. So, in answer to James L.'s question, what do the fibs say? Fibs are showing we got above the 161. Big bounce at the 161. Path of least resistance, maybe 909. Do we know it's going to go there? Absolutely not. I don't know what's going to happen in the next hour. Now, what we're going to do is we're going to buy that long call at the 160.
Okay? And then what we're going to do is we're going to sell the 865. Now, wait, wait. Is that a good idea? Or maybe widen this out a little bit. Okay? Does it make any sense to widen it out? Well, debit's going to be 248, max loss 252. If we widen this out, 860, 870, it's pretty much going to be the same thing. It just kind of depends upon if you're going to do two contracts. We'll just double-check. If we did the 870, is there less or more volume? There's less. So, maybe the investor says, you know, I want to stick to where we have more volume. Okay? Okay? On the stock trade, capture the gain. On the last vertical, which only lasted a week, capture the gain.
Now, remember, this is where investors would probably say, I had those positions, and now I'm looking for something else. You've got to understand something. Something that's in a trend might still be trending. Right? So, the mistake typically is I profit took, and there I'm now going to completely switch it off. Wait, is the trend over? It's not over. Okay? And so, we're going to go right back to it, and we're going to try to expose it again. Now, kind of like Nebraska's football game throwing against the number seven. Okay? Won't get into that. Okay. Now, here we go. If we look at the break-even, okay? Break-even and expiration, max profit, max loss. So, this is kind of more your one-to-one. Cost of the trade, just for time's sake, we'll do one contract.
No, we won't. Let's kind of maximize it while we're here, so it kind of, if it goes up or down, it's kind of more realistic. There it is. For the four contracts, max loss. We're trying to make sure all the trades are less than $1,000 max loss. There it is. Note the commission on top, though. Send the order. Okay? So, trades that we did here today was we re-added to the Netflix position. Number one. Number two. We also did add or took a new position on SMCI with really high implied volatility and NVIDIA. Okay? Now, the other one we actually did, the fourth trade we did, which is we rolled, which is a new position, on the SPX. Not a stock. It's just the index.
It's not bad to kind of get a little variation of type of products, and that's what we did here today. Now, I'm out of my time here today. Remember, if you have not subscribed to the Trader Talks channel on YouTube, do so. It's free. You can get all of our content right there. There's the link for that right in the middle of the page. You can see subscribe if you have not done so already. Please, everyone, extend James L. a thank you for being the contestant on 'Is the Option Potentially Right' here today as we talk about what says the fib on the Netflix. Thank you for that, James L. I had a little fun with you, buddy. Now, also remember that you can follow me and Connie on X.
Feel free to do so. We do post announcements there just like I did yesterday. Stay tuned for Barber coming up next. Remember, with what we discussed was done for example and illustrative purposes only. Remember, all investing involves risk, and make sure you practice a paper money account so you get a sense of what strategies might be of interest to you, or if at all. Okay? Now, remember, this has been the Class on Investing Master Series. And with that said, stay tuned for Barber coming up next. Thank you, Connie, and thanks to all of you. Bye-bye. Bye-bye.