Exiting Positions and New Positions | Using Options as a Stock Investor
Hello and welcome to Using Options as a Stock Investor. My name is James Boyd. Alongside me in the co-pilot chair is Connie Hill. So, the two redheads will be taking care of you today. That means you're in trouble and you're going to have a little fun here today. FYI, coming up October 1st, this class will no longer be called Using Options as a Stock Investor. We will call it the Investing Master Series. So as you learn different topics like getting started with fundamental analysis, technical analysis, getting started with options, we want to make sure that we actually have a class where we cover intermediate and advanced topics and we bring the disciplines from other webcasts to this webcast. So this webcast will talk about technicals, fundamentals, options, among other things, stocks of course.
So it will be changed on October 1st to the Investing Master Series where we bring all the topics together. Okay, so I'm kind of excited about that. So we'll actually kick that off on October 1st. Now just real quick as we get started here today, I want to give us some quick reminders that when we talk about options here today on some examples, remember that options carry a high level of risk, not suitable for all investors. This information is provided for general informational purposes only. This webcast discusses technical analysis. There's other approaches like fundamental analysis. So we talk about Wednesday at 4 p.m. Eastern. We will be using the Paid Money software application known as for educational purposes. That's also known as the desktop version, which is downloaded on Schwab.com.
And also remember that investing involves risk. Now also remember when we talk about kind of statistical returns, past performance does not guarantee future performance. And also as we talk about the agenda items, remember this class; we cover the same material. We're applying each week the strategies we talk about, like stock positions, covered calls, cash-secured puts, and a heavy dose of probably verticals, okay? Some alternative strategies we can talk about from time to time, absolutely, is callers and synthetics. Those are really the main strategies that we actually talk about here on this class. So let's kind of talk about markets real quick, sectors, and we'll talk about the two portfolios. We'll talk about some individual positions in the current portfolio, and then we're going to talk about some new positions, okay?
So first off, let me actually just bring up, if you don't mind, the list on indexes. And let me kind of guide our eyes here. So I have our index list, okay? And I want to kind of take a look at the SPX, NDX, RUT, and the DOW, okay? So when we look at these four that I highlighted, still trend three and trend three, okay? Fine. Do you notice anything that stands out on the RS5 through 63? Now, by the way, some of you might be, well, what is RS? RS is short for relative strength. Do you notice anything that stands out? One of the things that kind of stood out to me this morning as I kind of looked at that, we also see that the DOW on a five-day timeframe went from red to green.
That's something to note, okay? We also see that SEMI. Okay. Conductors may be having a little struggle here today, if you include the SOX, noted. Well, we also kind of see this has stood out, which should be pretty apparent over the last three different timeframes, is Mr. Russell, okay, is getting a little push on a percentage basis. We actually see Russell, small caps, getting a nice push here today, okay? So probably the biggest standout is DOW and Russell, okay? Now, you might be thinking, well, last week you talked about the SPX. How come you don't have anything to say to that? Well, I did. I posted on X that position that we did last week of the S&P, which was done last Thursday. I posted this on X as well, okay?
When I woke up at 4 o'clock in the morning, ding, okay? We got a little ding from the paper money account saying that one had sold. So I don't have anything to say on that as far as setting. I don't have anything to say on that as far as setting up a new position. When we talk about indexes or something that tracks the indexes, we'll do that on this Thursday again on futures. And also Friday, I will be with Kevin, okay? And I will be riding co-pilot chair with Kevin on that ETF class on Friday morning. Connie Hill also teaches an ETF class on Monday afternoon. Do not miss that, okay? So, on the S&P, that did hit the target. So let's kind of take a look at what these charts look like.
Let's start with the Russell. So when you take a look at the Russell, and we'll back this off for just a sec, we broke inside the old channel. Why is that of interest? Well, we talked about that probably weekly, okay? The path of least resistance. If you actually break up through the channel, which was the old support, the path of least resistance is you can go to the top of the channel. Just see Amazon if you want to see that among other stocks. So Russell kind of has a top now of 22.62. Smart bears are probably thinking, I'm not going to take a bearish position. If I'm going to take a bearish position, the bear would say, I'm going to do it at resistance.
So you kind of sometimes get one-way traffic if you're just bullish, bullish, bullish, bullish, and an absence of bears because they recognize a broke resistance and they're not at a resistance level to put on the bearish trade, okay? So the Russell being a little stronger. Now Dow Jones itself, pull that up. Okay, a brand new high here for the Dow. Larger caps. Larger caps. Let's stress this again. You do not need a special search to actually look at the Dow components. There's only 30 stocks in there. Do not feel like I'm going to look for some secret stocks that nobody knows about, okay? The stocks in the Dow, there's many of them that are doing phenomenal. Could that trend continue?
When you look at the SPX, what I will say is when you pull up, let's say the daily chart, it looks like as follows. That's a brand new high intraday. And then when you go back and look at this three-year weekly, what you're going to notice is kind of have that ascending triangle. Could you imagine if you were missing the market right now? Could you imagine if you had no capital to deploy? It would be the just sickest feeling ever, okay? Because you have opportunities, but you can't take advantage of those opportunities. Oh my gosh, capital is so important. So what you're going to notice when we take a look at the weekly chart of the S&P 500, some of them might say, it's too high, too high, too high, too high.
You could have said that same thing all the way up here, okay? And it kept going up, even though it was at a new high. Remember, a new high is confirmation of sentiment. A new high is a confirmation of an uptrend, okay? Is it sinking in? Okay, good. Now, when we talk about sectors, sometimes when we see the market go up, yeah, but the market's only going up because if one sector is really leading it, that's it. If it wasn't for that one sector, you know, the market would be crashing down. Well, we can't say that, okay? When we take a look at the participation, and we just talk about just kind of one-month returns, real estate, 7%, brand-new high, okay, in the last 24 hours. Utilities, up 6.5%.
Eva, you like that? 6.5% in the month. You got discretionary's that hit a brand-new high. For the month, 6%. Staples, 4.5%. Financials, 4.3%, and so on. I wanted to say, we cannot say, don't say it. Do not say it. If you say this market is just, it's only one sector like tech, we would be completely wrong, okay? So let me kind of show you what these look like and why this is kind of fun. Okay, when you take a look at, let's say, discretionaries, big swing back to the upside. I tweeted about this this morning. And that's a big high or low right into the old high. Could that be a continuation pattern? We're going to talk about that area quite a bit here today.
When you look at, let's say, technology, the IXT, okay, kind of more sideways. It's not the standout. But when you look at, let's say, industrials, doink, as Bill would say, that's a brand-new high, okay? When you look at, let's say, the basic materials, ladies and gentlemen, boys and girls, that's almost a brand-new high. That's getting above the 982 mark again. And you look at, let's say, financials, that's a nice little crossover. Oh, my gosh, look at that. Could it go higher? Talked about that yesterday. Utilities, doink, brand-new high. Staples, excuse me, real estate made the high yesterday. And you look at Staples, okay, IXR, that was a brand-new high yesterday. And what about the healthcare, okay? I left that off, okay? I don't want to.
You know, some of you are going to think we're not talking about healthcare. Not a brand-new high, near the high, little down here today so far, but did get a crossover. Now, when you get wider market breadth of participation of other sectors, for some, they might say that's a better confirmation of just general strength versus isolation into one or two sectors. Are there any questions here? Yeah, saw the game, Eva. We went to Logan, watched Utah State, Utah. It was actually a good game, okay? I was expecting a massacre. It turned out to be a good game, Eva. Okay, good. Now, what I want to do, so we talked about the indexes. The standout would be the Dow, and the second would be the Russell, okay? The third of that would be the S&P.
My examples here today might be a shocker. We're going to look at some of the NASDAQ stocks that are going to be in the discretionary sector, okay? That's where we're going to heavily focus, okay? Now, what I want to do is kind of just bring up kind of where are we stat-wise, and then kind of go to work here, okay? So here's the deal. You can talk about investing all you want. All we care about is look at the scoreboard, okay? So we're looking at the portfolio balance. I'm going to kind of write M for margin, okay? That margin account was on November 15th, okay? So 11-15 of 23 was sitting at 45,000, okay? Today, oh, I might have to speak to it because it might do this.
Okay, we'll see if it does it again. Now, we're at 67,500, okay? So when we look at the percentage since November 15th of last year, we're sitting at 50% in 10 months. Now, you compare that to the S&P. If you were fully invested in the S&P, you're at 23%. That means you're fully invested. That's the only way you got 26. You had to be 100% invested, buy and hold, okay? So far, we have 50%. We're not fully invested. Probably you're invested probably 60%, 70% on average, okay? 30%, 40% cash. Right now, we're even higher cash than we've been in a long time. We need to address that. I talked about that yesterday. The IRA account started with a higher level at $185K. I'll just put $185. We're sitting at $247 and a half.
And that account is sitting here at $33.78. Sorry for doing that. I'm writing with a mouse. $33.78. Now, again, we're comparing that to the benchmark, okay? So when you look at those, we're trying to get both of those accounts to outperform the S&P of 23.6. We use the S&P because, well, we're investing in all sectors, okay? And we're doing all stock positions. Now, what I need to do just real quick is let's kind of address. Now, by the way, one of the questions might be, 'When are you going to reset the portfolio?' If you don't mind, I'm going to kind of let this and that'll be the last time I touch this. I'm going to reset this at the end of the year.
So we know it's going to be about a little over 13 months when we reset it coming up, okay? So that way, we're going to start from January, January 2nd of '23, 25, excuse me, and be a normal. We did that on November because, well, that's when we kicked off the Trader Talks, okay? Or near there, okay? So now what I want to do is I want to go back to a couple positions, okay? So I want to now yesterday we spent some time talking about the margin account and we managed a number of those positions. The only thing I want to say here is ART is continually right with crude oil, that's all I want to say. And ART, you better be here, I'm joking with you, okay?
Now, one of the ones we kind of said that we're going to hold on to is Meta. We're getting a little help here, okay? Meta's getting a little bounce with three days remaining, okay? Now, if I made the comment such as, James, I do not want to be in a situation where this stock gives us back, I'd rather take $190 less commission, stuff it in my pocket, and not have to risk going all the way to expiration. I feel you. And what I'm going to do is on that comment with this little push that we've had, by the way, it was up even higher today, okay? Look at this morning, right click on that. We're going to create closing orders. We're going to shut that down.
Now, that's not to say that we're not going to go back in, but we're just going to go back in on a different expiration because there's only three days remaining. We're looking at Meta. We're closing the long call vertical. And we're going to confirm and send. Note the commission. Going to try to grab the $190, okay, which is sitting right there. The other one that we're getting a little help on from yesterday is a little Goldman Sachs that was down worse, coming up a little bit more, helping that long call vertical. Nothing else to say on that. What I do want to talk about is the account that we did not talk about yesterday. Now, remember, in this account, so you can follow along, we have stocks.
We have short puts, covered calls, short verticals, long verticals, and so on. Now, I want to kind of focus on this one for just a second. What do we see right here on Procter & Gamble? Anything? Now, this might be a little confusing when you see this. We sold the $170, and we bought the $150. Now, that's your classic short call. It's a short put vertical, but the strikes are so wide. So what is that? Why do we do that? Why do we do that in the IRA account? Well, we do that in the IRA account because, well, we want to make it where we're not tying up as much capital. And we're able to do that by buying a put below us, which costs something, OK, $0.36 plus a commission.
But it also makes it where the risk is not down to zero. So it's a dual purpose, OK? If this makes money, that's not a good sign, OK? We want this one to make money. This is a short put. The put value loses if the stock goes up. So, the goal of the short put is, we talked about this last week, right, to sell high and then buy back low, OK? So we sold it for $375. It's now at $9.75. And what we're going to try to do is take that $365 and stuff it in our pocket. Now, if you don't mind, I'll just go ahead and do that now. Now, here's the deal. Do we need to sell this? Not necessarily. What's the risk if we keep it on?
Well, the risk is if you keep it on, if the stock closes below $150, the investor becomes short the shares of the stock. So that's the risk. So you need to watch that. If we don't close it down, that's the risk, OK? Now, what we're going to do, we're going to right-click on this. We're going to create closing order. And we're going to profit take that $365 and say, 'Thank you very much', OK? Now, let's bring it back up. Let's close it. Confirm send. Note the commission to exit. Send the order. Now, the most we can make in the next three days is $11, OK? That's the most we can make. We're saying, 'I want to get out and try to get a bigger premium and restart it potentially over again', OK?
Now, the other one that we need to actually speak to just real quick is you're going to see ITM, in the money. Let's pull it up and see what we got. What you're now going to notice is we see on this, there's that short put, just like we saw before, OK? And there's that downside protection, OK? Now, remember what we said before. If that long put becomes worth something, that means the stock has gone down and/or volatility has gone up quite a bit. So we don't really care about that one per se. We're not trying to make money on that one. We're trying to make money on this one, OK? Now, we already have shares of SPG in the account. We already have shares already. We're not trying to buy more shares.
Hey, James, but I've only made 40%. I'm sorry, OK? I'm just sorry from the bottom of my heart. Not every trade is going to be 80%, 90%, 100%, OK? So we would rather take a 40% and then we're going to have a 50% and then we're going to have a 50%. So we would rather take a 40% and then we're going to have a 50% and then we're going to have a 50% gain. Right click on that line, create closing order. We're going to buy it back. Why are we going to buy it back? Because we sold it to begin with, OK? And now what we're going to see, now, by the way, that mid price is 145. Add the commission. Add, OK, there it is.
Send the order. Now, the other position that we need to deal with is which one? What's the other position we need to deal with? By the way, the reason why I'm doing this is I could sit here and tell you about pretty much any strategy you want to know. That's not the massive key to success. What do you do with the positions? That's what we spent yesterday talking about and right now. I'm trying to involve you in the process. If that wasn't the case, I could just manage these myself and move on and just teach you strategies, which I'm going to do in just a sec. But we need to deal with these, OK? Now, what we have now is we have a 155 call.
So if that stock, which is at $165.25, expires in the money, that long call can turn into another 100 shares of stock given one call contract. OK, now, if we already have shares of stock, I'm not going to try to add to it. So I'm not really that interested in holding this to earnings. The stock closed above the strike price. The broker is going to exercise that call. And now we own not 100 shares of stock, but now 200 shares of stock. So if we want to stop that from happening, what do we do? Right click, create closing order, sell the contract. That contract is up $400, about 60%. Bought it for $650. It's at $1050, OK? Now, if you said, 'you know what', James?
I was actually thinking I have the right to buy the shares through that call. I want to exercise that right. How do you do it? Well, when in doubt, right click. What you're now going to notice is, if we exercise, what does that mean? We're going from the long call, which is the right to buy the shares. We're saying, yes, we want to exercise that right to buy the shares, exercise. Who controls that? You do. We're going to click on exercise, and what does it do? It says, hey, we're going to get rid of the call that we have now, take that profit, and then also step two, buy the shares of the stock. So that's not really that bad. Right? But we're not going to do that.
But if someone said, I want those shares, I think the stock could go higher, that's all you have to do, OK? We're going to right-click on this, create closing order, take the $400, thank you very much, confirm and send. Notice we're going to move it to the mid-price to try to get filled, confirm send, send the order, OK? Now, I'm going to just kind of speak to these just real quick. I don't have a whole lot to say here, because I want to get to other examples. But when you look at CRM. OK? CRM, if we took a look at that, which has three days remaining, 85%, about $200. Dash, three days left, 93%, about $200. And then you look at Nvidia, three days left, $97. It's about $631.
We're going to grab that $1,000 and say, thank you very much. And then I'm going to come back to the other ones on the bottom after we do our trades, OK? So all I'm going to do here is right-click on this, create closing order, shut it down, OK? Confirm send, note the commission, send. Going to go back. Now, by the way, if we do this, we're really not thinking. We could look at the chart and say, do you want to roll the position? That could be an option, sure. I'm not going to do that right now, because I have some other ones that I want to talk about, OK? When I look at Nvidia, that is going to be one that we actually bring up here today. OK? OK. OK.
So the bottom kind of looks like what we talked about before, the 107 put, and then a put strike. It's $27 below. Why is this gain so much bigger than the other verticals? Well, because this is really more of a cash-secured put. So what I'm going to do on that is I'm just going to buy the 107 put back. Understand that risk there. You keep the 80 there. We talked about that. We're going to right-click on that, create closing order. We're going to buy it back. So the goal. when you sell those puts sell high buy back low that's the goal and we're going to try to take that 744 stuff in the pocket
spank you very much create closing order buy it back there's the mid price confirm send add the commission to get out send the order okay now what we did in the last two classes is we pretty much cleaned out these portfolios okay there's a couple others such as netflix what we need to address ibm that we already addressed yesterday so i'm just going to close that already talked about the s yes that yesterday i'm going to close that one out we could have done that and that was my bad for not doing that yesterday okay ibm we took profits on that call yesterday okay and there's ibm for uh done and you're going to see there's amazon so amazon and netflix are the only ones left just so you can kind of see this amazon we could just profit take just since we're here we'll clean them out and if i did That the only thing that we leave note, the commission, the only thing we really leave is Netflix.
Okay, now that's kind of an interesting discussion. Let's start here. Okay, now this has three days remaining, we have a 700-10 and we're right now at 70282, okay, so we're barely at break even, barely, and we're not even at break even, we're slightly below. Okay, now what I want to do is let's bring up a couple new positions. Now as an end listener, what I'm trying to do is involve you in the kind of a the analysis of the market and sectors. I'm trying to have you see we go through the analysis of the market and sectors. I'm trying to have you see we go through the analysis of the market and sectors over
week where these portfolios have been i'm trying to involve you in picking the stocks and the strategies and the management of the positions okay so it kind of becomes more like a hands-on versus you're watching from who knows where okay and saying i don't understand okay now what i'm going to do is i'm going to bring up if you don't mind a couple of the stocks so if i brought up example given okay if i bring up a couple of the stocks and i'm going to bring up a couple of the stocks and i'm going to bring up let's say the nasdaq okay and it probably wouldn't be very hard to see it
But if I brought up, let's say the NASDAQ, okay, a couple stocks that kind of are near the top of the list and let me kind of do it like this if I do uh go to the NASDAQ some of the stocks that have kind of been at the top of the list here today has been there's Netflix which we're going to come to and there's another one that I want to talk about here today which is Tesla, okay. All right, so let's go ahead and bring up a couple of the stocks that kind of are near the top of the list here today. Let's kind of talk about Netflix first, okay. Now if we looked at let's say Netflix now this is where we're going to kind of speed it up a little bit, okay because I probably have about five that we want to get in now.
Why are you doing more than normal? We don't have any positions if the market goes up and we're sitting in a bunch of cash that cash has a return at least for us of zero, so we're trying to add some positions on if the market goes up. Could we benefit from that rise? We're trying to pick some stocks that might outperform the benchmark of the S&P 500. Now if we look to let's say resistance on Netflix and said where do you see resistance? We might say things like uh, 698-ish is that kind of resistance area. So number one that we're going to do is we notice that we have the long call vertical already. With three days remaining, but what we're going to do is we're going to go out far in time to October and what I'm going to do is on that position type in Netflix.
Okay, long call vertical now why are we doing a long call vertical? We are doing a long call vertical because we want it to be more about profitability than probability. Okay, now what I'm going to do is: I now notice when you do a higher price dollar stock spreads can be wider. Noted, we're going to sell 700 again which is the at-the-money strike and we're going to sell the seven tens. Okay, now notice you're going to see our positions right there. Okay, we're just going to go out. In time now for the next three days, Netflix gets a bounce that could really help our position that we're in, that's why we're trying to keep it on because we are bullish in the short term.
In this example number two, we're going to take the exact same strikes seven hundred and seventy ten there's the debit, let's just say five bucks. If we have a right to buy those shares at the 700, we pay five dollars for it gives us a break even at 705. All we gotta do is just do basic math 700 you have a right to buy the net of that is five bucks, break even 705, so the next 31 days the stock just needs to go up like three whopping dollars, anything about that. Dollars above break even at seven hundred fifty billion. Now here's the next one. Now let's bring this update all right, we go to big business again; we're by right, the option is that people actually decide as soon as they invest they pay $200.
If I come into that position, you let that cut contract get me $100. Correct again, I'm just mine if you're an analyst there was nothing earlier here at a hundred facts bit, I'm a win now. Here's again all right, almost all okay, so expenses; I'm reying in the stock is in these low-high buy price $1.30. What we're going to do is we're going to do - I'm going to do it in both accounts. So notice when we go to single accounts, we're going to go multiple accounts. We're going to do one in the margin. We're going to pump or put in two in the IRA. Okay. Send, send. Now I do not subscribe to this. Oh, in this one account, I do this. In this account, I do this.
To me, if it's good for one, why is it not good for the other? Now, the only reason why that might be true is like, hey, I got a lower, I got a lower balance account. I can't buy a whole lot of shares. Okay, fine. But the stocks themselves, the quality of the stocks, to me, it's like, if it's good for one, why wouldn't it be good for the other? Why is someone maybe considering buying stocks that are maybe potentially shady, where they don't make any money? I mean, you could do that, but you might question why are you really doing that? Okay. You know why you're doing that if you're doing that? Okay. Now, what I'm going to do is I want to also go over to, I want to speak to First Solar for just a second.
Okay. Now, tell me what you see on First Solar. Okay. Now, First Solar, we've kind of had our eyes on it a little bit. And what you're now going to notice is we kind of talked about this when it had a pretty big pop. You're going to see we kind of had a line of resistance, probably right around 231. And what you're going to notice is kind of some upper area, let's say 240. Those are probably the lines of resistance. Okay. Now, you could say on the right hand side, okay, this big run to the upside, and then a little pullback. Okay. Now, that pullback lasted one day, two days. What's the point I'm getting at? Well, if you pull back less than three days to only to see those candles go green again, that is probably telling you there's momentum.
Mo, mo. Okay. That is also probably telling you that there's a little bull flag forming. $239 stock. And if we go back to this and say, what is the implied volatility like? Well, if we go look on the right, go to the trade tab, go look on the right-hand side, front week, 72. We go down to the bottom, we go down to the bottom, we go down to the top. We go down to the bottom, we go down to the top and we go down to the bottom. So the October 56. Well, who cares? Well, what the implied volatility is might kind of influence whether you want to be a buyer or a seller. Okay. Now, if we want to kind of see the range of where it's been for the year, we're going to see that, well, 71 was the high, 52 week low was 37.
We are at the 51st percentile. So we're in the middle of that. That. Now, what we're going to do in this example, if we said, you know, James, I'm pretty bullish on this, and I think it could stay up above X price. Well, where do you think that X is? Where do you think that support level is? So if I said, you know, James, I'm pretty bullish that I think it could stay above 220-ish, there it is. If we decided that we were going to sell the 220, 220, we get a 580, 595 bid, 635 ask. God, that spread tightening as we're talking about it, okay? I always feel like someone's looking behind me. Quarter now, okay? Now, what we're going to do is we're going to go in the IRA account, okay?
And what we're going to do is another example. Now, sometimes when people listen to me, they're like, 'You need to understand,' I show a not just one example, two examples. I'm going to show you 20, okay? So in other words, if you watch me do this, this won't, I guarantee you ain't going to be the last time, okay? We're going to right-click on that bid, right-click, sell vertical. Now, what do we do? Tell me what I'm doing. What am I getting at? Well, we're selling the 220, and why are we selling the 220? Well, I wonder if I said I wanted to sell the 220. Well, in that case, I'm going to sell the 220. Well, in that case, I'm trying to be a little bit more high probability base, which does eat into the premium, noted.
If you said, James, I'm more bullish than you are, I think it could stay above the 230, and I wouldn't even mind those shares at 230. You might sell that 230 strike, which has a 35 delta, okay? Now, if you take a look at this, we're trying to buy a put on the downside with typically less than a delta of 10. You want to check the liquidity on these, and even if we chose one that maybe is like the 190, what is that going to do, okay? Well, when we pay a dollar and change for it, it's going to eat away at some of the initial credit that we got, check, okay? But also, it adds one other component.
It adds another 65 cents of commission, but what you're now going to see is how much money do we need to set aside for this position? Answer, $2,500. Now, that $2,500 is set aside because that's the max loss given this short, wide vertical. You could really take away and say, this is really a short put or cash-secured put with just downside protection. That's it. If we didn't buy the 190, we would need to set aside $20,000. Now, Kola actually says, what about the volume? Now, the volume, so we're talking about stock volume, $607,000 on the stock. When we look at the option volume on this, given these different contracts, this is the volume so far today. So, in the first two hours, that's the volume today.
And if we said, well, what's the open interest like, okay? It is in the hundreds. So when you look at the volume, you kind of have to kind of think about, geez, what time of the day is it? If we're five minutes into the market, and 80 contracts are bought or sold, okay, it's not netted off. So if Kola buys 10, and let's say EVA sells 30, they're not netted off. You add those two together, and it's just, the volume is showing kind of like the level of activity and quantity, bought or sold, okay? Now, what I'm going to do is going to go, so I don't have anything to say besides what I just said. There you go. Confirm send, note the commission, send. Now, why are you selling that in the margin account?
It's too big, okay? If we were assigned on that, okay, to buy the shares at the strike price, that would take about 35% of the account value, okay? Now, so trade number, this one we just did, was kind of more of your cash secured put on first solar, thinking, could this be a little reversal to the upside here, okay? Now, let's go back and verify that. Number two, we also did the example of Tesla, okay? Let me actually go back and just verify that. No, sorry, Netflix, okay? Tesla is what I want to get to, so let me check that. We did Netflix, and then we did First Solar, okay? Now, I want to kind of speak to something just real quick, a question that was asked, okay?
So one of the questions that was asked, okay? So by the way, if you haven't subscribed to the Trader Talk channel, it's easy, this thing to do. Prove it to me that you can do it, okay? Now, go to YouTube, just type in Trader Talks by Schwab Coaching, okay? Let me send you this page. Right in the middle of the blasted page, it will say subscribe. It's free. You don't have to pay for it, okay? Now, this class has a playlist. So if you said, where could I go back and see other classes that you taught, right even on my mobile device if I wanted to just watch it? Watch it on my phone, right here, okay? Now, the other thing I want to kind of get to is a question that was asked, okay, about kind of applying a script.
So you guys and gals know that I occasionally post on X, occasionally. That's kind of a joke, okay? But let me kind of show you some of the things I post that are educational in nature. So if you said, James, where could I get any of those scripts that you share of how to scan or filter stock? They're right at the very top. I'm going to show you how to do one, okay? Now, the other thing is, we talked about the scan last week. Remember that if you are on a mobile device, and you bring up a personal watch list, those scans are also going to be on your mobile device, okay? Right there. And so if I clicked on pull back to a 20-day moving average, that list comes right here, and all I got to do is click, click, click, and this chart is going to change.
Hallelujah. Use technology, okay? Now, for you Samsung users out there, please tell me that you can do that. I'm joking with you. I got some fierce comments yesterday. I love that. That was fun. I had a lot of fun. Now, if we also take a look at kind of some other things, you're going to see, we talked about the discretionary sector. We also talked about, for example, there's Netflix longer-term chart. We also brought up FedEx. You're going to see that we talked about meta there on a long-term chart as well, kind of talking about some inter-day price action, Tesla, and so on. So what you're going to see is I try to post pretty frequently, and also what you're going to notice is Microsoft, Amazon, and these are ones that I just hit this morning.
Even talked about this morning how you saw the S&P hit the target overnight. I'm showing you that because a lot of people say, well, they follow me on X, and what does that mean? Do you post? How frequent? What do you post on? So I'm trying to give you a little taste of what I post about, and I also post announcements there. Now, how do you actually put, for example, one of these scripts on? So if you said to me, hey, James, I want to find cold, for example, given, okay? There's cold, okay? And it says that this goes on the market watch tab, okay? I need to take that right there in blue, that code, and if you don't mind, I'm going to move it over here to the right, okay?
So when I do that, now what you're going to see is I pull that back up. I'm going to put that, we're going to go to the very top right of the platform, okay? Go to setup, open shared item. Now, if I open shared item, all I'm doing is I'm just kind of typing in, there's cold. I'm going to type it in. It is case sensitive. So watch what we're going to do, and in 60 seconds, we're going to be done. So now when I do that, and I'm just typing right screen here, there, J8, okay? Now, if I typed it in correct, if I typed it in correct, it will give me an opportunity to actually type in, import the item as whatever, okay?
I am going to use this, I'm just going to call this an example, okay? Script. If this was you, you would be calling it cold, okay? Now, import that now, okay? Now, when you do that, go to the Market Watch, watch. It's a market watch script, market watch. We'll go to quotes, and what you're now going to notice is anywhere on these column headings, anywhere, okay? You could just bring up, click anywhere on these column headings right here, right click anywhere, just go to customize, okay? That's the whole trick. If you right click on that heading, go to customize, and what did we call it? Right click on the heading. Okay, customize, and we called it example script. All I got to do is remember what I got, what did I call it?
Example script, there it is, and then just add that, and if I add that, it's going to go down at the bottom of the list, and it's going to be right there. Speaking of that, let's look at our next example, okay? So, hopefully that helps. Someone said, hey, could you show that? Okay, there you go, okay? Now, speaking of cold. Now, one of those stocks that I want to kind of, for example, look at here, I want to go back to Tesla. Now, Tesla is not in the Dow Jones. We know it's in the NASDAQ, and if I pull up, let's say, Tesla itself, whoop, there you go. You're now going to kind of see that if we looked at Tesla, we're kind of like in between, okay?
Now, what you're now going to notice is if you look at this, we have an upcoming earnings, and you're going to notice that when we gapped down, that was a low, that was a high. When we went up to this high, the last time, there was a huge red candle to the downside, and then we shot back up again, and we soaked up all that huge, large red candle. Now, if someone is kind of getting in now, what are they really thinking? They're thinking that maybe some investors might be speculating. They're thinking that maybe some investors are going to be speculating, and they're speculating that we might be breaking out to the upside. Now, they don't know that for sure, okay?
But if they do that, they put on a bullish trade now, they're thinking that probably 233 won't hold, and maybe could we go to maybe like the next level of resistance, okay? Maybe 250. Now, I wonder if you're not completely sure. Well, this is where we're probably saying, I'm probably going to want a little, kind of give it some room, just in case if it doesn't, maybe it's not as bullish as I thought. What we're going to do is we're going to go back to that trade tab, okay? Now, what we're going to do is we're going to put this in both accounts, given a short put vertical. Now, if we decided, 'Hey, I want to sell a strike,' which has a delta between 30 to 40, there's three options there, okay?
When we look at the volume so far on Tesla, more active than for solar. When we actually take a look at this, we're going to sell the 220, and what we're going to do, so we can kind of stay within the parameters of maximum loss, we're going to buy the 215. Now, technically, what I'm kind of thinking in the back of my mind is, how much of a loss could the margin take? About $600 max. So, if we got in this, and we said, 'Hey, if we're right,' and the stock stays above both strikes at expiration, 100%. $190. If we're wrong, given that one contract, $310. So, I'm going to do one contract in the margin, okay, reestablishing some positions. If I had two or three accounts, where do I see those?
Single account, multiple accounts. We're going to do one in the margin, and I'm going to pump probably about, yeah, probably about that, four contracts. So, I'm going to do one in the margin, and I'm going to pump probably about that, four contracts. Given the vertical, okay? So, there it is. So, today, we did first solar. We did also Netflix. We did Tesla. I want you to keep an eye on Meta. I also want you to keep an eye on some of those discretionary names as well, such as Amazon, okay, which hit the top of the channel and we're questioning, could it go higher? And we've got to remember, tomorrow, we have the Fed Day, okay? Note that. Pretty much have an idea of what they're probably going to say.
It's been well telegraphed by them, okay? And so, remember, in these two portfolios, we're trying to rebuild positions because we're sitting in a pretty big pile of cash right now, okay? The IRA sitting in a pretty big pile of cash. That's why we've been spending some time on reestablishing some positions. Now, by the way, I want to say this to the Lisa Jack: If Lisa Jack goes from one Fed Day to another, she's going to go from Samsung to Apple. Someone please call it quits on Apple. Lisa, hopefully you're laughing right now. Now, here's the deal, okay? So, I'm out of my time. Remember, with what we discussed, you can actually go back on a playlist and see that. Subscribe to the Trader Talks. Grab actually that playlist.
I'll send it out again, and now what you're going to see is our goal here today was to really kind of talk about the portfolios. Managing those, establishing new positions, and involving you in that process week over week, okay? Now, remember, coming up next, Barbara Armstrong will be doing a class on getting started with options. Thank you so much for your comments and your participation, and also remember that we talked about this; these examples were just that. Stay tuned for Barbara coming up next. Thank you for attending this class on using options as a stock investor. Thank you so much. Again, take care. Bye-bye.
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Click here to be able to watch episodes live on YouTube to ask a question, post a comment, and explore more episodes in the Using Options as a Stock Investor series.
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Options carry a high level of risk and are not suitable for all investors. Certain requirements must be met to trade options through Schwab. Please read the Options Disclosure Document titled "Characteristics and Risks of Standardized Options" before considering any option transaction. Characteristics and Risks of Standardized Options. https://bit.ly/2v9tH6D
Scripts are for educational purposes only, are not a recommendation, and are not guaranteed for time or accuracy.