Good afternoon. Good afternoon. Thanks for joining us for this session. I'm Paul Judge. This is David Maynard. What we want to spend some time on today is search malware. Share with you some of the results that we've seen. We've probably the last several months have been looking into this issue. Certainly over the last year there's been many examples of malware poisoning popular search terms. I think we've all seen examples over the last year. So what our goal was to do was to really kind of understand how much this is happening, understand where it's happening, understand a little bit more about how it's happening. And so as we dug into this, one of the things that was pretty obvious here is kind of why the attackers are focused on the search engines. I mean, the number of eyeballs that are showing up on search engines every day is growing rapidly. I mean, if you look at the latest numbers from the search engines, you look at Microsoft, look at Yahoo, even Twitter now and Google. There are hundreds of millions of searches done on each one of these every day. Microsoft totals in at over four billion searches a day. Yahoo at over nine billion a day. Twitter now is claiming over 24 billion. Excuse me, a month, I said a day, but a month. And Google, of course, leaves with over 80 billion searches a month. So the point is, as more information and more users come online, we all use search engines more and more. I know I've personally kind of come to the point that I'm so lazy that even if I know I'm going to a site like CNN, instead of just typing CNN.com, I don't have time to type the extra four characters, so I just put it in my search toolbar and let it do the work. I see a lot of heads nodding, so a lot of people have kind of developed that habit. So the point is, there's so many people going to search engines every day, and the attackers realize today is a pretty good place to focus to get in front of eyeballs. And so what we wanted to do was understand kind of how they're targeting particular terms, how much they're targeting particular terms, are the particular categories that are more popular and so forth. So with that, we set up a system, a methodology that crawls to different search engines. And it actually, around the clock, pulled and looked at what were the most popular search terms? For Yahoo, for Bing, for Twitter, and for Google. And it looked at those most popular trendy search terms around the clock and looked at what were the search results for those. And so we pulled those search results and then actually pulled the pages that those were pointing to and analyzed them. So if you look at what we looked at, it was four different search engines over about two months, 57 days to be precise. In that time frame, there were 25,000 popular topics that we examined. And then over 5 million actual search results. So what we dig into is what we found. So one of the first points is we found malware. Anybody surprised by that? Over 8,000 examples of malware across the different engines. If you look at the breakdown, the leader is Google, with 69% of the malware that we found being found on results from the Google search engine. After that was Yahoo, with 18%, Bing with 12%. This was one of the first times in life Microsoft actually has this advantage of having a little market share. So kind of been the least attacked platform. The other one that you see on there is Twitter, with 1%. And at first it was a little strange to us because we were pretty familiar with how much malicious activity and misuse was happening on Twitter. But one of the things we understood as we dug into this is what happens is with Twitter, think about how a search engine works. It actually organizes and ranks results. So it makes it pretty easy for an attacker to use search engine optimization to actually make sure they're in that set of results that a user gets. Whereas with Twitter, for most of the time, the way their searches work, they just give you a snapshot of who's talking about this right now. So there's not that ranking, there's not that prioritization. And so for an attacker to try to poison a search engine, they're able to make sure they get their attacks in the top. For Twitter, they're more so kind of playing the odds and seeing where they end up in that random stream. And so this is what explains this only 1% number. But as we get further along, we're going to show some examples of specifically the types of things that are happening inside of Twitter. So if you look at the daily activity for each of the engines, you saw every day Google led the pack. Different days, different engines had a little bit more or less. But what becomes interesting is pretty much every day each engine led to something malicious. No engine really took a day off. But if you look at the different days of the week, one of the first things that we wanted to look at was if you look across the week, are there particular days that have more activity? The short answer is no, not really. Tuesday led about a little bit, represented about 16.7% of the overall malware for the week. But there wasn't a strong correlation about the day of the week. But what was a little interesting is if you look at the time of the day. So these time periods are based on an eastern standard time. But if you look at the 11 p.m. to 5 a.m. blink, really over 50% of the malware was found in this cycle. Usually, Dave's points out kind of the things that are happening at this time of the night, or what's happening at that time of the day if you're in Europe. But the next thing that we looked at, we're seeing that between the 11 to 5 a.m. slot, over 50% of the malware was showing up. So if you think about this engine running around the clock, pulling the popular search terms, pulling the results, and then analyzing those, we had over 50% activity in that six-hour block that was the end of the night. Another question that we looked to answer was were these known attacks? Or were these attacks that were new? Kind of what types of attacks are malware that are using on the other end of search poisoning? So this looks at kind of the over time, the amount of malware that was detected each day that was kind of found on the previous day, but wasn't detected to later. So let's take a break for a moment. How many people are here because they couldn't get to the Barnaby Jack talk? Raise your hands.  So it's funny, let's go back a second. The malware captured by time, so everything in my world is acclimated by Eastern Standard Time, which is the best time zone. However, we take a look at the breakdown in time, and no one on the East Coast is working between 11 and 5 unless you're asking if you want fries with that. So if you take a look and correlate this, who is working generally are people in Eastern Europe or in Asia somewhere. That kind of fits into a weird kind of hacker time, but you also have to invert the time that people, you would think that normal people work and make that a hacker time.  And the days that seemed to have the most malware were the days that seem to correlate to the biggest, like, pop culture events, like the MTV Music Awards and, you know, things like that. And this kind of represented the charts. So we started this research, and research ran for 57 days. And that's a number we picked that we felt would be a good indication of, you know, total traffic. So it ran for 57 days from, you know, April to June. And there were a lot of kind of pop culture stuff that happened in there. As you see towards the end of the graph, you know, that's World Cup malware and stuff like that. At the beginning it's more, you know, Justin Bieber malware. So, and if anybody thinks that kid's not evil, this is the second topic we've given this week, and he's a primary reason why people's machines get infected. So if you have kids and they buy Justin Bieber CDs, tell them they're going to get viruses. So if you look at this kind of one of the points of this particular point is that, you know, 98% of the malware that we found on the other end of these search results was identifiable by the techniques that we used. So, you know, one of the things to understand is you look at the results that we pulled and the ways that we analyzed them. So we used three different methods. One was a traditional category-based URL filtering database. So kind of looking at the URL and seeing what category of site is this, right? So everybody kind of understands the limitations there. A second source that we used was Google's safe browse lookups, okay? So everyone kind of understands the safe browse lookup. The third type of analysis that we used was a malicious JavaScript detector. And so what this does is actually kind of pull the JavaScript that's sitting on the page and look for behavior that indicates kind of unwanted activity, looking for, you know, too many create elements, looking for code that's being revowed within the browser and so forth. So those are kind of really the three detection techniques that we used to flag the different malware. And the point here is 98% of the malware that were on the other side of these search results were detectable, right? So kind of the good news is there is that attackers aren't using kind of true, say, zero-day on the other end of search results. 98% of the stuff is detectable if someone was actually using something in between them. So basically, as David said, kind of pointed out, looking at the low-hanging fruit. So we'll look at some examples in a second. You know, one of the other interesting things that we came across in this is really looking at the relationship between the different search engines. If you look at something that pops up on Twitter versus something that pops up on Google or Bing or Yahoo, kind of what's the difference in timing or delay on the time that it shows up on Twitter and the times it shows up on different search engines. And so this takes a look at this. This looks at the top 10 trendy topics on Twitter and looks at how long it took them to show up on a different search engine. And so the green bar here is the number of days on Yahoo, the red bar is on Bing, the blue bar is on Google. If there's no bar, it didn't show up. Exactly. So if there's no bar, it didn't show up on the other search engines. And so what you see is this delay. And so what happened is on average, it took 1.2 days for something to become a trendy topic on Google after it became a trendy topic on Twitter. It took about a little over 4 days, 4.3 days to become a trendy topic on Bing and 4.8 days on Yahoo. And so what's interesting, this was now the set of things that were trendy topics on Twitter. Now there were things that were trendy topics on the search engines that were not on Twitter. And so what we saw in general was like things that were kind of culture related or are pop related became trendy topics on Twitter first. And things that were like more serious news, like the all spill or election results, those things became trendy topics on the search engine before they became topics on Twitter. And kind of the one of the points in understanding this is from an attacker's viewpoint, kind of where should you target your attacks first? If you see kind of the timing of when things move from one network to another and they're going to become popular and going to become things that people are searching for, this gives a pretty interesting roadmap for where you should spend your attention early on in a particular event that's happening. So when you go home, make sure you tell your kids that if they search for news sites, they'll less likely get malware than if they search for Justin Bieber. We really don't like that kid, I've got to be honest. So here's a view of kind of all the trending topics that we looked at, over the 25,000 trending topics, what types of sites were trending? So what are the categories? And so one of the top things here is news. So 26% of the sites that were trending were news sites. After that was entertainment. So 23% of the sites were entertainment. And then after that, things pointed to news groups and to trending media and so forth. So big surprises here. People like news and people like entertainment. Right now, if you take a look at the top categories for malware, it's a little different. One of the things you see here is the top site is category spyware. So 35% of the sites that were pointed to were classified by traditional URL filtering engine as being bad sites. So these were sites that were known to continually to carry malware over time. So that's kind of the good news we're able to capture a third of this just with well filtering technology. But then you see entertainment here. You see search engines here. You don't see news pretty high up in the results. So one thing we want to look at were the particular categories that malware liked or didn't like. So what we saw is these are the top ten categories overall. So news bin one, entertainment, then forum and news groups. If you look at the third column, that's the ranking for malware. So news. It was the number one site overall for trending topics. It was number 17 for malware. If you look at streaming media, when I was number four overall, it was 21 for malware. It was sports similarly. Number six overall, but 14 for malware. So this shows examples of the types of sites that malware doesn't necessarily, authors don't necessarily particularly like to target. But then if you look at categories that are popular, you see some names that you would expect. You see kind of overall the malware ranking for hosting sites is number five, where in general is 20. You look at peer-to-peer. It's number six for malware, but number 46 overall. So you see some of the usual suspects. Hosting peer-to-peer and proxy sites being targeted by the search terms where they're leading to. Kind of from there, I want to transition a little bit over to some more specific, like looking at the domains and looking at some actual examples of malware that we saw on the other side of these links. Want to walk through? So these aren't a lot of big surprises. Except for the polling thing. I mean, the most malware we found seemed to be hosted in Poland and although that's technically somewhere around the Eastern European place that we all, everybody quotes the media, all the malware comes from, I just didn't think the Polish had it in them. But apparently they did. Right. So, you know, it's normal stuff. Casa.com. Five ounces of pain. MC Hawking. You know what, it might sound like to you we've never looked at these before, but every time we look at these, it's just shocking. And what is this hope? Hope? Don't know. But, you know, these are the top domains that we found. And like I said, like Paul said, we use three different methods to do this. The Google Safe Browse, our internal database, and a tool called MJD. And we would cross-verify the results with each one of those tools and actually, you know, go and do random spot checks to make sure we were actually getting malware. And it wasn't just false positives. So here's an example of a guy named LeBron James. I don't personally know who he is. I think he's a golfer. Apparently his wife hit him with a club or something. I don't know. But if you were to search for... Right. Right. So if you were to look a couple of weeks ago on Google, you would find there was a link, you know, when you just put LeBron James in, it would take you to a website that would ask you to install a flash player update. And we all know how great flash player updates are. And you see it in the news all the time. So you want to get the latest greatest. So when you download that, bam. So, you know what's funny is we're looking at examples of malware. And it's kind of funny because I don't really think there's any other profession where you spend a lot of time looking at like the worst-case scenarios of things, except for maybe doctors. Now I always think that looking at malware like this is the example, like the classic, it's the doctor's time to go look at pictures of what happens at SCD days or something like that. So let's go with Daryl Stingley here. Does anybody know who Daryl is? Five people. So I felt bad because, you know, like we said several times, most of the stuff that's used for like trending talk, like this malware search poisoning, are pop culture stuff. And we look at the list of these things. I'm like, I don't know who any of these people are. One of them ended up becoming an LPGA player and this guy apparently took the hardest hit ever in the NFL.  So this actually happened on Tuesday. We wanted to show you a more recent example. So if you were to put his name into Google, you'd get a site that redirects you that installs malware that does this. And it's pretty well documented that it's malware. And if you notice for the Freedom's Open Source Advocates, ClamAV does not catch this. Yeah, no. So you take that same term and go over to Twitter. You'll notice there's a, there will be a whole lot of people that, well, there's a whole lot of links or, you know, discussion about them. And there's a lot of different URLs, but they all take you to the same kind of site at YouTube. And if you notice over on the right hand side, they use this video of Daryl to promote Lindsay Lohan porn. Which although I'm not happy with, it's better than, you know, the Justin Bieber stuff we find. So they even get clever about this and they'll use, they'll embed these videos and they'll put overlays over the videos. And this one says, due to copyright in YouTube Terms of Service, we cannot upload the whole video here. Go to this website and get instead. And apparently people follow this stuff.  So, in our last example, we have three different accounts talking about three different trending topics with three different URLs. But when you follow them all, they all lead you to a .cn site. And as everybody knows, you don't click on anything in .cn. And if you do, bad things happen. So, we'll go without further. Got it. So, you know, a couple of the other examples that David was just showing were, you know, some on Google, some on Twitter. It's interesting the relationship between the different ones. You know, you saw an attack going from Google to YouTube, you know, from Twitter to YouTube. And really the interrelations that are happening. People using these terms to take you to a malicious site. People using these terms to take you to a spam site. And so, you know, we were looking at, you know, we were looking at the top search results, the top search results.  So, you know, as we saw earlier, you know, over the snapshot that we examined, only one percent of the results were to Twitter. But, you know, we talked about kind of why that was. Because of the lack of actual ranking. Right. So, because we were really kind of going to it from the eyeballs trying to reach eyeballs.  It's a little inefficient because you don't have that opportunity to make your stuff go higher in the ranking. So, when it comes to Twitter, we want to take a look a little bit closer at what actually is going on.  What else is taking place in that network? And so, we spent some time looking at the different characteristics and types of Twitter accounts. We were looking at if we connect to the Twitter stream. And we did this from two standpoints. One was through the streaming API and getting a view of kind of almost real-time sample of all the tweets that are happening. The other is through white-listed API key access, being able to come back and query accounts to ask for particular information. And so, what we were able to see is, you know, for any particular account, how many times they've tweeted? How many people are following them? How many people are following them? What do you think about Twitter? There's really only three things that you can do. And so, that's really your feature space. I mean, you can also look at someone's profile. You can also look, as we just did, the actual URLs that are in the tweets. What we want to really understand kind of what's the behavior, how legitimate users are using this network, and then kind of how we're illegitimate users using it. And is there an opportunity to build out a reputation? Is there an opportunity to build out a reputation? So, there's certainly a fair amount of work on doing kind of content-based classification. But if you think about what happened in the email world, everybody was doing content-based classification. Everybody was doing Bayesian. Everybody was doing reg access and so forth. And then kind of the world looked up and realized, wait a second. There's a small set of good senders, and then there's this big set of bad guys. So, we can actually use the reputation or the behavior of this particular IP email. I mean, it got us 95%, 99% catch rates. And so, kind of one of our goals here is to understand is there the potential for the same type of classification for social networks. To be able to take those users and without looking at their profile, without waiting to look at the content that they posted, be able to build some user reputation and classify them. So, when we dug into the different networks, if you dug into Twitter, it's a great example because the API is so open, it gives us the ability to easily ask questions. But on the other side, it also gives the attackers the ability to kind of also easily create lots of accounts and also easily inject lots of content for very low costs in terms of computing and bandwidth. So, one of the things that we looked at, we have a little over 25 million Twitter accounts that we've analyzed. So, you think about the whole set of over 100 million Twitter accounts that exist. We have access to over 25 million of those that we've examined. So, you know, a pretty substantial sample or subset of the Twitter universe. So, after looking at that, you know, one of the things that was one of the first questions that we wanted to ask was kind of what's the actual Twitter user? You know, what's the true Twitter user? Who uses Twitter in here? I probably should ask who doesn't. So, most people. So, now see if, you know, people in this room are a true Twitter user or not. And, you know, we said the bar pretty low. We said, hey, a true Twitter user, somebody that has sent at least 10 tweets, they have at least 10 people following them, and they're following at least 10 people. It's a pretty low bar for you guys that have actually used the network. But what we saw is only 29% of the accounts on the network meet that criteria. So, you think about it, you know, 71% of the accounts on Twitter really aren't using it. So, you know, that was kind of this first thing that we noticed. I mean, the vast majority of the network is not using it. The, if you look at it a little more closely, I mean, what we saw is if you look at how many followers each account has, the point here is, you know, 16% of the accounts have no followers. So, you think about that. Basically, one in every six accounts is on the network, nobody's listening to them. Right? If you think about it, you know, over half of the network, 52% of the network have less than five followers. So, a couple of people are listening, but not many people care. Right? But, you know, it's interesting that only 9% of the network has over half of the followers. So, the various kind of small set of the overall population that kind of people are kind of tuning into and listening to what they're saying. So, that's kind of one feature. So, what's funny is it seems like that Twitter's become high school again. That, you know, you have your clicks of people that know like five people, then there's people that everybody know. Exactly. Exactly. So, what happens is, you know, that's the looks at kind of who's following. The thing we looked at next is how many people are you following. And so, the point here, again, out of all 10% of them aren't following anybody. They went on, they created an account and they don't care to listen to anyone. There's one in five accounts following nobody. There's only 10% of the accounts that are following more than 100 people. There's only 10% of the people that are listening to a stream that's kind of interesting enough to kind of actually pay attention around the clock. The next thing we looked at was kind of more interesting the relationship between those two numbers. You know, if you think of a normal social network, you're kind of following the same number of people that are following their relationship. It's kind of a two-way connection. Where in Twitter you have this opportunity to have it one way. And so, what we saw is that 55% of the network is actually using it with a kind of almost a two-way graph where they have roughly the same number of people following them as they're following. You know, plus or minus five is the criteria window that we use. So, 55% of the network is kind of using it like a normal social network. What we saw is that, you know, 13% have more followers than they have and the other side is, you know, 32% of the network is following more people. So, it really shows that about half the network are using it like friends. There's about 13% that are celebrities. And then there's about 30% that are consumers of content. So, one thing we want to look at was, okay, how many of these are real accounts? How many of these are legitimate people and legitimate accounts? So, we look to examine this thing that we call the Twitter crime rate. And the Twitter crime rate that we want that are created and then suspended. And these are suspended by Twitter. So, these obviously aren't all the accounts that are doing things that are malicious, but at least a measure of over time how many accounts were created doing malicious misuse and then kicked off the network. So, if you look back since the beginning of the network, so this top left view is a view of since the beginning of the network, the growth of the network. So, this is the user growth of Twitter since 2006. You know, one of the interesting things is red carpet error. If you look at from November of 2008 to April of 2009, what happened is, you know, all the celebrities came. So, if you look at the top 100 people on Twitter today, 50% of them joined in the same 6 month period. So, you know, the Ashton Kutcher, the Kim Kardashian, the Diddy's, all the world, all joined in the 6 month period. If you look at what it did to the growth rate of Twitter, it went from 2% to 20% a month in that 6 month period. So, what happened there, as we know, kind of where the users go, the attackers go. So, this looks at the Twitter crime rate since the beginning of the network. So, since 2006, when the network first started, there was 1% of the accounts that were created in any given month that were suspended or kicked off by Twitter. If you look at 2007, it went up to 1.7%. You know, 2008 went to 2.2%. In the middle of this red carpet error, it increased 60% to 3%. But four months later, the crime rate jumped to 12%. Right? So, one in every eight accounts that were created on this network were being kicked off. And again, these are only the ones that were being kicked off down. So, it kind of simmered back down as the user growth simmered down. And so, if you look at what we've seen so far this year, it's basically it's gone from 2% to 1% and fluctuated in that range. So, the average this year is 1.6% of the accounts that are created in any given month are being kicked off for misuse or inappropriate activities. And again, these are only the ones that are identified successfully. So, we want to understand that better. Kind of, what are the behaviors and properties of these types of accounts? So, one of the things that we looked at is we look back at this friend follower delta. This friend follower delta, remember what's kind of the difference between the number of people you follow and how many people are following you. And the thing that we notice here is that the attackers are using pretty aggressive kind of recruitment activity to get a higher number of followers. And so, their delta is higher. So, what you see here in the green space is the delta for legitimate accounts. So, on either side, people that have more of the suspended accounts, you see a very much higher delta because either they have successfully created a higher number of followers or they're still in the process of following people so those people can follow them back and so they have a higher number of friends. And so, the pretty interesting attribute to use to get some separation. The other thing that we looked at to get some separation is this number that we call the tweet number. And the tweet number is pretty simple math. How many days have you been on the network and we divide by how many tweets you've sent? So, it's basically on average, how many tweets have you sent since you joined Twitter? And so, for example, my tweet number happens to be like 1.8. And I think Dave is like, what, 3? 3.2. So, it's interesting. I know some friends, a couple of you guys in the room, was tweeting numbers 40. So, you're like tweeting every 15 minutes on a work day. And I'm like, wow, that's pretty high. You're kind of annoying. But then there are some other accounts, if you know, that are actually tweeting 100 times a day. You think 100 times a day, but it's only, you know, 0.19 percent of the population. So, you know, it seems like, okay, it's only a small number of people, 0.19 percent of the population. But what happens if you think of that 0.19 percent of 50 million users? You're talking about a couple hundred thousand users tweeting at least 100 times a day.  You're talking about 38 percent of all of the traffic on Twitter being generated by this 0.19 percent of the population. So we thought this was a pretty interesting attribute. So what we did from there is kind of really looked into how can we begin to build some level of reputation by coupling these features together. Coupling together this friend follower delta along with this tweet number. And as we did it, we got some interesting separation or interesting clusters of user types. So, David, step us through a few of those. So this is a friend follower delta on the positive side, which means that there's generally a lot more people following them than they're following. And, you know, the usual suspects are there, Fox News. It's funny to note that number three, number four, number five are that Bieber kid. And, you know, at least Miley Cyrus makes it on the top list there.  Which I don't know what that means, but polishers, I mean, it's great.  I don't know what the Icekeet then tweet is recruiting, but it looks like the rest of the stuff kind of is like financial news or, you know, tweeting kind of stuff. And then, you know, the lower you get or the closer to zero you start to see some scammers like the money wholesale.  I'm aware of, but if you do, I'd like to know about this. You know, in the L.A. restaurants, I mean, there's not really anywhere good to eat in L.A. except for pinks. But so when you get the negative numbers, you definitely find scammers like, you know, instant biz tips, camphor porn. I do know what that one is. Tweet stock tips and this 365buying.com. So the lower, like the farther down negative you go on the tweet number, the more distinctive people or scammers are becoming. So like this is an example. This is a site of a Twitter follower. He has got a friend follower, Delta of negative 3-2, but he's got a tweet number of 108, which means he's basically tweeting all the time. But no one's really, you know, following. And if you take a look at it and go to the site, it's a free software site where you can download well, they purport, you can download all kinds of different activities. But if you take a look at the Google Diagnostic page, it becomes more clear what it actually is. You know, 10 Trojans, 4 exploits, 1 scripting exploit in the last 90 days that, you know, Google scanned it. So obviously it's not a very good site. And with that, we're going to go into the top 10 search terms used by malware. This is actually the money shot of our presentation. The money shot. The money shot. So it's interesting. So we looked at, you know, kind of what's going on on the different search engines. We looked at kind of what's happening on Google being Yahoo. We drilled into Twitter a little bit more to see kind of how the attackers are creating fake accounts. We saw that over 70% of the accounts on there really aren't using the network. We looked at the types of categories that the malware doesn't like. And so, you know, we learned a lot about kind of how this is happening, the scale of the search engine optimization attacks. And so, you know, one of the things we talked about are the categories. We talked about the fact that, you know, we did this for 57 days. We saw over 25,000 search terms, 5 million results. But out of those 25,000 search terms, you know, there are some that are more popular than others. There are some that are kind of used more in those search terms. Which ones are being used? So it's a very wide set of things. You know, so on the list we had a couple NFL players. We had some politicians, some actresses. We had, you know, you look at, you know, one of the guys on the list was a guy named Adam Willer. Anyone heard of Adam Willer? It's a guy that cheated his way into Harvard, kind of forged transcripts. They got into Harvard full scholarship and now he's facing about 20 charges. Identity fraud, forgery, larceny. So, you know, the poor guy is kind of having some troubles right now. So, as this news broke, he became, you know, one of the top... Yeah, he's hiding. Yeah, that's the least of his problems. So, you know, look at the top search term. It was a lady named Lois Wilson. Lois Wilson and her husband started Alcoholics Anonymous. So, you know, what happened, the reason she was trending is on April 24th, there was a movie that came out that told her life story. And so, she was actually... If you look at all the tally of the results of the malware that we found, she was the top search result that was being used. And we're like, we're in Vegas, this is DEF CON. That's not a very interesting term to, like, say it was the top of the list. So, we went to our scientific poll and we said, hmm, let's really understand kind of what's our favorite search term that was used for malware? What's the viewer's choice? So, what we came up with is if you look at the number two search term that is Hope Dwarfsky. Hope was a model, actress, TV personality. She was playmate of the month in April 2009. She was on the cover with South Roger. And last month, she was playmate of the year. So, if you look back at the covers, you know, South is having fun with a fan there. If you look at the issue in June, it was interesting because it was actually a 3D photo shoot.  And I wasn't able to get enough 3D glasses for the room, but what we were able to do was have Hope come and join us as the viewer's choice of the best reason to click on malware in 2010. So, I'd like to introduce Hope. Thank you for having me. So, thanks for coming up. Thanks for stopping by Vegas, for stopping by DEF CON. Have you ever been to DEF CON before? I've never been here, but I've been told to turn my Wi-Fi off in my Bluetooth. I don't know if that's right, but it's off. So, you know, obviously you've been busy, had a lot of success. Your name's all over the place, and what we've found is that, you know, the attackers are using your name. Did you know about this at all? What do you think about it? Everybody Googles themself, first of all. First, I've Googled myself, and I've seen my name with things that I know I haven't been a part of, or I haven't done. So, that was not news to me, I guess, but the part where I was part of viruses or any of this definitely was. So, when I got the call to come in, I was more interested and I wanted to know why or find out more about it. Interesting. So, you know, one thing we looked up is you use Twitter.  Okay, cool. Just in case you needed to know that. Sometimes I'm like seven times in a day and other times I go like two weeks without doing it, so it's different all the time. So, you actually, you've been on Twitter for a while now. You have this verified account. You have over 10,000 followers. You know, we're talking about how the you know, how are you using it? How does it change your life at all or what do you think about the technology at all? I think the coolest thing about Twitter having a Facebook account mainly Twitter is that you can communicate with people instantly. So, I might send out a tweet. Last night I took my grandmother who told me to pose for Playboy when I was questioned whether I should do it or not. I took her to the Playboy mansion to meet Hugh Hefner. So, I tweeted that this morning and read, you know, whoever's replying immediately and it's really cool to read it and then sometimes reply or send a direct message. So, that's what I use it for. I get that I can communicate with people that normally can't reach me and I can't normally reach. So, we didn't talk about this beforehand, but so your grandmother told you to pose and then you took your grandmother to meet Hefner last night. It's really a funny story. I'm from Texas, a small town in Texas and when I was approached to pose for Playboy, I was scared to death to tell anybody.  So, I didn't tell anybody. I was just, like, leaving it on the table and the first person I told was my Nana and Nana said if I was your age and I had the opportunity, I'd go for it. So, so, when she visited me in LA last week, last night was her last night there and so I took her up to meet Hef. Can I ask a question? I just have a, I want to ask a question everybody wants to know here.  Probably start talking nerdy to us because we're kind of into that. If you're telling us you could do it but you won't because you think we're nice or sweet, we'll be into you because I really don't want any of my stuff hacked after I leave here. Got it. So, the best way to impress is not to hack her site. She's, we're walking in. She's like, am I going to go home with my site? My site's going to be down. So, with that, that wraps up our session. Thanks again to Hope. We have a little talking for you again as, you know, a best excuse to click on malware for 2010. So, thank you. Got it. So, we, you know, actually have a couple minutes left. So, are there any questions? For us. Yeah, are there any questions for us? The two guys. I'm Paul, he's David, Barracuda, anybody remember that? Okay. Sir. Got it. So, a question? The best defense. So, you know, it was interesting. Thanks. So, the question was, any recommendations for the best defense for these attacks? So, my marketing department would like if I said Barracuda right now. But, you know, the point is that, the point is that, you know, most of these things, you know, 98% of them were things that were flagged by existing technology. Right? So, you were all filtering, you know, antivirus signatures, malware lookup databases. So, the good news is, as long as you're using some protection, right? We're still talking about the search stuff, right? Hey, apply that to any part of your life that's appropriate. As long as you're using some protection, you know, 98% of these things you would actually be definitive from. So, the biggest problem, and it's hard to say this as a security researcher, we spend more time looking at the problem than the solution. And most of the solution just seems to be train people better. But that's not really a scalable solution. Another question? So, the question was about, you know, Paul Vixie creating a reputation site and being sued. So, it's interesting, you know, always to kind of see the attackers use the legal system against kind of people that are trying to defend. So, we, you know, we kind of had to deal with things along those lines certainly, but it's kind of part of the risk of the business. So, with that, I think I'll wrap. For those of you that are interested, we'll be in room QA5. Our friend Hope will be there as well for a few minutes if you're interested in and ask you more questions about our result or having a picture with Hope. So, hey, thanks for having us. Have a good day.


Maui's new short-term rental property tax. Oh my goodness. Okay, here we are on Tom Yamachika talking tax. Tom Yamachika is president of Tax Foundation of Hawaii. I'm Jay Fiedel. This is ThinkTek, and we're talking tax with Tom. How are you, Tom? Nice. Great, thanks for having me on the show again. Absolutely. So now we're gonna talk about Maui. You're taking a short trip over to Maui, to the county council, I suppose. Yeah, some tax payers on Maui are getting a nasty surprise this year, because they didn't do anything and their real property tax doubled. Oh, geez. Yeah. Actually, yeah. Or maybe more than doubled. Is what a given homeowner pays in Maui more than what a given homeowner pays in Oahu? Well, it depends on what kind of homeowner you are, because in Maui, there's a three-tiered system of owner-occupied tax, right? With the rates going from 251 to 261 per thousand of taxable valuation, which is about a dollar lower than what we have here in Honolulu. Okay, but if you are in a second home or renting your unit, there's a classification called non-owner-occupied, where the rates go from 545 to $6.90 per thousand. So a little bit more than double the owner-occupied rate, but there's more. For short-trip rentals, the rate is 1108. Whoa. Yep, which is slightly higher than hotel and resort. Whoa. And it's actually the second highest property tax rate they have on Maui. The highest rate is timeshare at 1440. That's like four or five times what an individual rate would be for a resident in the property. Yeah, it matters a lot if you own your home and you're living in it. Okay, so what happened? Let's talk about not only how this works, but how it came to pass, so to speak. Okay, what happened was there was a, what I call a flash change in law. I'm gonna say that because it was a pair of bills, known as bills 129 and 130, they were introduced on November 20th, 2020 past the council on December 4th, and were signed into law by Mayor Victorino the very next day. So November 20th to December 5th is like two weeks. Is there a reason for a rush? I'm not really sure, but it looks very suspicious. And what that did was it said that if you have a property in a district that doesn't ban short-term rentals, then as long as you don't live in it, you'll be taxed as a short-term rental. So previously, if they had a long-term rental in there, it would be classified as non-unoccupied. If you lived in there some of the time, it was classified as non-unoccupied. Okay, no more. It now changes from non-unoccupied to short-term rental. And with the effect that the person's tax may double or even a little more maybe. Well, it's just an immediate reaction, Tom, is that if I have a piece of geography that doesn't ban short-term rentals. And if I am not living in this property that I own in that geographical area, my tax rate is gonna go way up. So A, this requires me, I mean, as an economic matter, or at least it encourages me to actually use the place as a short-term rental, even if I would not otherwise do that. Even if I would otherwise, for example, do a long-term rental. So it sort of forces me, incentivizes me to bring short-term rentals into my property. And the other possibility, the other idea though is that- Or you live in there. Well, yeah, but I'm assuming for this discussion that I'm living somewhere else. Okay. The other possibility is that, gee, this is, if I don't have it rented, but I am charged tax on the assumption that it is rented, I'm really losing money. It's terrible.  And in the end, let me just throw this actually, you probably analyzed this. At the end, I'm gonna wind up with a patch of land, this place where short-term rentals are not banned, where everybody is a short-term rental. That this incentivizes short-term rentals. That's the back of it. It incentivize short-term rentals so that the square I'm describing, the geographical area I'm describing will all be actively short-term rentals in order to respond to this bill that was passed by the Maui County Council. So now I have a kind of ghetto of short-term rentals. Is this something you thought about? Well, that I think is what they intended. Now, normally in real property tax, when you have zoning, the tax that applies to your property, short-term rentals or no, is usually based on the highest and best use that's allowed in your zoning. So if, for example, you had a watercress farm in an industrial area that's zoned for strip malls and so far, I'm thinking like Pearl Ridge. You're gonna be taxed on that area as it was commercial. Same as commercial buildings.  That's called highest and best use concept and that's familiar to property tax. Well, it's just something where me as the owner of the watercress farm could seek a variance.  It doesn't matter what you do. You're right, I'm thinking about it now. A variance is to allow for a non-conforming use, a use that is maybe too industrial in a residential area, that kind of thing. That would be a variance. But it would not be a variance to allow a watercress farm in a shopping center area and that would be backward. Okay, good. Yeah, so when you read the FAQ page at the real property tax division's office, that's just today, you know, we're just doing what everybody else does. We're adopting the highest and best use valuation concept and that's how we're doing it. And everybody's kind of like scratching their heads at that because it's kind of, well, why the heck did you need all these lightning fast change in the ordinance to do what you all were saying was a common thing all along? Okay. And I think that part of the problem may be a fiscal. You don't have money and they need to raise money. As you may remember, the normally counties get part of their budget from the state in terms of shares of transient accommodations tax, right? When the pandemic happened, Governor shut off the spigot all the way. No more dollars to the counties, period. Now that may have restarted, I think June 1st, but for a very long while, it wasn't happening. And... But can you look back?  How about coughing it up? Isn't that possible? Apparently not. The counties never had any entitlement to it. It was just something that the legislature gave them.  By the governor. That troubles me, that troubles me. If the legislature gave it and set it up that way, I think I suggest to you it wasn't entitlement, but here we have the entitlement is taken away by somebody who didn't award it in the first place. And the reversal, his action was not by statute. It was just by proclamation. He doesn't have the right to do that, does he? He says he does under the governor's emergency powers.  You can think about it as well. The state government needs money and they kind of make a decision, well, they can't afford to share this TAT anymore, even though the TAT is not coming in. So it's probably a moot point anyway. But the governor said, okay, well, I can shut off all the earmarks. And that's what he did. In fact, if I think it was May 2020, when that happened. I really think it's a questionable decision. I mean, I know it may be, you know, Pyrrhic in the sense that there was not a lot of TAT anyway, but still as a matter of principle, I don't think he has the power to do that.  Well, that's what we said. When it came to like shutting off the public records laws, for example, shutting off the collective bargaining laws, you know, we had loudly complained about that because we were kind of getting into an environment where we didn't have laws anymore because all of them were suspended. Yeah, where does it end? Where does it end? Before you know it, you're talking about constitutional rights. Well, the governor's proclamations, at least up to now have been, you know, with a 20-page single space list of laws that are suspended and one sentence can basically rip up an entire chapter of the interest. Did anybody take them to court over this? Somebody did and they lost, but I don't think they were challenging the right provision. I mean, like for a provision like the public records laws, okay, what does this have to do with us being in an emergency? Okay, the governor can suspend laws to streamline operation and alleviate burdens and that kind of thing, but you're absolutely right. He doesn't have the right to do anything. He darn pleases. Even the suspending of the Freedom of Information Act, as I recall, the argument there was that we don't have enough people to respond to Freedom of Information Act requests because, you know, our staff can't come in or something along those lines. At the same time, don't you remember there was an issue about whether one department, the staff of one department could be brought in to do the work of another department and the union said no and he went along with that. So it was a self-created problem. He could have had the staff to respond to the FOIA request, but took steps to, you know, make it impossible or- Well, not only that, but he also suspended the collective bargaining law. So the union coming in with this argument, you know, they could have been told, guys, I suspended that law. So you really don't have an argument. You know, it distracts me. I mean, I don't want to put a value on this, but it strikes me that we did not, legally speaking, we did not do very well through the period of COVID. Would you agree? I would agree. I mean, there was a lot of, you know, unnecessary reactionary knee-jerk, you know, statute suspension to what end I don't know. It was kind of, I think part of a, you know, the outcome of a session where the governor asked everybody, well, you know, which laws bother you? And they said, okay, this one. And they go, okay, we'll suspend that. I'm going, but that's not what the emergency power statute is for, okay? The emergency power statute is so you can respond to an emergency. With emergency steps. Right. So anyway, so it sounds like whatever happened at the gubernatorial level, the county of Maui was strapped. Well, yes, they were. When they looked at it, you know, recently, December, whatever. Yeah, I mean, not only did they have this spigot turned off by the emergency proclamation, but now with, I think it's what Senate, Hospital 864, there's a bill that basically proposes to give the counties the right to impose a surcharge on the TAT, but it basically says we're going to stop sharing permanently. You mean in violation of the state statute? No, it amends the state statute. Okay, okay. This is in the legislature. Okay. Yeah, so that's one of the bills that's on the governor's desk. A, it would shut off the spigot to the counties permanently, but B, it would say that they can add their own surcharge to the transient accommodations tax, but without any help. So my guess is that he'll sign that. Why? For the same reason, fiscal purposes, the state will get more money. The counties will be on their own, but they have the prospect of getting more money too. So everybody is happy except the taxpayer.  Because? Because, you know, it's unlike the GET surcharge. In the GET surcharge, the state collects the money, turns it over to the counties, right? Okay. This one, there's no help. So the counties have to set up their own tax office to monitor, enforce TAT, the TAT surcharge. Oh, okay. I see. Yeah, so it ain't cost a millions to do that. Yeah, so they need to get staff hired, they need to get staff trained, and that's just the start. At the end of the day, you have a redundancy. You do.  They are stridently opposed to this. The hotel industry is opposed to this. Because of, of course, the prospect that we'll go from, you know, 10 and a quarter percent TAT to 13 and a quarter percent. And that's before the GET is added on. So what's interesting, though, is that the TAT issue, and this is good that you mentioned, the TAT issue is a tax that the counties have to pay for the tax that the counties have not had the infrastructure, the apparatus to collect, right, right now, up till now. But the real property tax, which is this strange bill you mentioned in Maui, the real property tax has the infrastructure. It's already systematized. Yeah, the counties didn't have it from the beginning, of course, but they wanted the independence, the lobby, the, you know, the 78 Con Con, to give them that. And the Con Con gave them that. And so, you know. Now, today, they have the ability to collect tax themselves. And if it's a matter of interpretation or rate, they can do that within the existing infrastructure, right? Right. It's not hard. And there's a second issue. And the second issue is that apparently, according to the county auditors report, a number of the hotels came to the administration and said, my God, our business is going through the floor. Can you give us a break on valuation? And they did. It actually went down. The valuations went down, yes. How do you do that by county action? Yeah, you convinced the appraisers that the value of XYZ hotel isn't as isn't as high as it was the previous year, which, and there's a credible argument for that because there's no tourists coming. So how can you, how can you, you know, make it as a hotel? But wait a minute. I mean, this is, this is not a matter of county council action. It's not a matter of the mayor. It's just a matter of talking story in the back room kind of thing. Can you give your assessors to give us a lower rate? The mayor may have approved it. The mayor is in charge of the assessing agency. So he probably would have had something to do that.  So is it a memo? Is it a proclamation? No, none of the foregoing. None of the foregoing. Just talk story, that's all. Yeah. And then apparently it bothered the county auditor enough so he wrote about it. And that's kind of where I'm getting that information from. So, there was, you know, some devaluation of the hotels done by administrative fiat. Okay. And my question is, well, who else got the opportunity to come down and, you know, talk story with the appraiser and say, well, geez, you know, we've got no tourists coming.  Yeah, what about a homeowner who lost his job? Yeah. I'm troubled by this. It actually sounds that Cyrus Vance would be interested. Hey, maybe. But that's what happened. We're talking here about, this is what happened. Very little of it, I think, hit the press. So that's why we're talking about it here today. Well, that's an underlying question here. You know, you have this talk story thing about lower valuations, which is, it really sounds like Trump. And then without any transparency, without any public announcement, even with a concern to the concern of the state auditor. And then you have this strange bill that pops up from nowhere, which essentially increases the individual taxation of a person who has a short-term rental property and a given sum. I mean, it sounds terribly unfair. And what makes it even more unfair, I think, is that this short notice bill, the quickie bill, nobody explained. Did anybody try to explain? Did anybody ask for an explanation? I didn't see one. I mean, it may have gone through so quickly that nobody had the chance to. And that's one of my concerns. I mean, how can you have appropriate public notice and input when, you know, start to finish is two weeks? I mean, that's very hard.  I think they thought they were being clever. Because, you know, there's an enforcement problem with short-term rentals. How are you gonna know that to taxpayer A, real property owner A, who lives out of the district, the ghetto, so to speak, is involved in a short-term rental? Is there a reporting requirement or can he just do it and not say boo about it? This way, arguably, the county doesn't have to get into that enforcement issue. If you own it and you don't live there, then you must be using it, or you could or should use it as a short-term rental. Yep, that's... Would you oppose that on a, you know, assuming it wasn't a surprise bill like this, would you agree that that's a legitimate reason? Yeah, it does simplify enforcement. That's what it does. But then again, you know, you have to kind of hear what the stakeholders have to say. You need to consider the equities, balance the values. No indication that any of that was ever done. Well, desperate times result in desperate measures, don't you think? And the question I put to you in a larger sense is, are we in desperate times? Ah, well, I think it's in the eye of the beholder, but I think some people do think we're in desperate times, and that's why we're coming into doing stuff like this. I personally think that, yeah, we had a bad catch and we're kind of getting over it, but does that require like the wholesale suspension of laws? I don't think so. What really troubles me about it is that when you have this, you know, suspension slash emergency milieu, agencies kind of pick and choose what they're following and what they're not. And there's room for a whole lot of arbitrariness. Are we a government of laws or of men? Apparently, until we get into desperate times, then we're not.  And certainly the state is in desperate straits, but the state has this, you know, preemptive power. And it did promise and agree and created entitlement for the counties and then decided the governor by himself decided that it was not gonna follow through on that because we were in desperate times. What troubles me about it, Tom, and I really be interested in your opinion is who's to say the counties are not in desperate times? Is the state more important than the counties? The state is saying, your problem, boys, we're not gonna help you out.  We're cutting your funding. Go find a way. And that's very troublesome. It is very troublesome. I personally thought that one or more of the counties would have gone to court and said, you know, come on guys, this is not an appropriate use of the governor's emergency power. Where is the connection to the emergency? I mean, this is just a money grab. That's all it is. That's what it is. It sounds to me like ultra virus because there wasn't entitlement and because there's no good reason to cut it off. So you just keep the money. Why are you keeping the money? Because I can. That's why I'm keeping the money. So sue me. That sort of thing. I really think- But nobody did. Yeah, nobody did. Nobody did. So we were all in deer in the headlights not knowing what to do. And I like to ask you this other larger question is, have we learned anything? I don't think so. I mean, it doesn't look like it with, for example, the current state of the public records laws. We're kind of back to where we were in the 1950s where nobody was really following anything. And agencies were saying, oh yeah, thank you for coming in the door. And then just kind of like, crumpling the request and throwing it in the trash can. Well, in my practice experience, if you wanted information from the state, yes, there was a statute that allowed freedom of information and put an obligation on state agencies to respond, but they never did. And when you caught them off the record, they would say the only way you're gonna get this is to us. So even for the most modest freedom of information act request, a lot of people had to go to court and sue them. That's expensive and time consuming and unproductive really for everyone, including especially the taxpayer. So a couple of years ago, the foundation got involved in a case where it involved like revenue estimates. The requester had gone to the Office of Information Practices and said, hey, this is public information. Office of Information Practices agreed and they wrote an opinion saying, go disclose this. And then the Department of Tax appealed it to circuit court. They said, no, we're not gonna do that. We don't think you're right. We, they lost the appeal. Wasting everybody's time. So the other thing that comes out of all of this is, okay, so we had emergency proclamations left and right. Not one, but a series. Not one area of law in the state, but many areas of law, some really questionable as to whether they were the appropriate subject of emergency. So now it is now, and you can quote me on this, it is now June of 2021, long after these proclamations began, have any of these proclamations been reversed? And if so, which? And if so, why those, not the others? And are there any left standing? Well, the way the proclamations worked is each one kind of built up on the last. So everything in like the first five were amended and restated in number six. Everything in the first six were amended and restated in number seven and so forth. So we're up to, I think, 20 now. We keep going. It's like the ever ready battery. We keep going and it's now June of 2021. And it's a year and a half at least after this all began. And are we still repeating the earlier ones or are we? Yes, repeating the earlier ones. So we're not excluding them simply for the passage of time. We're not saying, okay, this is not an emergency anymore as to that particular area of law. We're saying it's all still an emergency, suffer. Right, exactly. That's wrong, isn't it? I think it's wrong. We want to reopen everything. Want to get back to normal. And yet the state doesn't see this as normal at all. They still see it as a burgeoning emergency legally. Yep. And they do that because emergency proclamations have a limited life. So I think it's 60 days. So on the 59th day, they come up with emergency proclamations saying, well, we're still in emergency. So here's what it is. We'll amend and restate everything that's come before for another 60 days. And you kind of daisy chain it down the path. So you're in a state of emergency for a year and a half or more. Well, it wasn't clear at the outset. I remember you and I talked about it back when about whether you could do that, whether you could daisy chain this way because the law says you get 60 days to do your thing with emergencies. And what the administration here has done is it has taken that and made it into not 60 days but a year and a half. I don't know if that's what the legislature intended but let me ask you this question. If we were going to reform this area, if we're gonna make this kind of thing impossible, would any particular legislative action be helpful or are you saying rather that we have to go individually the court on anything we feel that's overreaching? Well, you know, in this past legislature, there was I believe a bill that was aimed at reforming this daisy chain practice. It passed conference committee. It was all set to go up to the governor and then lo and behold, the house on the very last day switched its position and said, okay, we're gonna recommit this. So everything falls to the ground. And no transparency on that. Yeah, we don't know why that happened. Well, Tom, it's always a pleasure. I always, after our discussions, I always sort of need to soak my head a little but that's just me. And of course, I look forward to the next show and the next set of multiple complex compound revelations. Thank you, Tom Yamachika, president of the Tax Foundation of Hawaii. Thanks, T. Aloha.


Hello everyone traders friends investors Lee Lowell here from smartoptionseller.com today is Saturday June 26 2021 welcome welcome to another edition of our Saturday YouTube videos We're starting a new new format here this weekend I've gotten some feedback from from watchers that they they want to see some shorter videos shorter clips of how we do things So typically our our videos can run anywhere from you know 45 50 minutes Which I understand is long people people don't have a lot of time to really sit down for that long So they want to watch things in shorter chunks. So typically what I would do is I Would go over an options trading strategy and then I would move into our Saturday synopsis Which is where I look at the charts and I see how the indexes are moving and individual stocks are moving So I'm going to start Cutting those into two separate pieces now So this first video will be the the options trading strategy And then I'll do a completely separate video just for the Saturday synopsis to break it up make it easier for everyone So I hope you enjoy this format if you have some feedback on it Please please leave me a comment sending email because I love hearing from you I want to give you guys the best information possible. So let's jump right in To our options trading strategy for the day as you see on your your screen in front of you We will be talking about selling covered calls one of the great options trading strategies and one That's available to practically everybody that opens up an options trading account I get lots of questions about how to trade covered calls and what actually are they? So today we'll talk a little bit about that and it's also one of the four strategies that I list in my book Get rich with options for those of you who have read the book You know that I put this this strategy in one of the chapters for those of you that don't well That's in my book too. So let's talk about covered calls and what they are and why we want to sell covered calls And and why it's such a great strategy Well number one selling a covered call is a process where if you have 100 shares of stock in your account That you've either recently bought or if you had for years and years There's something you can do with those shares of stock to create an income stream for yourself an income stream that you may not have known really existed before and it's a way to Have someone pay you money for the opportunity to take to potentially take your shares away from you Sometime in the future at a much higher price than where you actually bought those shares of stock So let's go down my list here and and show you what the strategy is and why it's such a great thing now number one It's a way to increase or create an upfront income stream for every 100 shares of stock You have right here. You need to have at least 100 shares of stock in your account for every 100 shares of stock you have You can sell one call option contract Option contracts are all made up of 100 shares of stock so in order to Sell a covered call and we'll talk about selling versus buying in order to sell a covered call You have to have at least 100 shares of stock in your account if you don't have 100 shares You cannot execute this strategy. So what you're doing is so basically you bought Let's just say you bought some shares of a stock a long time ago And they just been sitting in your account and hopefully they've been going up in price And maybe they've been paying out a dividend well, there's another way to to add another layer of of Income or an income stream on top of what you're already getting whether that's price appreciation or the dividend income There's another way for you to create a cash flow and that's by selling a covered call What does that mean exactly? Well, there are call options Obviously options are either put options or call options in this case. We're talking about call options So we're not buying a call option. We're actually selling a call option Against the 100 shares of stock that are currently sitting in your account Now what do you can do is you can you can choose a call option of your You're the you have all the you have all the decision-making powers in this case you're going to choose a call option at a certain strike for certain expiration date and What happens when you sell that call option is that? You're giving the right to somebody else to take your shares away from you Well, why would we want to do that if we have stock in our account? We want it to go up higher in price. Why would we want to engage in a transaction where someone may possibly? Take our shares away from us and then we'll we won't be able to participate in any more price appreciation Well, yes That is one thing that you need to consider and right here in line number three is What I just wrote is that you need to be okay with the fact that at some point in the future You may have to relinquish your shares now some people will do this Because they have a have a price sellout point in mind when they first bought the shares they said okay I'm buying the shares here. I'm going to sell them up here when when the price reaches here. I'm okay to sell the shares Now you can obviously you can sell the shares whenever you want just put the order in with your broker But another way of doing that is by selling a covered call Which not only sets that same sellout price for you, but it you're actually someone's paying you For you to sell those shares to them So you're getting a little extra income just because you're going to sell your shares anyway You might as well take advantage of someone else paying you money and the other reason why someone might want to sell their their stocks is because Like I said, they've had them for a long time they have a sellout point in mind But they sell covered calls because they're gaining this income and they're using they're picking a sellout point That's just way out of range of where the stock Might trade to so they're they're they're using probability analysis Which I'll show you by using a probability calculator because they want to gain the income by selling the call option They're not really interested in letting go of their shares. They don't want to relinquish their shares So they're they're choosing an area where the stock most likely won't rise to by the expiration date of the option contract So you have people that that have have certainly set a sell point. They're saying okay. I want to sell here I'm fine with giving my shares But then there's other people that sell call options because they're they're playing the probabilities They're thinking well, there's no way the stock's gonna rise this high So I'll sell that call option and I'll keep the money and hopefully the stock won't rise that far So those are people that are just trying to play the probabilities And in some cases the stock does rise too far and they're they have a decision to make that Okay, well, do I want to relinquish my shares or do I want to? take plan B which is to Adjust the trade so we'll also talk about that So here we are we've got a strategy where it can create a current income stream And you need to have at least 100 shares of stock in your account and you need to be okay With potentially relinquishing your shares I'm going to show you how you can lessen the opportunity to have your shares taken away from you And that's by choosing out of the money strike prices when you sell the call option You choose an out of the money strike. So if the stock's at 100 You can sell the 120 call the 130 call Those are out of the money strikes and and the stock would have to move pretty far In order for you to have to relinquish your shares So if you if you have the thought that you know what I have these shares of stock in my account And I want to hold on to them for a while. I don't really want to relinquish them How can I lessen the the chance of that happening while still? You know gaining this income that the call option buyers will pay me Well, that's by choosing out of the money strike prices And the longer the date the the longer to expiration You choose The further out of the money strike you can choose as well So, you know longer dated options obviously pay more more time equals more money So you'll get more money for those call options, but you'll also have more what we call upside buffer You're giving the stock more room to run higher without the the the sure thing of you having to relinquish your shares Okay So what happens is that let's just say the stock's at 100 and you sold 120 call That means if the stock rises to 120 dollars, you will have to relinquish your shares But if the stock doesn't rise to the strike price if the stock doesn't rise to 120 Then the the the trade will just expire at the expiration date and you'll keep the money That was given to you by the the option buyer and now you can do the process again You can sell another covered call for another expiration date So theoretically you can just keep rolling these covered call trades You know years into the future as long as the stock doesn't move above the strike price Then you're good to go and you can keep collecting the money And you wait for expiration to show up if the option expires worthless You just do it again So the the key to doing that is choosing a strike price above the current price of the stock So you want to give the stock less of a chance to move up And we'll look at an example We're going to look at an example of how that works now if the stock does Breach the strike price and you have to relinquish your shares Well, then you know if you're okay with that then it's fine Not only will you get the price appreciation Price appreciation from where you bought it to where you have to sell the stock But you also get to keep the money that that call option buyer paid you So if you're assigned the shares at expiration to scroll down here The broker will handle the whole transaction for you You know at expiration The broker will take your shares out of your account But just know that at the stock goes up you've made that price appreciation on the stock So you actually made money Okay, so we're going to look at an example using intel of how that works now Down here. I want to I want to just show you what you can do is that Let's just say the stock starts to move really quickly higher on you and you're and you're thinking god You know the stock moved all the way higher. I didn't think it was going to get that high I really don't want to relinquish my shares. You know, what do I do? What's my defense plan here? Well As with any other option trade you can buy the stuff you can buy that option contract back at any time you like You're not married to it. You don't have to hold it until expiration. You can always get out of the trade So right here you can always buy the option back at any time if you're not comfortable anymore So if the stock really starts to move higher on you and you're thinking I don't want to sell my shares All you have to do is buy that call option back at its going rate Now when you do that you may end up buying it back at a higher price than what you originally sold that option for So you may take a loss by buying that call option back But at the same time The price appreciation you're making on the stock itself will overtake that loss You're all you'll always make more money on the stock going up because you have 100 shares So you're making money as the stock goes up But that call option value will go up as well So if you have to buy the call option back, you're probably you may take a loss on the call option But the price appreciation that you've made on the 100 shares of stock will outweigh that loss So you're actually still in a very good situation Okay, even though you have to buy that that call option back and then you could sell a further higher up strike price on that call option if you wish Okay, and the last last line here, and this is very very important I want everyone to make sure they understand this and and I will show it in the example is that Make sure you choose a strike price when you sell a covered call You have to make sure you choose a strike price That if you get if you have to relinquish your shares You will you will relinquish those shares above your original cost basis on the stock Okay, that's very important and I'm going to show you in the next slide here How that works with with an actual example of shares of stock now We're going to look at we're going to look at an example with intel and this is a this is an example only this is not a real live recommendation So Let's just take a look here We're using intel and let's just say your long shares of intel You bought 100 shares of intel not that long ago at $60 a share. Okay, so you're in the trade Um at $60 a share for intel you bought 100 shares now.  What what do I do? How do I how do I sell a covered call on these intel shares that I just bought at $60 a share? Well with intel let's go to our chart real quick and and pull up the stock of intel and we'll see where we're at here So here's a daily chart of intel and we will go over this in the Saturday synopsis if you stick around for that that other video um intel closed around $55.91 yesterday friday June 25th 2021 Okay, so let's just say you bought some shares of intel at $60 a share It's currently at $55.91. So you're actually You know underwater right now on those 100 shares that you bought. Okay, so let's go back to our Our document here. So you bought 100 shares of intel at $60 a share You want to you want to sell a covered call and get some income? So you're going to choose a september 2021 $65 strike call option For 55 cents a contract. Now, where do we get that? Well, let me pull up my option chain at interactive brokers here I already have it teed up for the intel options Here's my intel tab up here and uh, you know interactive brokers has the last trade of intel at $55.81 on the chart It's at $55.91. So let's just In the middle here $55.90 where intel went out yesterday on friday June 25th. So you bought it at $60. It's at $55.90. So you're down a few dollars But when you want to choose and how do you choose your The call option to sell you have to go through the expiration dates and decide, you know How far out in time do I want to go and how much money can I receive by looking at the strike prices? So let me move myself over here a little bit So when you pull up the your option chain We got call options on the left here and here's your strike prices in the middle So you're thinking okay, I bought shares at $60 And I'm going to look at a $65 strike because I bought intel at 60 You know what I'd be okay selling the shares potentially at $65. That would be a $5 gain You know $500 profit on the price appreciation So I'm looking at the 65 strike and I scroll over to the bid nascom. That's the most current Value for the intel strike 65 call options that expired that closed yesterday on friday So here's it went out 52 cent bid at 50 59 cent offer So we always want to transactions to make the transactions somewhere in between the bid nas so let's use 55 cents As our fair value In midpoint. Okay, so what you can do is you can sell This september 2021 83 days in the future $65 call For 55 cents per contract. Okay, that's what we've chosen Now you can always go to shorter expirations Let's just look at the august expiration 65 calls the shorter the time to expiration the less money you will receive Okay, so those 65 calls are worth about 38 cents The septembers that we're looking at are worth about Um 55 cents. That's what we just decided We we look at the in between the bid nas now if you go and look at a different expiration. Let's just say october 65s Let's see what those would be worth Should be worth more than 55. Okay, so they're worth about 75 cents You can even go look at the 70 calls.  I bought them at 60 They're currently around 55 56 dollars, but I want to try to sell them at 65 maybe 70 dollars. So you have to manually go through each expiration Date look at the strike column decide, you know, where you would potentially like to sell the shares And and see how much money someone is willing to give you To relinquish your shares. So let's just stick with these september options The 65 calls are worth 55 cents of contracts. So let's go back to our cheat sheet here And I will move myself back over So what have we done here? So we were along 100 shares from 60. We're going to sell 165 strike call september for 55 cents of contract. What does that mean? Well with 100 share multiplier You multiply the option price times 100 So you get 55 dollars right up front. Someone will pay you 55 dollars today Um For the opportunity to take your shares away from you at 65 dollars a share Well, why if if intel's currently at 55 dollars, why would someone want to Buy the shares at 65? Why would they want to take your shares away at 65 dollars? Well, that would only happen if intel actually moved back up above 65 dollars a share by expiration Let's just say intel's trading at 70 dollars a share at expiration Well, you have to sell those shares at 65 bucks to the option buyer and they get to buy those shares at 65 While it's currently trading at 70 in the open market Okay, so that's why someone would someone's paying you for the opportunity To to buy your to take your shares away from you at 65 dollars and the option buyer They don't know where intel's going to be at expiration.  They're speculating that intel will go from 56 dollars today Above 65 dollars by september We don't know no one knows where intel will be but they're they're taking a shot And you're taking a shot as well. You're thinking well, you know, I don't really care where intel is As long as I get my 55 dollars and if intel finishes at 70 dollars Um, I still have to sell them at 65, but you know what I bought intel at 60 I have to sell them at 65. So I've made $500 profit So that still works out. Okay. So let's look at the example here You're going to receive 55 dollars for selling that call-ups now if intel stock is trading above 65 dollars at expiration Your shares will get called away But you get to keep the 55 dollar upfront payment and you have that 500 dollars of price appreciation You bought the shares at 60. You have to sell them at 65. So you've made 500 bucks plus another 55 So you've made $555 By doing this trade Now if intel Finishes below 65 dollars at expiration Then the trade just expires worthless. The stock didn't go above 65. So you're free and clear now You get to keep the 55 dollars and you get to keep your shares of stock shares of stock are still intact So what do we do now? Well, we repeat the process now. Let's just say let's just say it's september And intel finishes below 65. So you get your 55 dollars Your shares are still intact. So now you sell let's just say a december 2021 70 call or 65 call whatever you choose you go through the You know the process again and you sell another call option and you get maybe another 55 dollars whatever whatever it is at that time And let's just say intel doesn't Rise above the strike price by that expiration. Well, then you do the process again And you sell another round of covered calls So it could be an ongoing process as long as the stock doesn't go above your strike price at expiration Now if the stock drops Obviously the the option will expire worth as you keep the money But but if the stock drops really far now, you're looking at You know a loss on the the shares of stock that you currently own just like the intel example right now If you bought the shares at 60 and intel is around 56 dollars right now You're roughly 400 dollars in the hole You're 400 dollars in the hole, but this 55 dollars that you just collected helps You know buffer some of that loss that you're currently holding Right, and if you do the trade again in another few months if you're still, you know, at a loss on the shares The the the income that you're collecting from selling covered calls can help offset some of that price appreciation loss Okay, so that's one of the other reasons why people sell covered calls is because they it helps buffer A stock that might be currently underwater for them. Okay, so that's why selling covered calls helps Now let's go to Talk about the the very important Thing that I mentioned in this first slide is that make sure to choose a strike price above your stock Break-even price. What does that mean? Well, let's look at the example here We know that you bought shares of intel at 60 dollars You never want to choose a strike price That where you'll have to relinquish your shares below 60 dollars Because then you're just going to lock yourself into a loss Which is something you don't want to do. Well, how do you know? What the break-even is? How do you know which strike price would would be dangerous in that situation? Well, you then you have to go back to the option chain. So let's pull up the option chain again And we're looking at the september the september call options Move myself one more time. Now. We know that you bought 100 shares Of intel at 60 dollars a share. So your cost basis is 60 dollars So you don't want to have to relinquish shares anything below 60 dollars a share because that would just defeat the purpose It would it would make no sense of you doing that With with intel stock currently at 55 90 or so You know that you have you you're currently with a paper loss of 400 dollars a share right now And you're thinking well, you know what I want to sell a call option to help defray some of that You know paper loss that i'm currently holding right now I'm going to choose, you know, uh, a close to the an at the money strike price on intel And the september 55 calls that's roughly an at the money strike Uh, we scroll over you can see how much money you can get you can get about $3 and 50 cents per contract For that option you're thinking well, that's 350 actual dollars. Someone will pay me right now So you're thinking okay. Well, i'm currently at you know, almost a four I'm about a 400 dollar paper loss on the stock if someone's going to give me 350 dollars. Well, that could you know instantly make up that loss But Here's the here's the thing You want to know what the break even is is if uh, if you have to actually sell the shares So how do you do that? You take the strike price? 55 and you add it to the cost of the option, which is 350 So $3 and 50 cents plus 55 Equals $58 and 55 cents. Let me let me bring up my sheet here we're talking about Not Choosing a strike price that will get you out of the trade below your cost basis basis The 55 calls Are trading are worth $3 and 55 cents. Here's how you find that break even You add the strike price 55 plus 350 for the option. That's 58 50 if intel ends up above $55 at expiration Which is the strike price Someone is going the call option buyer is going to make you relinquish your shares at $55 a share They will get to buy the stock at $55 a share Now which in your case if you sold it for 350 Now your break even is $58 and 50 cents when you relinquish those shares So what you ended up doing is when you bought intel at 60 But now you have to sell them At an adjusted price of $58 and 50 cents You're locking yourself into a dollar 50 loss or $150 loss regardless So you don't want to do that. You don't want to lock yourself into a loss even though someone's paying you $350 if intel rallies back above or stays above $55 You're going to have to sell your shares at $55 but add the 350 to it So you're really selling the shares at 58 50 Which is below your buy-in of $60. You don't want to do that. So how do you how do you get away from that happening? Well, make sure you choose a strike price that will get you out of the trade at least above $60 a share So let's look at the 57 and a half calls which are worth about, you know, $2 and 20 cents of contract 220 you add 220 to 57 50 That's $59 and 70 cents. That's still below your Your cost basis of $60. So you don't want to sell anything below the 57 and a half calls Let's see what the 60 calls are worth 60 calls are worth about a dollar You know a dollar 40 maybe so a dollar 40 plus 60 is 61 dollars and 40 cents So yes, that would take you out of the trade at 61 dollars and 40 cents. You'd make a dollar 40 price appreciation Now this all wouldn't this all wouldn't matter if if the the stock price of intel Keeps dropping or stays below the strike price. But if intel rallies You want to make sure when you relinquish your shares that it's above your original cost basis of $60 a share So this might sound confusing to some of you Just just remember where your original cost basis is which is $60 and choose a strike price When you and which when you add it to the cost of the option is above your cost basis for the stock because you don't want to relinquish your shares Below your original cost basis. Okay, so know your break evens when you buy when you sell the call option Know what your break even is you know where this it will take you out of the trade in this case If we when we sell the 65 calls for 55 cents That is a break even of 65 dollars and 55 cents strike price plus 55 cents is 65 dollars and 55 cents Your cost basis is 60 now you're going to sell it at 65 dollars and 55 cents You got that five dollars and 55 cents of price appreciation And that's only if intel ends up above 65 dollars at expiration. It's all depends on where the stock finishes at expiration So your goal is Well, if you want to sell the shares the and and you and if you have to sell the shares, that's fine You'll have your price appreciation if you don't want to relinquish the shares You're hoping that the stock stays below the strike price Right, okay So let's take a quick look at at how to help You know choose a strike price and an expiration date You can do that by by using the probability calculator Okay, this is on our website if you go to our website and you go look a helpful links We have a uh, you know a spot on our website called helpful links Probability calculators is the first one listed here. Here's a probability calculator So I I've defaulted I put 55 dollars and 89 cents for intel's current price I want to know what the chances are of it getting above 65 dollars The strike price by expiration in 83 days from now The future volatility is about 35 percent for intel So here's what it's telling me. There's an 81.72 chance that intel Will not go above 65 dollars at expiration Conversely, there's an 18 chance that it will go above 65 dollars at at expiration So you have to decide are you willing to give up the shares? You know, you can choose an expiration date um Of your choosing You know go through the the expiration cycles like I've shown you check the check the probability calculator 81 0.7 chance of intel not going above 65 dollars in the next 83 days. Is that a high enough opportunity for you? It's up to you. So you have to manually go through do these what-if scenarios and figure out, you know What works for you and are you willing to potentially give up your shares? Okay, so there you go. That's how it works with selling covered calls It's a great way to it's a great way to create another income stream for yourself um Make sure you choose a strike price that that would work for you if you have to give up your shares Make sure you're happy with that price And if you don't like to trade anymore you get out of it You can always buy the call option back and resell a new one at a higher expert at a higher strike price to give yourself Some more upside buffer. All right, so that's it for your your lesson on How to sell covered calls? Let's just go You know, I'll open up the the website here, you know, here's our smart option seller website If you go over to the more tab you click on the helpful links, here's the probability calculator right here I also want to talk about our put selling basics guide If you want to learn about selling put options Which is something we do more than anything else at the smart option seller Click on the put selling basics link and put in your name and email address. We'll send you a free copy We have our services always we have our two newsletters and our one-on-one coaching for anyone that's looking for more help All right, so that's it for this week. I hope this content has been good for you Give me a thumbs up. Don't forget to subscribe hit that red subscribe button Give me a thumbs up. Leave me a comment if you have some questions about covered calls what they are Send me an email. I always love hearing from you. All right. That's it for me today I hope everyone has a great weekend and a great week ahead. This is Lee Lowell signing off


Rydych chi'n gweithio'r three points here in Jolingham. What do you think after that game? I thought it was a big game. A big massive game in hand. We had to come and win. Brilliant performance. I thought we were good on transition. A wonderful, absolutely wonderful to get us the three points. A couple of great crosses from Brad. A couple of assists which he's done all season. I think he's got six now in the league so that's great for him. It was a tough game but I think we've managed the game really well. Got goals at the right time and came over the three points which that's all we're looking for. Four from back to front. We're excellent. Continued from Saturday. Obviously the fans who have come down like Miles Worth for Tuesday night and we've given them something to go on that day. You're opener as well today. Not quite the screamer that we've perhaps seen from you earlier this season but talk us through that one. Obviously I've seen Brad with a ball. I knew he was going to cross it and he was in the box. I've just got in there and managed to somehow get me ahead on it. I think the surface has helped me. It's just managed to creep in the corner. I couldn't quite believe it but it's a big turning point really because I think they were just starting to get their tails up a little bit so it was just a good break in play really to stop their momentum and obviously get us ahead. Got the assist on the first goal. Now you've got six assists in all competitions this season. Five in the league. Our top assist. How much pride do you take in putting those balls in? I think if I obviously need to congratulate Dickie on getting the goal because obviously if he's not there then I don't get it. Same throughout the season.  Most of the time people are looking to get on the end of them which is something we need to do. Going forward obviously the more assists I get the better it is for the team. When I came in that's what I wanted to do and I'm doing it. Back on the score sheet again quite a goal. Talk us through that from top to bottom. I think it was Dickie who put him behind. The centre half obviously tried to shield it out. I kept it in obviously. I got scared up with the centre half. Initially at first I thought I looked up and I was thinking do I go for the ball? I didn't know as he screwed us up but I just dropped inside and he kept coming out so I just lifted over him. Passionate scenes wouldn't be travelling support as well did you enjoy that? I love scoring every time in front of the other. They're bad for fans. It's a different class every time. Brilliant like as I say when obviously we got the goal to get behind us and they almost seen us over the line tonight. As I say it was a tough game. They were very direct and at times we had to dig deep and obviously with them getting behind as I say helping us over the line it really helps. So fair play to obviously all them that's made the trip obviously. It's not a short one. It's far so fair play. Yeah unbelievable really on a choose tonight to come. Wet, windy, cold. Not an easy place to get to. Must be in the long journey. Obviously with traffic at this time as well. And unbelievable really and really pleasing that we can put performance in like that and send them off. We were three points and for us as a team as well great momentum builder and trying to keep on pushing on, keep getting the next three points. When we talk about keep on pushing we're back at home on Saturday against Colchester United. You looking forward to that game and what your thoughts? Yeah I think we can only look forward to the next game after a performance like that. Really pleasing. Big three points, big game. But we've not been great at home this season and we need to try and put that right and we can't afford any more slip ups and all so we've got to be right on it and if we are we shouldn't have any problems but it's down to us to really do the basic well. First ball, second balls, compete, run hard, work hard and hopefully we can get some goals and three points. So hopefully we can continue like we say from where we left off tonight and hopefully get three points at home on Saturday. As I said I think we're just taking games off home by one now going forward. We need to just keep the momentum going. We need to win games, look at the next game, win that game. Obviously we're not hiding away from our home form. It's not as good as we want it to be so hopefully we can start a run on Saturday and sort of going forward from now we make it a fortress so when teams come they know that they're in for a game and it's going to be tough to come away with anything.


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