Okay, good morning everybody and welcome to the ProTrader webinar today. Okay, good morning everybody and welcome. Alright, so we got the YouTube going and over in Discord as well. Today, well this whole week we've been focusing our ProTrader webinar series that we usually do once per quarter where we have professional traders come in every day and they'll go through the way that they look at the market, what they're, how they're trading, what are their setups, and just insights from them. This has been an options focus webinar series this time and would have been really looking forward to having options millionaire here finally do an event with us and this is a perfect opportunity. So if you guys don't know who he is, well Andrew began trading 11 years ago and he became intrigued with all things related to investing. The love of helping others intertwine with accomplishing such a difficult task as trading brought him to where he is today. He's a volume profile analysis options trader with a strong emphasis on supply and demand. This is why Bookmap works so well with his trading style. He believes the best indicator is the market itself and that is music to our ears as well. He has YouTube channel here, his Twitter handle, and then also special offers from Bookmap. I'm going to post these into the chat so if you guys are interested in following up more with Andrew or some special offers that are there so you don't have to copy these down. I've got to go through the disclosures and then we'll turn it right over to options millionaire. General disclosure, all Bookmap limited materials, information, and presentations are for educational purposes only and should not be considered specific investment advice nor recommendations. The risk disclosure, trading futures, equities, and digital currencies involves substantial risk of loss and is not suitable for all investors. This performance is not necessarily indicative of future results. With all of that said, let's turn it over to Andrew and let him get started here. Go for it. Good morning. Good morning. Yes. Again, my name is Andrew. With the options of millionaire community, I appreciate the opportunity to come out. I'm always thrilled to work with Bookmap because for me, I am very selective with what I am introducing to my system. I'm someone who definitely believes that the market itself is the best indicator, is the best way to manage your positions as well as sentiment in the market. When I found Bookmap, it fit right perfectly into my system because it provides the liquidity tracker with order flow and it's beautifully set up. Again, yes, I'm a volume price analysis trader, which just basically means that I monitor the price action in the market relative to the volume and I'll watch the inflows of outflows of volume and the relative to the price action to tell me sentiment. It gives me confidence in a particular trade when to enter, when to exit and obviously tying in Bookmap with liquidity is a perfect, perfect drop in and tie in to be able to do that. Again, I'm thrilled to be here, thrilled to speak with you all and obviously work with Bruce and now there are others at Bookmap, so it's a beautiful morning. So yes, yesterday, obviously everyone really saw that the FOMC and the effects on the FOMC and the pure volatility of the market and to be able to track the highs and lows of that volatility is crucial and I think it's something we all strive for as options traders or investors in general. How do we make heads or tails of volatility like yesterday and to be able to one, do the analysis on that price action volume can tell you exactly when's and why's, whereas a lot of people focus a lot on indicators that the indicators don't tell you the why's, it just tells you the what's from 15, 20 minutes ago. So basically yesterday, the volatility was beautiful in a response to obviously the FOMC coming out and hiking 75 and then today we've got the follow up. And basically what I'm looking for today is the response to how the bulls are going to defend yesterday's key levels. 3,800 was a massive level. If you are looking at the stream, one of the things that's unique to my system is that I provide SR levels, support and resistance levels to the community on the daily and they provide a little insight to pivots in the market, where the market tends to bounce, where the market tends to reject and we do that on the daily scale as well as the weekly slash monthly scale. And they provide great insight to where the market likes to consolidate, reject and bounce. So obviously today you see the main level S3, which I'm kind of looking at on the stream here. This level, you can see there's indicated by a little bit of plus sign and obviously it's a little bit brighter than the other levels. That indicates that that's a particularly strong level. And funnily enough here is that there's also correlated with book map here where there's a lot of liquidity posted here at 3,700 even down to 3,767 and 3,760. And then of course we've been tracking this level for the past week, this 3,750 level, which has only gotten bigger and bigger and bigger. So they're providing a lot of interest and a lot of more, a lot more liquidity at this 3,750 level. In fact, it was like 400 and something and now it's gone up to 800. And then now of course we see 1776 that is just getting larger and larger. So one of the ways I kind of drop in managing book map into my system is not necessarily only the levels of book map, but it's how the liquidity is managed and that tells me a load of value right there is that not only are they putting liquidity at certain levels, but how are they managing liquidity? Is it being taken off? Is it being added? If there's a lot more liquidity lower or higher, are they going to manage the liquidity up and down? And how the larger money ladages of liquidity is going to try to tell me something in the sentiment of the market. And if I can catch on to that and kind of ride their coattails, it's going to give me a great confidence trade. And that's basically what I'm trying to do today is monitor all this stuff. And obviously out of the gate, I was notating, I spent a few minutes in my server before heading over here. We were notating that most liquidity was posted substantially lower, even down to 3,750. There was a lot of block orders to the south. The CVD was inherently red. You see here even the CVD is still incredibly red. And everything was posted much lower. We had a little bit of liquidity posted higher. So for me, the SKU was definitely to the south. And in coordination with that as well, we did see that pre-market lows was way down to the 3,776 level. And when I'm tracking the yesterday, the prior day's lows and the overnight lows, which is down, I think, ES printed overnight lows of 3,767. So when I'm seeing the pre-market lows down to 3,767, I'm going to be looking for, especially when the liquidity is posted lower, I'm going to be looking for maybe an early test of that 3,760 level to kind of wipe out the order book down for the pre-market. And then from there, to me, it's a waiting game. How are the bulls going to defend after yesterday? Are they going to defend at that pre-market level or is this going to be another continuation down into the accumulation phase? So the big money can transact this lower and start accumulating at a lower price. So that's what I'm looking for today, is how are the buyers going to start defending at these key pivot levels lower so they can start accumulation, accumulation phase to start bidding the market back up. And we don't know if that's going to be today or if that's going to be later on. The fact that they did breach through many, many significant levels yesterday can tell me that there's a good chance that we could transact this lower before we start to enter that phase of bringing it back up. And then, of course, if that happens, we're toying with 52 week lows, which most likely will enter some sort of consolidation phase around that area. But overall, today for me, I am looking for just watching. How are they going to defend at these particular levels and try to take advantage of those moves when I see that? Obviously, right now we have got it is now 10.08. So we are what, 38 minutes into the market here. Usually about now is when we start to carve out the morning highs and lows of the day and I'm starting to try to play against those things. Obviously, if you see that we're kind of pinned to my S3 level, which is a significant level. So I am looking to see are the bulls going to be able to transact this back up? Bring it back to book map here. Still, they've got this 38.20 level, which they put on a little bit after open. You can come back here and see that they started putting this a little bit after open they threw on some 38.20 here. And then, of course, other than that, everything is still very much lower, including this 37.50. Of course, I'm going to zoom in a little bit here and then the 37.70, which is just below where we currently kind of bounced here with the with the bulls coming back in. So, you know, usually I don't take too too many trades the first 20 to 30 minutes of day normally because I want to let the market kind of tell me where it wants to bounce and where it wants to reject. And I most of the time I find that if I can remain patient in that 20 to 30 minute range, I can usually put on a good high confidence trade in the later half of the morning to take advantage and exploit what the market is telling me, which is where the liquidity is and where the highs and lows are. If you can let the market, if you could be patient enough to let the market tell you where those are, then you can exploit those. You can exploit the highs and exploit the lows, at least for a good high confidence scalp, if not into a longer day trade if we are fortunate enough to get a trend up or a trend down. So, beautiful stuff. You know, that's that's this may it's a dance between volume. Where are the volume? When's the volume going to come in? When's the volume going to leave? Where's the price action going to bounce? So right now, for example, we have some buyers interest off of S4. We're coming back on to S3 again, which is our key level here. We came down to 3770, which if you see on book map, we couldn't quite transact it. I'll see and I saw them wipe out 3775 here. They had some icebergs come in.  The CVD was very, very red and it's still red, but not quite as as bearish looking, but they weren't able to quite come down to transact 3770, which was interesting for me because, you know, I'm looking to see if this orderful will actually be able to be to come down here and then go on that, maybe possibly a stop run or maybe a liquidity grab down there, but the way they were not able to do that. So if we do come on down, I'll be watching for 3770 to see if they're going to pin and absorb, or if we're going to bounce back up for maybe possibly a double bottom scenario and then maybe even come back up to S2 or S1, which is roughly about where we open for the day. So we're coming up on that decision time here. That was obviously a little bit of bounce off the low of the day. 3766, which is ES and of course, I track ES for the main bread and butter of the market. Obviously, what you're looking here on the YouTube stream is SPY. You got SPY on top, NASDAQ in the middle, and then VIX on the bottom, which is, you know, CSPY, NASDAQ and VIX. But from a overall volume standpoint, I am tracking ES as well because ES to me is what you want to be looking at for the larger players. In fact, that's why I'm watching, that's why I track ES on bookmap instead of SPY or other things. Because that's going to tell me what the big players are doing. They're going to monitor their hedges with ES, as well as be able to manage the big, big liquidity on ES. So that's that's primarily why I track ES. So right now, it does look like we're going to come down for another test of the day's lows, at least getting close to it, which is what 3780 and then the low of the day right now is pinned at 3772. And we'll see how we react when we come down there. And that's going to be like if I see maybe some sort of bottom wicks with the influx of buy volume there, which indicates the sellers are kind of exhausted here, we may have a refresh back up to high of the day. And that's what I want to try to exploit is this lower level right here. Do I think we'll transact 3750 today? I couldn't I don't know right now from it looks like there's a decent probability with that amount of liquidity down there, but it really all depends on how they deal with pre market lows. And that's kind of for me, that's a line in the sand for me, if we can transact below the pre market lows for ES not SPY by the way for ES because ES takes in the entire night. If we can transact through the pre market lows, and that's a high probability will at least bid down to 3750. So that's pretty much the first line in the sand so to speak that I'm looking for 376675 on ES if we can close rough, probably a five minute candle below that, then I will be looking for a move down to 3750 at some point in time. But it's got to make that move here in the next I would probably say three three minute cycles about nine minutes. For me to be high confidence that we're going to put in 3750. But until then, right now we're kind of figuring out here where we're right now we're doing price discovery here at the S3 to see if we can negotiate the price higher and lower right now the buyers and sellers are duking out that they're trying to figure out is S3 market value or not. And so far the bulls are trying to win this thing back up. So coming back we've got 3790 which is next liquidity here on bookmap 16 points up. We've got a little bit of green here coming up 3787. The three charts on the right. What you're seeing here is SPY is on top. You've got NASDAQ in the middle and the VIX on the bottom that allows me to monitor both the S&P and the tech sector NASDAQ sector as well. So those are a dance they intertwine together right there. So we got up here off S3. Once we broke up here off of S3, I am taking a 3790 call here on SPX off of this bounce off S3 right here. And basically what I'm doing with this particular position is I'm looking to see if we can even take out breach or even tap on S2 which is just above us here on SPY. So with this particular call which I'm not looking to get too much out of here I'm just trying to play the volatility as the upside as we break off S3. Can we get through S2 and then of course if we could break S2 and go to S1 this would be a nice little win for me right here to see how strong we can get. Obviously notice that you're not you don't hear me talk too much about the EMAs. I do have the EMAs on my chart but you notice that I'm not talking too much about those just because that's that's kind of a back end indicator for me that I really only pay attention to on trend days. So coming up to the 34 here that for me already is a pretty good win on that one big green candle here. And I'm going to go ahead and take some of these profits off which is something I normally I normally do. I don't usually let positions run the entirety of the position size. I usually scale out of positions to get me to keep to lock in profits and take and maintain profitability. So so if there's that first touch right there off of S2 you notice who came up and touch S2 and now we've got that first little retracement off of that back on down. So now you know that one touch S2 rejection and if you look at book map which is right here if you look at book map here we did have this nice touch of 3790 which is right at S2 they look they grabbed that liquidity and now we're kind of coming off here. They still have 3770 on and when we make a move like this what I like to look for is how are they going to manage this liquidity now that we've especially now that we've transacted 3795 or close to it are they going to add more liquidity back up and bring this continually higher or is that pretty much it for the bulls that was just a little pop up maybe some short covering and then we come off down. So this this candle is particularly important on the three minute chart here because this is going to tell me the true sentiment of the bulls what are they planning on doing after this particular candle. So and here it is right there big old bottom wick so it tells me you're there there's still there's still some interest there. The CVD is coming more and more neutral as we get a little bit higher and we got 3797 right there. So right now 3820 continues to grow a little bit larger there and they're adding this little bit of order flow into the into the book up here to 3800 which 3800 you know the 00 levels are usually always have something some sort of interest that you know the the computers the traders love the 00 levels you know 3800 3700 3900 so there's always some sort of liquidity there so what I'm seeing that obviously the 3800 usually is always those levels always tend to be a good resistance or support when I look at those how are they going to manage those as well they're going to continue to manage that liquidity throughout the day or is that going to be a stagnant stagnant level pre-market highs would be good that'd be that would be a considerable run by the bulls that's that would be nearly 50 points if we could get up to pre-market highs so that would be a heck of a run here I closed out about half that position size there so just to you know grab in profits roughly 15 20% and so that you know once again that's I think that's a smart move just a side note I think it's a smart move anytime you take a position to remove some of that risk off the bat to one pay for the trade control your emotions a little bit better and main share you can hold that position a little bit more accurately through the rest of that trade so still holding this S2 rejection right there NASDAQ is also coming off here looking at the NASDAQ percentages here NASDAQ is a little bit more heavy than the S&P today so NASDAQ is down about 0.9 and then S&P is down about 0.5 so there's about a almost a half percent diverse 0.4 their percent for divergence there which is probably contributed to XLV and XLF the financial sector and the health care sector are both pretty green relative to everything else a little bit more strong so it's causing a little bit higher prices in the S&P than the NASDAQ so the reason why I kind of track that divergence between the S&P the NASDAQ is because I love to see usually when we get a big strong trend move the markets are pretty correlated everything is kind of dropping and bouncing together when we get those strong trend days so I want to look to see if there's any anyone that's kind of leading the other and today the NASDAQ is leading more heavy than the S&P so what do we got here still maintaining this 8 EMA right here above S3 not too much movement so far here we have a little bit of bounce off 37.73 up to 37.94 which is a 21 point move until then we're kind of figuring out right here at the 8 in terms of book map here 37.50 continues to be a large level a large level then of course we've got 37.70 there so we're kind of in this open ether right here where there's still a lot of liquidity a lot of roadblocks down here but the main stuff is definitely lower a lot of orders are definitely spread out here and of course this is what coming on after yesterday you know obviously we're in a higher liquidity environment today and yesterday then we have been in a couple of weeks you know we went through a couple of days where the order book was pretty light the price was pretty choppy we'd have some big breakout moves and then you know three four hours of chop so from here you know this we're in a high liquidity environment relative to yesterday today as the book tries to digest what happened yesterday and figure out if we need to transact lower and you know the great thing about tracking volume is that we don't know where the big where the big players want to go we don't know what levels they want to start their shake out phase where they want to start bid the market back up but we have to watch the volume the price action to determine exactly when that is they know it we don't and right now it still seems like they want to transact this lower based on the price action we're seeing unless we get a decent bottom wick with some volume on the daily chart if I can see the buyers come in and kind of v recover this thing into the last half of the day then I'd be looking for maybe a maybe a move higher tomorrow or maybe just another consolidation date into tomorrow so we have a question here um which actually I was uh wanted to ask as well about uh you know your decisions on on strike prices deltas etc like uh just kind of in brief like I know we you know I know you went long uh with your call but uh how do you kind of choose your options yeah great question uh great question so you know over the course of years I've kind of refined my process where I kind of based all my decisions based on a certain delta you know I I've experimented with many different especially with day trading and scalping I've experimented with many different items like uh you know five dte all the way down to zero dte and usually you know before all the volatility crazy kickoff of 2021 and 22 I was looking at the ballpark of about 0.35 to 0.4 delta which put me in the ballpark on a you know 2d to e to zero anywhere between 10 to 20 points uh outside the money on spx and that was a good risk reward for me and some you know some people is different some people want to be a little more conservative play in the money contracts they want to play longer expirations which is you know obviously an individual preference but that put me in the ballpark of risk return it put me a little bit outside the money where if I caught a good 10 point 30 point swing on it on the on the index that it would give me a great return um where the in the money didn't quite pay as well so uh yeah the deltas is something I look at right now I've kind of refined the process so much that I don't even I don't even look at the deltas now when I'm looking I'm just looking at the ballpark of 10 to 15 points outside the money when I'm taking a transaction uh the little later in the day is when I start pulling that back a little bit I start going closer to the money or at the money or even in the money in the later half the day just take off risk and then of course I start extending my expirations into one two three dte now that's just basically the scalping stuff for the longer term stuff like the three week maybe to the month and a half stuff swing stuff that I trade uh I tried you know the the common term that I talk about is I want to take a strike that's realistic but aggressive so when a lot of people talk about taking a swing position you know for if they're expecting let's say a 500 point drop if we're let's say it if we're at 4 000 and someone's expecting the market to go to 3500 by november which is a 500 point move I don't want to take a put with a 3500 strike I want to take something that the market has a reasonable chance of getting in the money and then actually building a position into the money so you could take advantage of the gamma spike which is you know I I I notated as aggressive yet realistic so and to me that's really the only way I can figure that out is based on current pivot levels and the analysis I do on the charts if that's going to tell me well the market could get the 3500 by november but I want to take something that's a little bit higher maybe 3700 that's halfway in between where we can get that big gamma spike which is precisely what I did back in June that paid an enormous amount just because the position was actually be able to go in the money and then about 200 points into the money which paid well so my thesis on choosing strikes is different based on the based on the day trades and the longer term stuff so it's it's primarily delta driven on the shorter term stuff and the longer term stuff is really based on analysis on the charts so and then how far out do you go on the uh uh longer term longer term stuff normally uh if I'm doing about two to three week charts I'd like to stay in the ball park of about 100 points in this environment of course 2022 is different uh we're getting frequent you know 100 400 point swing so I'm being a little more aggressive in 2022 in a normal environment it's a lot closer maybe 50 60 points in a normal environment for a swing trade that's primarily farther out but you know in this environment here I'm like I'm finding myself going the ball park of about 100 to 200 points back in June I went 500 points out and I caught it just at the right time and we made we made a killing but again you know I'm being a little I'm taking advantage you know I like to make hay while the sun shining in 2022 the sun shining in terms of volatility uh in my opinion 2022 has been an absolute feast for option traders like this is as good as it gets in terms of volatility because we like to take advantage of volatility as long as your timing is correct of course so I take I'm being a little more aggressive with my strikes this year and I'm taking stuff that's a little further outside the money for swing place because if you can catch a run then you can make some good money interesting so and then what about in in terms of calendar calendar so I find most of the stuff I've been taking is about a month out I would say the the the highest number of swing trades I'm taking is about four weeks out four to five weeks because that that that's able me to with with the market cycling at about a five week period it's very difficult to hold a swing trade longer than a strike that's that far out because we're getting 500 point sell offs and 500 point buy ups and that's just the nature of a bear market we keep getting the bear market rallies as we oscillate between accumulation and distribution so for me personally you know I'd like to in this environment I'm trying to keep all my strikes within about a four to five week range so I could plan those cycles and then once we kind of break out of that or we enter back into a bull market then I'm going to start building in more six month positions five month positions maybe even some longer leaps I see so you're playing the volatility like that and the swings are the swing trading then you're really only looking for holding for like a few days or so absolutely yes absolutely absolutely so you know for me you know the I am really trying to focus on identifying the accumulation of distribution phases of the market and they're starting to happen faster and faster usually we get it we usually you know because accumulation distribution if we're not familiar with vp accumulation distribution is the break between accumulation which is where large players want to accumulate shares lower so they could start to bid the market up and transact them and execute them higher or distribute them to other players at a higher price and that cycle usually you get you know a big sell-off and then you get about you know in seven to ten trading sessions of consolidation or shake out phase and then they bid the market back up and they transact those prices higher well starting to become faster and faster with the volatility especially as we get closer to quantitative tightening and rate hikes in the economy and the recession those cycles are starting having faster and faster so we have to start planning those swing trades a lot quicker whereas normally I'm trying to enter those swing trades at the last half of the shake out phase now we're trying to be like all right well like we only had this prior before FOMC we only had like three days of consolidation before this big move down so you got to plan those things a lot quicker which requires a lot more emphasis on trading analysis on the charts and then obviously planning our entries because was as we all know with options trading timing is everything okay okay great so let's see David did we answer all your questions there there's anything more that in details here since we've we've got options millionaire right here I was kind of wondering about so so the day trading you're also is it basically the current month that you're also looking for like four or five weeks out or something like that or is it you know what's the calendar on the day trades yeah so the day trades I've like again you know 2022 I'm trading differently than I have been just because I'm being more aggressive so primarily now I am scalping zero DTE trades and then for the later half the days when I take longer trades I'm going a little bit longer on those DTs but primarily now I'm scalping or day trading the zeros but I try to be one it's my position sizing also is changing which is a big tenet of my system is that the more aggressive I am with the zeros the zero DTs and scalping that lower my position sizing or I don't I don't do large positions sizing is then of course the more confidence longer term stuff is why my position sizing goes up but in terms of zeros yeah the scalping is usually zeros one DTE is depending on you know the ticker I'm trading sometimes it's you know Apple Amazon and Microsoft and most of the time though it's the S&P okay excellent excellent and then just kind of curious about how you're managing your this current position here this current position here I am watching S3 S3 is a significant level obviously and that's my line in the sand you know I've took profits on half the position up at S2 which was for me you know I'm paying for that trade so basically now I've got a risk-off trade for the last half and it allows me to be a little more patient here off of off of S3 so if I can get this thing to bounce off S3 and maybe even head up to S1 which if you're looking on my chart would be roughly a point and a half on S&P on the SPY as well as what I'm seeing here on book map here is we got a little bit of equity back at 3790 which is also kind of where we rejected that would put me in a good position to take some profits here and of course we're bidding back up to S3 but if you know really highlighting position size management here is that when I took the initial trade you know I was fortunate enough to get a good run I closed out half and that does two things you know it releases a lot of pressure on my emotions to manage the trade if this does break down like it did three candles and two it allows me to hold the position into profitability because you manage a position differently when you're profitable than you do when you're in the loss in the loss so allowing this position to maintain profitability allows me to be a little bit more headstrong and calm when I'm managing those three candles so when I see those three red candles show up a couple of minutes ago I'm like all right well I've got half the trade left if S3 breaks and closes below then I'm probably going to look at exiting that trade which probably would have been a loss on the last half but it pretty almost had washed on the overall position fortunately enough here I'm able to be patient enough to see a couple of bounces here we're back in a profitability and I'm looking to see if we can carry this up to S2 and if we do break down and have a double test of S3 I'll probably just go and execute the sale of the entire position but that you know that's pretty much it you know my my whole strategy on the day trading stuff and of course these different strategies for different positions but my trade my day trade strategy and my scalping strategy is playing level to level it's monitoring the liquidity in the book map to kind of tie in to my SR level so I can identify levels at which to play at play calls low and puts high obviously that's what I'm looking to do and what the SR levels allow me to do what book map allows me to do is identify levels of interest whether it be supply or demand so I can make sure I want to be taking calls on on on demand and and and puts on supply because you know a lot of people try to try to play breakout trades or breakdown trades and those trades fail about 80% of the time is when you try to get a breakout you actually do maybe get a candle a breakout and then it reverses into that supply zone it comes back down or bounces off demand it comes back up and that's what we're really looking for as they will identify those zones where I could pivot off of and really exploit those areas so that's that's a great insight there I mean like I'm wondering also too so I mean are you I mean with with options with that you know a zero DTE I mean are you looking at some of the Greeks in there or that you know implied volatility or anything like this or you I mean because it just seems like such a natural thing once it starts to hit and some of that high liquidity a lot of people don't see that and that's where you're going to get an advantage yes in terms of planning a lot of the Greek analysis for me comes into the pre-market because when I sit down on my computer every morning I start doing my not market analysis one of the first things I open up is a blank ES chart and the options chain and I start to dig into the Greeks I started to look at one mainly the implied volatility all the implied volatility is not I guess technically a Greek I feel I still think it's incredibly important especially in this market where you know pals coming out and talking and CPI and all the other stuff we saw I mean we saw you know IV go up to like almost 150% yesterday but I saw the bottom like by there by all of us three by the way so you know the Greeks I pay attention to theta a lot in delta those are the two main ones I'm talking I really look forward to and I think it's more important to understand like gamma levels because you know gamma is such a huge part of gamma is such a huge part of us as options traders and what happens especially when you go on the money I think it's very important to understand but in terms of values the implied volatility of the delta that to the two I'm looking at because obviously the deltas we can kind of look at how the market is positioned and how the market how the sentiment the market really is positioned whether or not you think well we're the market's pricing going to move higher or the market is pricing and move lower because if we think about options in general what are options you know options are insurance their options are intended to to their derivatives they're intended to hedge other positions for big money standpoint because we have to think about how the big money plays options all right we got to move up to 34 here so what I'm just a little side note here if we come up to s2 I'll probably look at a leader either scaling out another port of position or closing the position altogether based on the weakness of the buyers here but that was a good influx of buy volume some decent price action bottom week off s3 which is pretty bullish and coming up to s2 so so yeah the delta and the implied volatility in my opinion are the two most important data points on the options chain when I'm doing those type of calls or those type of positions okay and that's all pre-market but then it is once you've got that all set up you basically know what you're going to be trading and then just you're looking to to aggressively get in precisely yeah precisely and then if I see a big if I see a big volatile event come on maybe like a news event drops or something like that something we didn't necessarily anticipate I'll go back into the chain and I'll start doing a little more analysis and figure out how it's going to adapt the order flow how it's going to adapt the IV for example yesterday I was I was heavily dependent on looking at the IV managing positions with that huge move because I want to see when did they start you can really identify when the real move is being made in the market when they when IV starts coming off so for like yesterday the IV was still jacked until you know Jay Powell pretty much stopped talking and then IV went from like a hundred thirty eight percent and just smashed so you can identify when the quote unquote real move is being made by managing by just monitoring implied volatility that's that's fascinating so what yeah one of my channels literally throughout the day I was I was I was posting updates on implied volatility just to really highlight how that happens you know 41 percent 57 percent 97 102 percent and went up and up and up and up and then it maintained throughout his speech and then it started coming off a little bit and then once he stopped talking IV smashed and then we made that like 120 point move down from the day's highest I mean do you ever I mean like like you said it's all timing here and then but maybe you get caught up in kind of a distribution or accumulation pattern and you know maybe your IV or your delta reading was fine but the theta starts to you know you get your time decay how do you kind of balance that out yeah so obviously theta is our worst enemy of options buying obviously you know selling is a different story but options buying theta is a big one so you know I have I try to work in cycles you know I monitor the three minute five minute 15 minute chart primarily on the day trading and even go up to the 30 minute my opinion 30 minutes my favorite chart to to trade off of and monitor but when I'm on the charts and I can identify when we start entering into the consolidation zones that's when I really want to hold positions quickly or exit commissions quickly I don't want to hold through a lot of short-term options expirations through that consolidation because I want my delta to basically I want my delta to overcome my theta obviously so when I start to see those data values start to really juice up especially in the later half to the days I'm not interested in being in a position too long or even trading that in general for me you know I'm trying to hit big trades three or four times a quarter or three or maybe even three or four times a month and then pretty much everything else is just you know onesies and twosies small stuff that's that's what I'm trying to do so if I see a low confidence area like a consolidation in between the moves and theta is starting to get jacked and we're starting to really degrade the positions it's not something I necessarily want to be aware of be involved in because that is a low probability and it's all about managing probabilities at option traders instead of fighting the chop instant fighting the consolidation I want to hold off until I see a big move like yesterday and everyone everyone who's in my server and follows me knows that I get very excited for CPI and FOMC because it's if you know how to position yourself properly I mean it's like the Super Bowl for option traders it's the best way to make money to even make a month goal in one day playing conservatively even so when I see those areas of consolidation I automatically back off I kind of step back and like well do I need to be trading this consolidation to what I'm looking at the theta values or theta is theta overcoming all the deltas just because the delta decay just because of what we have here on the consolidation of the market so yeah theta is very important it's you know to especially understanding how to manage theta and how to interpret what happens what happens as we get closer to the end of the day if especially if we're in a consolidation phase because you know the most aggravating part about options trading is that you can be right on your on your analysis and still lose money because the position doesn't move fast enough to overcome that theta value right it's just maddening about options the underlying move the correct way everything moved and you still lose money on it oh yeah yeah yeah I'm just wondering then like how so so you're watching the two for the for the day and maybe maybe you will kind of would you consider like exiting a position just because that the theta is starting in a consolidation period or you know maybe this revolves more around your holding time for the day trading yes so you know when I when I execute a position or enter a trade I a basically form a thesis and I dry I draw lines in the sand and you know I tell myself well if it breaks down below here I'm out I don't care when I'm when I'm scalping your day trading you know I'm looking at a certain I'm basically my entries and exits based on the charts rather than like kind of like my P and L like I don't want to say where I have 10% loss I'm out because you're going to get chopped up you're going to take a ton of losses doing that because you know a shorter dated option goes 10% loss all the time so I want to take my trades based on the lines on the chart based on all right well if it breaks like for this example if it breaks down below S3 I want to close out and then I'm going to manage a position upwards if we break up to S2 and then that allows me to really look at something now the second variable I need to tie into that is time I'm going to give myself a time where like right now for example I'm not going to hold this particular call two o'clock if we're going to sit here and chop between S2 and S3 because the position will get destroyed so I'm going to give myself a couple of cycles because the market works in cycles in terms of time cycles so on the three minute chart I'll probably give this to roughly probably 1045 and then if I don't if I don't have a move made above S2 or S3 I'm going to go ahead and close out the position because then the move on a zero DT option has to move so far in order to become profitable that the odds start stacking against me and that's all it is managing the odds what are the odds that I'm going to be able to break up because you know the longer we sit here at 3784 and ES the higher and higher my break even point on the remainder of the trade gets because of theta so and how what does that mean for my probabilities you know that that that doesn't bode well for profitability so I usually give myself two areas of criteria to exit and enter one levels high and low where I'm going to say right well if if and statement if it breaks below I'm exiting if it goes over I'm going to scale out or manage and then the second variable is time at what time am I going to get out now there's sometimes that time is a little bit shorter or longer depending on how aggressive theta is on the particular day if theta is just is if it's a tough theta day or if we're in the last half of the day for example where theta really starts eating out positions then I'm going to look at well I need to give it less time I need to you know I'm not going to let this position breathe too long because theta is going to be too aggressive anyone who's traded zero DT contracts in the last hour of the day which in my opinion is pretty much gambling knows how aggressive theta can actually be that's why you don't do that stuff in the later half of the day you only do that earlier on in the day but managing the theta and understanding theta is a huge point which I think if you're going to be an option trader you need to become well versed in both the management of theta and delta to understand how to manage your positions yeah I mean that just really adds another complexity to the trading here tremendous so yeah now your exit criteria is not just based on price yep absolutely absolutely so you know I try to make it habit of not to execute trades based on my P&L or based on the price of the premiums because that's going to put me in a position of chasing my P&L and when you start doing that people freak out when they see their P&L go red and although all you have to do is you know wait out a little bit be a little patient let the price action go and you could be right you're just you're a little too impatient you're closing out for 10% loss which sometimes you need to do that but I'm personally trying to manage my positions based on what I'm seeing with the data you know if I enter a call here and this thing starts getting super bearish if the flow starts getting bearish which is looking like it might I want to exit a position based on I don't want to exit just because I'm you know just because I'm you know 10% loss or 5% loss of my P&L so so then how do you manage like a you know you're kind of account management or or trade management in terms of in terms of P&L well for me personally obviously you want to it's really buying it's playing level love for me obviously like when I my P&L really comes into scaling out of trades so for me I want to always scale I very rarely do I take a trade and hold the entire position into like maybe 100% profit let's say I'm always always always scaling out and that puts me in a position of being safe and because I want to drive consistently consistency to me is the number one priority if I can if I'm not consistent then I'm not going to be able to to generate profits so in order to be consistent I need to be able to manage position and especially even scaling out that's why I always scale out on upsides that's why on the downsides I'm setting a line in the sand where like if we close under S3 for like in this example I'm closing out the position like I'm pretty much about to do XLF is starting to break down here so if we close this candle here I'll actually get the rest of the trade just a massive iceberg there yeah yeah 2551 colossal colossal so and the reason why because that pretty much does the work for me on my P&L because if I'm sitting or watching my P&L like a hawk and saying alright well if we break 10% rent I'm closing what that does is it removes your chart analysis because you could be exiting a call here right before we get a big bounce and you're like well I just sold a call right before it bounced well you know it's because you weren't you know you're bought you're selling your position you might have just an unfortunate 10 minute early entry where you were just you know we're about to bounce off demand and go higher so yes I do watch my P&L but it's I'm not necessarily making my decision based strictly because I'm like down print 10% or something now understood just a lot of lot of moving pieces here oh yeah oh yeah yeah seriously we're here we're you know this S3 here we're holding it all morning along we came down and touched it slight breach below and we're just been pinned right above our S3 all day which is on SPY with 37506 and most liquidity is still very much lower here so that was a massive I saw a very large iceberg a couple of days ago that we notated that was very very large and I'm starting to see more of those you know as a volatility ticks up I'm starting to see more and more of these icebergs and larger stops as we get deeper into this volatility all right so we got XLF just broached the breach they're low of the day which is the financial sector of the S&P Google looks like it's kind of fiddling out here at their highs of the day and everything else is pretty much flat and chopping Tesla's getting destroyed today if you notice Tesla's down man Tesla's really getting destroyed Tesla's down 3% on the day they're down to 291 and continuing to fall which is they're 12 points off their high of the day so a little bit of red is definitely starting to creep more and more in here I'm curious to see how Google's going to react and XLF which is the financial sector is going to react here as they're kind of putting a new low of the day because you know for me I monitor 10 different sectors of the S&P if you notice on the screen there to the right I've got sectors of SPY on the on the YouTube and I've got them in order of highest to lowest allocation for the S&P and that allows me to pretty much do a litmus test of the market so if I see the S&P making a move I want to click through those X sectors to figure out which ones are doing it the largest players of S&P moving or are they not and that allows me to develop confidence in a particular up or down move of the S&P so like for right now I'm monitoring XLF on another chart that you can't see and they just put a low of the day in and promptly we've had this little green candle of S3 so I just I want to monitor that if XLF continues to sell off it's going to be difficult for the S&P to climb back up because one of their sectors of main sectors financial sector the banks are getting destroyed and that's what I want to monitor so I mean so it appears like all in with the position and then scaling out yes yeah so I very rarely hold an entire position the entirety of the trade I'm always always scaling out I think it's a good practice you know sometimes most of the time that first trade my intent hold me I'm about to execute the remainder of this trade my intent for a scale out is to pay for the trade to take risk off the table and allow me to hold the remainder of the trade and sometimes I get you know to 300% sometimes it's 60% sometimes it turns into a loss on the remainder of the trade either way it allows me to lock in profits and basically take risk off and have a risk-free trade for the remainder of the trade so but yeah always scale out for me you know it's it's it's always something I think it's a good practice to somebody developed started doing a while ago and it's a good driver of consistency that's because one of the what go ahead sorry yeah one of the more common questions I get is how do you hold a position to 100% like I always take profits way too quick I was like well yeah because you're dealing with your emotions and to me emotions are the most important part of all of this how do you manage when you're in the trade and your heart's beating fast and you see that big green spike if you're in a call and it's like how do you manage a trade do 200% and there's no real answer there's no real good answer obviously you could do some technical analysis on well you know it doesn't go up but sometimes that fails and comes back down but the real answer is you know you got to start managing the position in a smart way to remove that emotion and I you know the best answer I found is just to scale out take profits off early leave half the position on for 200% or leave a quarter position on you're still getting great money you're still making a great trade and you're also you're able to manage the position more clearly instead of freaking out all the time and think well this position could reverse and I'll lose all my money so you know managing the position managing your emotions I think is just as if not more way more important than knowing the date of the market too so I mean do you ever I mean since you're managing it off of the chart which is great you know it keeps the emotions low but but how do you know like well you know my overall for example might be at a loss right now even though I've scaled out yeah yeah so I still monitor that stuff I just try to to make sure I'm not making necessarily decisions based on that obviously if I you know obviously that comes with experience too and if I see a position really starting to degrade into my profits I want to look for why is that happening I want to look for the why and if I don't know a why then I'm probably going to get out or if I see all right well yes I'm going to call but things are still looking significantly bearish then I probably want to get out and that allows me and I'm still tracking my P&L I'm still watching things if I hit my daily goal I'm more apt to close out positions just so I can secure that number and then kind of like take hands off for the day and go smaller position sizing but it's really about managing that stuff once the position is closed or once things are really kind of screaming out of the charts for me that's a it's a great way to manage your your emotions there yeah yeah I'm a big proponent of emotions you know I have a podcast that I talk a lot about basically that side of thing you know YouTube channel is is reserved for like the technical academic educational stuff and my podcast is made for managing the mental side of investing in emotions and financial independence and that's a huge part is like it's people talk don't really talk that much about managing the emotional side of trades and how to really stay calm in a good or a bad trade to kind of see with the market for what it's really doing yeah great great stuff David was asked I think you I answered this but the in the monies do you also go in the monies for the zero day I do I do I do so the later in the day we go I start going closer and closer to the money or if my confidence in a position is not really where it should be I'll go closer to the money if not in the money especially if I if I elect to do zeros in the last hour or two of the day which is very very rare I'll go I'll go in the money then after that obviously their next their next option would be go to extend the expirations so you got to be very like you got to be very delicate playing zeros on the last half of the day and I try to do everything I can to mitigate risk for that or just absolutely or even then extending my expirations okay and then also do you ever add to a position rarely rarely yeah that's something that I really have to have good confidence because averaging down on a position on options is a good it's a bad habit to get into it's a good way to kind of kind of kind of record position whereas sometimes it's definitely appropriate and it would work out in your benefit but averaging down on it I'll average down on a stock all day long but on an option it's difficult because you know obviously you know option if expires outside the money it's either you lose everything so you got to be very delicate with with with doing that for me okay excellent so high probability move is what you're looking for and then just managing it absolutely yep yep high probability that's what I'm trying to do is you know that my position sizing adjusts with a high probability more high probability set up by C the the larger position size I'll take and vice versa and that how that probability is based on a confidence in a pivot or even the levels of bookmap you know how how much liquidity are we dealing with is there a high liquidity environment do I have a strong level we're necessarily playing at which allows me to drive my confidence understood excellent man we got 37 that's a large got large liquidity popping up here even down to 30 of 760 so what I'm seeing here is that they're matters in those liquidity lower you see this 3775 that they're kind of grinding up on it now we've got this 3760 which is being managed and they continue to add this 3750 level which like I said that's been on my radar for about a week now so with like when we before FOMC kind of kicked off and we were still at higher prices we notated this 3750 level and we're thinking like well is this their target is this what we're looking for after FOMC and that's why we saw this big move down and you know obviously the past 24 hours and look man that that seems to be their target because we saw that liquidity being put on and for me I get pretty excited when I see book maps start to really shine its light on a particular area you know we have large ranges of liquidity being put on that's maybe out far outside the money that starts to get my heartbeat you know my heart racing a little bit so I'm like all right well is this market ready to make a move or break out of consolidation break down or break up so I'd love to see when they're starting actively managing liquidity that's far away from these strikes because it gives a good area a good indication of where this thing might go yeah that's great I mean that's yeah I always feel like having access to liquidity is such an edge oh absolutely yeah it's it's in complete edge and not I'm very selective with the tools I add to my system you know I test out and discard a lot of stuff but you know this I was very intrigued and driven to book map based on just managing this live liquidity I think it's I think it's a beautiful tool 3774 here coming down to test low of the day again which is S4 we've kind of finally separated from S3 and closed below we have got 3770 here which is that next level of liquidity that looks like they might try to transact here it's they're kind of bidding this thing down it's starting to get a little more aggressive you see that that price action starts to get a little more aggressive rounding off to the bottom it looks like they want that 3750 exactly yeah and now so I'm very curious how they're going to react to 3770 plus the 3770 the 3766 is a level to pay attention to as well that's that's the pre-market lows and then when those computers put in those lows in the overnight hours it's something I want to pay attention to in Mark because that's obviously a level of significance and we usually get a pretty at least some sort of check up around those levels and allow you to to be a little safety or to kind of draw a line in the same with the market well if it wipes out that level which is what I'm looking for if we could put in another low of the day here as well as wipe out that pre-market low are we going to be able to make a move down to 3750 do I use book map to look for entries exits or both I look for them for both in a unit it helps me do both it really helps me on my exits though the exits allow me to hold positions for longer to gain more profitability too because if I can see that liquidity skewed to one side of the other and I'm in that directional trade it's really going to help me give me that confidence to which again a confidence driver to hold on a position for a longer time you can kind of see as we come on down and approach the low of the day we get we're getting these smaller and smaller candles and a little bit less participation as we come down here so what I'm looking for here is a spike in volume can you see the volumes dropping off here as we're coming on down I'd like to see a spike in volume and participation to transact this level which looks like we're getting now under $37.70 which we could give good which could get a high confidence of what transact down to $37.60 and then make our way to $37.50 all right here so you know for me now it's like for example the strikes I'm looking at now if we were to breach this $37.72 level which you have to be delicate with it because that is a a decent balance area off of the low of the day it's different you know you want to be very careful taking a breakdown trade through lows of the day because we get like that candle right there a little bottom lick and you see we bounce right off S4 which is pretty much tied to low of the day down to the penny we bounced off of it moved it a little higher and coming back up so you got to be careful taking a breakdown trade through lows of the day and conversely got to be careful taking a breakout trade at highs of the day because usually even if it's a trend up or trend down we at least get a check up there and you might be able to get a better entry might be a little more patient and then waiting for the kind of shake out at these particular levels at low of the day and high of the day and plus now we got this liquidity that's just below lows of the day we're going to see if we can try to grab that and then obviously work our way down and I want to see how the volume comes in as we get lower and lower how active are they going to be obviously the flow is very right at the moment as we kind of bid this thing down about 15 points some really awesome icebergs in there as well like that one on the offer just following you know the blue line there the squiggly blue line and then one on the bid there for five yeah I noticed that noticed that I'm trying to see you know how they're going to really bid this down especially after that very large the order flow that came in earlier I want to see if they can really start hitting this thing because they're kind of trickling this thing down and if we get a momentum pop through this little third the low of the day which is getting closer and closer it could be pretty volatile you know but at least in the short term it's kind of like that explosion through as the the orders come through and blast that through that demand zone starts smoking us down at 3750 which is quite a large level so I love you know I love the SVP here too in volume profiles a huge part of my system that I follow but adding the SVP onto the book map was huge too because it allows me to volume you know monitor the POC which is an awesome level to manage the price action around you know adding these things here it gives me a little more insight into where the market might be drawn to so if we bounce up here then I'm going to be looking at that ballpark of 3780 which is you know right at S3 3780 to see if we if we're going to consolidate around there again before another move down but for first of all I'm going to see how this works here yeah so when I'm doing my you know time frame continuity is a huge part as well so when I'm on the three-minute chart I execute basically on the three-minute but I do my analysis on the 515 and then even after the 1360 30 minutes being my favorite the 30 minutes going to paint you the overall picture of what's really happening and it cuts out all the shorter time frame noise that'll you know get you in trouble if you're following the shorter time frame stuff so like a 30 minute now shows a clear top week after a pretty large doji at S3 we've got a large top week down to the low of the day still drop off in volume but overall the sellers are maintaining decent volume the 15 minute I think we just put in a new low of the day right there yep right there new the low day coming on down and a flush erronea right there so looking for how they're going to react here as a 3769 they just absorbed that large level of 3770 and let's see how they manage that so that was a nice blast through took out that level and now we're looking for lower maybe 3767 which would even put us on the track the 3750 which would be beautiful so 3766 is low of the day and I've got that notated on another chart here because that's something I always want to track is that low of the day chart that low of the day is going to be crucial for for managing potential bounces yep bookmap never lies man it's awesome it's like every time I question liquidity on bookmap it always proves me wrong so it's always good stuff I love it so not quite getting down there not quite getting down to 3766 they got that little liquidity just came in 67 6675 is low and there's a nice little bounce right off of it so if you might matters the VIX here too you know the VIX is up 0.86 which is pretty it's pretty suppressed given the fact that we're down you know 36% obviously things are having a little bit slower the VIX is obviously acting a little bit wonky this year compared to other years I know a lot of people talking about you know the VIX hasn't even seen 40 yet which I think it's coming but yeah the VIX is another part of the system I haven't really talked about today but it's a huge part managing the VIX and the volatility is a huge part of sentiment in the market and kind of judging where things are kind of going to go it's been a little more difficult this year because of the way that the VIX has been kind of suppressed going into these large large moves so let's see if we can hold this candle right here sorry are you using the VIX in your pre-market just to get a feel for you know some of the implied volatility in the options yes yes the VIX is one of the one of the things I look at in my pre-market because I'm wanting I'm wanting to really see how the market is disoring volatility or selling volatility if you remember back in June and July we were in a selling volatility environment where they just sold all volatility and of course we had that huge price pipe up to you know high prices so that's something I want to watch if they're in it like because I remember I took some long VIX calls way back in May and June and when they when I started to see that environment really start to spike that you know ever they're selling all volatility no matter what the price action was is when I elected to close those calls because to me when they get when they start doing that I don't want to be a part of VIX calls you got to be very delicate especially playing options on the VIX but when they start managing that VIX like that and things start getting you know bullish on the charts and then negative on the VIX you got to pay attention to that because that's going to tell you all right well if they're going to just sell volatility every day then I'm going to start taking calls in the S&P because they might drive this higher so I don't do any technical analysis on the VIX obviously because I I don't think that's that's something you you can do but I do manage the pivots on the VIX where the they start to enter phases where they sell volatility or buy volatility and if I can manage that if I can really identify those zones then it can kind of give me good sentiment where they might spike the S&P or sell off the S&P are there other I mean in general like are you usually just you know trading on the indexes here or is it other stocks individual stocks different commodities see I met for an option standpoint I mainly trade on the SPX I do I do ES features SPX future SPX options a lot of people or the S&P because a lot of a lot of the members in the server are doing SPY as well but I'm doing SPX and ES and sometimes I'll break out like an earnings trade for example I do a lot of Amazon trades we've recently done an Apple an Apple put we do a lot of different stuff based on the top 10 of the S&P but I don't really stray I don't stray outside of the like the top five or six holdings of the S&P like Apple Microsoft Amazon Tesla Google I pretty much stay in in those bounds unless it's a special event like an earnings play which I don't do very many of or something like that otherwise I'll I'll stick with the options now from a stock standpoint in my stock account I do pretty much I do a lot of different stuff I'm well diverse in and long-term holdings and stocks but those are mainly for investment purposes not for I believe in being a master of one instead of trying to scramble to kind of get a hold of everything I want to you know I want to focus on the S&P and then it's it's treating me very well so here's the low of the day here's the pre-market low test here coming up 37, 66, 75 just wipe that liquidity there oh did they actually wipe it oh they why they didn't transact that one yet it looks like and 37, 60 is getting a little robust too where's that iceberg at so they put on some decent icebergs there as I'd look at that like large iceberg right there as well over a thousand and just like that down to the penny almost they bounce right off that pre-market low so yeah so that low of the price right there in ES was 37, 67 low of the day and pre-market low there was 66, 75 so with 25 cents off there on the on the ES those give you a little protection you know I like I try to identify those main pivots in the market and it gives me protection it keeps me from trying to play put on the breakdown and getting bounce on right at these key levels that some people don't even know they're there and they wonder why they just took a call there took a put at the bottom I'm just kind of curious also in in kind of your evolution as a trader you know I know we know you're looking at calls and puts here and but did you did you or do you still do you know like different kind of times types of spreads calendar spreads vertical spreads all sorts of other things and options yeah I'll let me can I post something in this advanced webinar channel I really want to highlight this oh yeah sure if that's possible yeah so I want to take the screen shot here yeah there's there's an advanced webinar text channel as well if you scroll up okay quite a bit but wherever you're comfortable to put it I'd see the advanced webinar channel here there you go yep that's it okay cool all right so that white line right there is the low of the day for EES so that's what kept me from play playing that breakdown trade right there and puts and we just bottom week right off of it to the penny and that happens all the time so it's so important to identify pivot levels in the market where that be the prior days highs and lows and the pre-market highs and lows so that I mean pre-market on EES because that like again that takes in account the whole market because that you know that that tells you you know that the computer stop it there for a reason and it's not just random it's because their rules are set to stop right there or bounce it right there and that's what happened people get caught up and the selling off and they go I need to jump in puts here well it's like I'm saying we're coming up on on pre-market lows I'm not buying puts I mean you're you're going into a woodchipper right there trying to buy puts and we bounce right off of it so sorry I didn't mean to cut you off I wanted to highlight that particular that particular area oh no not at all that's uh that's excellent so your question was how did I evolve into an option trader is that what you're saying well into or do do you or did you play all sorts of different strategies with options because of flexibilities you know tremendous yes yes absolutely so over the years you know I've gone I went from I started out trading and day trading and scalping stocks on a margin account stock trading those and then obviously I did the natural progression into options and then from the options to different strategies like short spreads iron condors etc so for me primarily right now I'm only doing long options in spreads even less spreads now because I think spreads are very very volatile it's very risky in this environment anyone who done spreads know that you you know you need to be very cautious and you know what you're doing with trading spreads in this volatile market but yeah I primarily in terms of other strategies I do debit spreads credit spreads iron condors or type of things I've dabbled in selling cover selling cover calls off of my long-term portfolio but I don't I don't do that much now I kind of want to do a hands off and I primarily stick to long options and credit spreads less credit spreads like I pretty much stopped doing credit spreads a lot I was doing a lot per daily spreads multiple up until about February and then it got to the point where I got tired of 100-point moves defending credit spreads aggressively so I just like man I'm just going to put those on the back burner until the volatility comes off and then right now just take advantage directional plays with these crazy moves and the long options and that's that's that's sufficient yeah that makes that makes good sense I'm just kind of curious also too about some of the volatility plays like you know we knew there's going to be some action at FOMC or the days coming up to it are you in those positions playing the implied volatility you know a week in advance or a few days in advance etc yes yes so what we what I've I've kind of done and I've refined this down over the past six or seven FOMCs and CPIs is I've really started taking advantage of strangles long strangles which is not something I normally do because to me that is too risky to take a hit on theta but it's pretty much been free money for CPI and FOMC and if we kind of this time we did a little bit differently like I'm taking I noticed that for some reason IV does not spike that much on CPI but it spikes an incredibly amount on FOMC so I thought well if I could take a strangle the day before on FOMC and take advantage of the IV pump it's pretty much a free trade on a strangle and it's beautiful because like on to yesterday two days ago on what Tuesday night I placed a I placed a 30 outside the money strangle on the SPX and I woke up the next day and the call was very profitable and the put was still pretty reasonable given that we were up 40 points on the day because IV had spiked over 110 percent it went from like 38 40 percent up to 80 something percent and it boosted it boosted the the premiums so that allows me to pretty much take a free trade and I closed the calls at the top we sold off I had sold the puts at the bottom and it was it was a beautiful trade because in a normal environment if you take if you swing a strangle overnight the worst thing that can happen to you is the market opens flat and you'll be down like 56 percent right off the bill but building that watching that IV IV and being privy to the IV go from 41 percent to 80 percent and then eventually 150 percent the premiums are being supported so I can take a trade I could take a strangle worst case scenario the market's going to open flat and I'm only down like 12 percent because IV has popped so aggressively best case scenario the market's moved and I've made it's free money so the risk reward there is incredibly good and again that doesn't happen very often with long strangles because again long strangles are very difficult to manage when you open flat but to me it's a free trade and yesterday paid off very well and we're able to you know to pinpoint the tops and bottoms of that volatility but another another obvious way to to take advantage that I volatility is to sell position sell options into that implied volatility get the premium pump I'd like to not to do that this time because literally I mean you saw that we had a hundred and something point drop and when you're dealing with 120 point moves that's that's you need to know what you're doing and you need to have a good foresight and capital to defend your credit spread so I didn't sell any position into that we will kind of get into selling iron condors and spreads on earnings events when IV is that high but in terms of this move I just don't I don't want to touch short positions in this market with huge potential for moves yeah yeah makes sense no that that's awesome it's great to hear now just to just to verify it you mean a strangle as in you're selling calls and puts or a straddle where you're buying calls and puts before yeah yeah yeah long strangle so I'm buying I'm buying a call and a put so my normal thesis is to or my normal strategy for a day like as FOMC or CPI is to buy a call and a put that's both 30 points outside the money and that allows me to to take advantage of those big swings and you know it's worked out sometimes we've had a 540 percent win sometimes as low as like 100 percent sometimes like yesterday was only like a 25 percent win but either way it's it's free money CPI and FOMC it's it's literally paid off every time and it's it's it's it takes advantage of that IV pump yesterday like I said took it the day before because I wanted to I want to take advantage of that IV pump and kind of get a free trade and it worked out pretty well are you doing any kind of Delta neutral hedging on that or yes and no yes and no I'm always like what I did yesterday is I rolled up the Delta's so when the when the market opened and SP water the ES was up like 40 points I closed the call which was already in the money and I rolled up the Delta's up to a call that was about 20 30 points out to try to hedge that hedge against that position and obviously we sold back off and I was able to make money on the puts but still enough at profit on the position but yeah that's a great question so that's a little more advanced on some the strangle strategy because a lot of people understand the buying and selling but they don't understand the hedging part of things so that's exactly what I did if one of the positions go on the money I'll close out that long leg that's in the money and roll up the Delta's up a little maybe 30 40 points higher depending on it I'll only do that if on a volatile day such as FOMC where I think there's a pretty good chance we could make those type of moves but this is just great I mean all sorts of things that you're doing here and then looking at the liquidity here with your you know your day trading and putting this all all of this together into your strategies for for your options trading for sure yeah yeah it's I've kind of refined it down to the the minimal amount I need to be the max effective because I am a big proponent of less is more I want less stuff on my screens so it's like right now I've got it down in SR levels and then some EMAs for trend days and then of course book map and that's it I don't that's I don't every more than that I'm going to start to get conflicting ideas I'm going to start to get you know some like over over saturation of indicators and you don't want that but yeah it's it's it works well you know it's I've got a very intentional watch list because allows me to conduct litmus test of the market in any given time it allows me to monitor any kind of price changes by divergences and then of course I've got my tools to monitor order flow and liquidity and it's it's a good setup yeah beautiful stuff so now I'm seeing we've got another test here's a second test of pre-market loads which is going to be less confident than the first one because the first one obviously came down to touch the demand first time we had a very aggressive demand because we bounced off of it aggressively the second one shouldn't be as strong if we do bounce off of it the bounce won't be as aggressive I'm anticipating and we could even have faced a breach the CVD is a very negative at the moment and of course we've got building on 3760 and they've actually cut 3750 a little bit but still very high and if you see they're actually managing liquidity even south in the further south to 3740 3725 that order book is continuing to build lower so this will be an important test right here this will be an important test of that of this pre-market level there's that first breach below and a bottom look above so still there's still some demand there there's still demand resting right under this pre-market low that does not allowing the sellers to pretty much come through that level and we very well may come may may do that the next five six minutes but for now there's still a good amount of demand there and they're still bottom wicking this which is telling us that there's still some transactions there need to be taken care of and we need to negotiate that before we transact lower here's that first test 3767 so this is one of those times where obviously when we're going to trend down morning and you play I want to play trends a little bit more differently than a consolidation day because we get a trend up trend down and the market usually only trends about 20% of the time and it consolidates about 80% of the time and you I try treat those days differently for here if this was a consolidation day I wouldn't even be necessarily looking at puts right now I'd be looking for a bounce on calls the fact that we are on a trend down I'm going to give some weight to to looking at a put here 3750 put which is just slightly outside the money because on a trend down there's a good there's a higher chance that we're going to breach this and break down whereas normally like a Senate consolidation I'm looking for a bounce here pre-market lows is a huge level if we take this out I would give a very high probability that we're going to transact 3750 also I've got a very large level and I've I've plot two different types of levels I've probably I've plot my daily SR levels which you see on the screen and then I plot weekly levels that don't change they stay there Monday through Friday and I update them every every Sunday night and we're coming up on that level which does happen to be right at 3750 which is great for me because when I have multiple points of correlation across the market on stuff that on indicators that are independent of each other that gives me a higher rate of confidence and right now I've got my level which is right 3747 that I calculated last Sunday and then I've got book map showing a very large amount of liquidity posted at 3750 not to mention it's only 16 points out here so if we could take out pre-market lows under decent confidence with a good amount of volume then I'll be looking for a decent chance we touch 3750 at which point I don't necessarily think we're going too much lower than 3750 but of course then we'll we'll see what happens when we get down there wondering if I mean since you know in your intro there you say that your volume price analysis options trader what what exactly do you mean by that or how are you using that in your in your day trading here good question yeah so there's a book that I read years ago I was looking for something a little more technical in EMAs because I noticed that EMAs were fleeting they were only accurate about 60% of the time and I came across a book called the complete guide to volume price analysis by Anna Kohling and she dives into a great great relationship between volume and price action where you can have price action but if you don't have the volume to validate that then it's a weak move and then of course if you do have volume validating a price action then you can you can determine an entry and exit based on some level of confidence but the second thing she really touched on that was great for me is the hows and whys of volume price action so the big especially it's been very unique to experience 2021 and 2022 which is a very heavily news manipulating environment because everyone's like well why the why is the market going up CPI just posted 9.1% or why is the market going down there's really good news you know bad news is good news good news is bad news type of argument and people get kind of wrapped up around the axle on determining good news and translating that when really all it comes down to is accumulation of distribution and it's based on the volume moderning the volume because we know that the big players need to be at least net they need to be net positive delta so if they're going to try to buy low and move the market higher I need to know when they want to do that so they're going to manipulate the market to bid the market lower based on any kind of news and they're going to bounce it and try to transact that higher and I think they utilize news to do that and she kind of touches on that in that book as well but overall it's is basically monitoring the volume on the daily chart weekly chart even on down to the three-minute chart to tell me where the confidence in the market when are they going to start buying up low in selling high and it works on all timeframes there's cycles in the short time frame there's cycles on the long time frame where volume enters and leaves the market in ebbs and flows and it really tells me what it's going to do and it's kind of just based on that I like to monitor that and it really helps to cut out the noise of the news and see what cycle we're in nice little move down here we got breeze through 3764 so the volume price analysis is basically I mean do you look at on lower timeframes or higher timeframes or both all of them I'd give more precedence to the weekly and daily those are my two big charts I do my analysis on and then obviously I kind of trim it out and all it I kind of relate it to if you're like if you're going to sand a piece of wood to a good finish you need to start out with a with a wider grit and go all the way down to a extremely fine grit to get that really smooth finish and that kind of do it the same way I go big to small so I start out my volume my vp analysis on volume price action based on the weekly chart and then I go down to the daily chart and then I go down to the 60 minute 30 minute 50 minute all the way down to the three minute and that gives me a good big to small and I'm funneling big to small and that's going to tell me the fine print outside of the what the really market is really trying to say because I don't want to get caught up doing a macro analysis on a three minute chart because that's not going to tell me the big picture I want to see the big picture and that's going to tell me on the weekly chart and if you saw back even up to applying this to yesterday yesterday before FOMC printed we had a very large candle on the daily and weekly and then the next candle on the daily weekly was a doji candle which tells me that's a bearer setup that tells me that the bull we're not able to complete the deal on the bounce off of the weakness so that's a bearer setup where I'm looking for a continuation down and plus the volume wasn't there to support that a buyer's bounce either then of course we get the FOMC come in and they sold it off an additional 100 and some points so managing where the market where the volume comes into the market relative to the price second is going to give you a gauge of sentiment or confidence based on the big hitters the big hitters are going to be able to tell you well hey we want to start accumulating shares here so we can move it up 500 points and then and then dump them and they're going to manage the fear whether it be fear of missing out or fear of this market selling off to move that market with with volume so that's why some days you get those huge four percent double sell-off days where it's this absolutely institutional dumping and some days we consolidate and then we move up higher is because you have to monitor that volume to see what the big money institutions are doing yeah that's a fantastic I'm I'm wondering how you're reading it in book map with the volume and price action because one of the I feel like one of the nice things in the way that we show that is it's on the chart it's in the sub chart there as your bar volume bars and you also have CVD but you're you're getting actual you know price structure and action together with exactly where that volume is transacting is very very different than looking at it like a daily bar a weekly bar and then the bar a volume based on that entire day 100% yeah it's because I think I'm very well a believer that the support and resistance the market are evident if you know where to look and I think the order chain and I think the the liquidity book is going to pin where those historical supplies and demands are I mean if you look you know I've got and I'll show you this too in the advanced webinar channel here I'm sure my members are going to hit me for because this is some of their data but I want to show you all this just for the purpose of teaching that the prior chart where's this advanced webinar there we go all right so that big red line there is 374750 and I post that Sunday night and then we find out coming to find out that the largest level of liquidity on book map is 3750 so that tells me that the market is correlating the very strong level that I calculated 3747 and all that is based on is prior support levels throughout the past year and a half and the market the market has a memory it's going to bounce at strong levels of support it's going to reject strong levels of supply and the book map correlating that tells me that the liquidity book is definitely showing that that that liquidity in order book is going to support that level so that to me is a high commentary and it's probably today's target as well and I don't expect there I probably wouldn't look there to break that level at least in the last until the last 30 minutes of the day last 30 minutes of the day is a wild west nothing matters in the last 30 minutes of the day but that order book right there is really showing me that there is a high confidence at 3740 and I need to pay attention to that but yeah that's I'm looking at I'm looking at the book map to validate the liquidity that's been placed historically and the potential liquidity I can correlate that through strong levels of supply and resistance in the market then it's going to give me a great indication of where I need to buy and where I need to sell that's fantastic to hear because we may have to have some other maybe events just on that subject with you that'd be fantastic because I think what a lot of players or traders when they start looking at book map they get very confused by liquidity they haven't had access to liquidity before none of the trading books none of the education out there it talks about liquidity and understanding it understand they understand volume really well but they don't understand the other side the liquidity so it's really great to see how you're integrating that within your analysis 100% yeah 100% and you know people always ask me what value do I get at a book map because they know that I'm very much heavily against indicators and they ask me what do I get at a book map and it's precisely that it allows me to to kind of interpret the dance between volume and price action if I have a level on my chart that's not really showing up a lot of liquidity on book map then I need to be you know skeptical of that level because the market is the market and if there's no liquidity there then you know why would I expect a strong bounce there or why would I expect the market to trans up down or trans trans act up or down to a level of liquidity that's not necessarily correlated through the book so if I can see that come on there especially at a particular level at a very calculated like man that that's a good level and that kind of correlates and affirms what I'm seeing here on the charts and I since since I've got you here I and bend your ear one more time on a question here about the implied volatility into heavy heavy liquidity do those look like a kind of a no brainer set up for you or like how how do you kind of read that I I've I've always thought this would be such a beautiful setup in the options so yeah so when I price cratering down you know in into high liquidity and just and they're just continually absorbing it just looking for the volume to just kind of turn around a bit beautiful yeah that that to me is one of the best things I love about about using this is that right there is that for example if we want to trend down day which it definitely seems like we are now I see 3750 being built I see 3760 being built even stronger as we're coming on down and the two big things to note is that I'm not seeing any order flow being built above and I'm seeing not much else being built below 3750 we do have some being built down to 3725 but that may change as we get lower but basically what I'm trying to look for on a trend down day is when are they going to stop selling and either enter in either one enter into consolidation or two bounce this back up into another supply and managing the book map here if I could see that one they're not met they're not really adjusting the liquidity below 3750 then we may be looking at the bottom of the market either at or slightly above 3750 in my trading in the discord server in my discord server I kind of call that dangling the carrot when we start approaching 3750 and I see people starting to look for more and more puts I'm just saying being careful of the dangle of the carrot because they're going to dangle that carrot right at right at or under 3750 they're going to get people fomoing it to puts and then they're going to bounce it back up that's how they get that aggressive move so when I see a large amount of liquidity such as 3750 not really much else that I'm looking for more of a consolidation slash bounce play at 3750 as opposed to a wipe liquidation and fall through granted there's a lot more variables to it and there's it's definitely dynamic but that's pretty much the overall theme I'm going to be more skeptical of puts at 3750 as opposed to as opposed to taking calls yeah yeah I mean you're just going to get such a such a discount on your options at that point oh yeah oh yeah you know that's the thing you know you want to you know the the vpa book I talked about talks about a great a great setup for that is when you start looking instead of you have to think about it you have to think about how the institutions are thinking not about how retail thinks retail is looking at buying as cheaply as possible and selling as high as possible whereas the retail trader is looking for the move that they want they want confidence in a move so when you see a big bullish move forming the move could already be 70% done now retail is trying to look at buying whereas institutions are looking at selling so I want to buy into weakness as low as price as possible and sell into and sell into strength whereas retail is kind of different they want to buy into that they want to short the shot they want to like buy puts or short the market into this weakness to take advantage of the confirmation whereas institutions are thinking of countering that move so when I see a large areas of liquidity I want to start looking where do I have an opportunity to buy into this weakness and if the market is raging up high do I have an opportunity to close out or short into that strength obviously you got to be delicate and do that very precisely and that could be on the weekly chart or on the daily but it really depends and me knowing me knowing the vpa in the system as well as where the liquidity is printed on bookmap allows me to kind of refine that process so there's a nice little strong green bounce off s5 right there as we're kind of coming on down and this is kind of what I was talking about the closer we get the 3750 we may see more and more of these type of little bounces as we start to enter a little bit lower we start to face more and more demand and maybe one more aggressive flush down but overall you got to be wary of the the dangle in the carrot you know they're going to try to get you down and start foam-wowing into puts or shorting stocks and then they're going to squeeze people out and you just got to be careful coming on down here so we've got what 3767 that's a little 10 point bounce right off s5 there so that's about the second strongest bounce we've had today and that's the first one off of what about 10 o'clock in the morning we had a bounce off of 3772 up to 3795 but but if you that that's what I'm looking at from here on out in terms of book map is how are they going to manage this current liquidity right here are they going to start adding a little bit more to the book higher to kind of skew it a little bit or is it going to just maintain this level here you know I'm looking for you know at this point we've got is there a potential for a V recovery or are we going to continue on down so far that's a pretty strong bounce right there and how is the volume going to rack right now not too much volume coming in so far although it's starting to increase and build and we're already right up to the 34 EMA in S3 so there's a question here in YouTube I was just about to I answered it already but I hadn't sent it and I thought well and all I better ask so where the liquidity is is where price is most likely to go well it depends you know it depends if I don't necessarily look at them alone as targets I'm trying to look at how is the overall liquidity being managed in the book is it skewed heavily to the south or up to the upside do we have an outlier that I'm necessarily need to be looking at so it is a target in a way but it's more about the management of the overall liquidity of the entire book that's really going to drive sentiment for me if I could see continuing sentiment being put out or liquidity being put on lower and lower and they're continuing to shift that liquidity lower that tells me that the market is going to try to bid the market down potentially and that's what I want to look at in terms of this if we're going to look specifically at this particular setup I think 3750 or plus or minus you know 3750 plus or minus six seven points would be a great target for the day just just just judging by what I'm seeing here I've got 3760 3750 and not really much else here obviously they're putting on stuff lower but the big stuff is right there that's been on there all week and the fact that it has been on there all week and they've built that into today can tell me that 3750 is a likely target for late this morning or early afternoon somewhere in there yeah that's kind of what I had loaded up was it depends was the answer but good to hear yeah it depends yeah that's the thing about options trading we're chatting in general it depends it's pretty much the answer for everything unfortunately it's pretty dynamic so Steve is also also asking what if there's liquidity on both sides how do you how do you read it yeah so when we are when we're straddled with liquidity like that you know it again it depends obviously but it when I'm looking for it is how is the skew really showing is it balanced completely balanced then I'm probably I'm looking for maybe even a consolidation day where a balance off low is rejecting off highs if it's 80% downside 20% upside then maybe a slight retracement up to that liquidity and then move on back down but it honestly depends on how skewed the water book is it how is it balanced then you're most likely to see a lighter lighter liquidity environment balanced order flow here on a consolidation day and that's where the days where I want to scalp scalp low and high whereas a trend day we may see a completely skewed to the downside and not marry much else to the upside which is what we're seeing here today so basically the play for you is like take what the market gives you 100% 100% taking the market gives you and it's it's more difficult the tighter time for me get and the longer time for me get it's easier for me but you have to be more patient and unfortunately that's not something a lot of people able to do you got to just you got to wait for the trade to come to you my best trades are the ones where I kind of get that spidey sense where like I get complete like I'm completely calm taking the trade I have no I have no stress and those are using my best trades because I'm patient enough to wait for the trade to come to me if I'm going to take a call or put a specific point I have to be very disciplined to wait three four five days for that price to approach that point and enter the trade at that point so the longer time frames yeah absolutely in the shorter time frames obviously a little on a just reduced time scale okay everybody will the the webinar is being recorded here and it will be up on youtube later yeah great questions though man I love you know I love I love talking about this stuff I mean my members know I can get pretty long when to talk about you know anything from from anywhere from vpa to price action to emotional like everything like it's a it's a subject I'm very passionate about because it especially with the huge influx of investors the past two years I think there's a lot of misconceptions about what day trading we're investing in general actually is some people treat as a casino some people treat it as gambling and it's definitely not and the second you treat it like that you'll learn quickly that it is not that so I'm very passionate about the subject and trying to refine always trying to grind that axe and refine the process and try to really be patient on the entries and calculate exactly when to enter and it's always it's never ending process you know it's never perfection so we still got that 3760 on we kind of trucked up here to 75 as volume starting to enter here we have more and more by volume starting to enter the enter the flow here we have some iceberg coming on here too that was kind of light earlier