Hey everyone. This is Kirk here again from Option Alpha. Welcome back to the daily call. Today, we're going to be answering the question, "How can support become resistance and vice versa?" In many classical options trading and stock trading programs, one of the first things that you may learn in a system is to read charts and to try to find levels of support and resistance. Now, many of you guys also know that I'm a big… I don't know. I'd say skeptic of chart reading because I think chart reading leads to many different interpretations. I could show somebody a particular stock chart and they could draw support and resistance lines completely different than the next 10 people that I show that same chart to. There's a lot of interpretation here, a lot of I think perspective that get drawn into many chart patterns and support and resistance levels.

But leaving all that beside, the concept behind support and resistance basically becoming floors and ceilings in stock charts I think is something that has more validity than other things in the charting world. The reason that we see support become resistance and vice versa is because at those levels on a chart, that's when we see the most aggressive buying and selling. Let's just take a quick example and I'll try to visually walk through this here on the audio. It's a little bit harder to do since we're doing a podcast, but I think you'll get the concept. But let's say we have a stock that's rallying and the stock is starting at $100, rallies up to $105 and then comes back down to $100 and rallies off of that level. Now we know that that 100 strike level seems to be a pretty good support level. The stock has gone up to 105, it's come back down to 100 and it's basically stopped falling at 100 and then rallied from there. The reason that it becomes a support level theoretically is because a lot of people came in and thought that that was a good value to then buy up the security and basically cover all of the short interest and then cover it enough, so that it starts to actually make the stock regain some momentum higher. This idea is that we have a lot of volume in there, a lot of people coming in and buying stock at 100.

But now, let's say that the stock rallies only up to 103 and then starts falling and immediately crashes through the 100 supposed support level that we have. It trades all the way down to 95 and then trades back up to 100, but does not breach. In fact, it doesn't breach it. It starts actually then going back lower. The idea here is that once the stock has crashed through a support level, it may come back up and retest or re-challenge that support level and it will now act as resistance. Now, the reason it acts as resistance in theory is because when the stock reaches back up to that 100 strike, a lot of people who have been holding stock at 100 and seen the stock go up and down in value and basically make money and then lose money, might be more willing to basically cut their position off with no gain, no loss, basically zero-sum credit. If I'm holding stock at 100 and I see it go all the way up to 103 and then go all the way down to 95, if it comes back up to 100, I might be just fed up with it, impatient and done and basically put an order in that says, "Hey, look. If the stock ever gets back to 100, sell my shares." And so, that's where we see a lot of this old-time support become new resistance because people are not willing to hold through it or they're just placing orders in the market to liquidate their stock position, again, at no gain, no loss, basically zero-sum. That's how it works. Hopefully this helps out. As always, if you guys have any more questions, let me know and until next time, happy trading.

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we're going to be talking about how to minimize short exposure when trading. I think there's really two types of short exposure and I want to just clarify as we go through today's quick little podcast. The first type of short exposure is directionally short exposure, so the idea that you're basically directionally trading bearish, most people call it shorting stock. Although we don't ever deal with stock directly here at Option Alpha unless we're assigned, we can trade positions bearish or short, so hoping that the position goes down in value or the underlying asset goes down and we build a strategy around that. That's the first type of short exposure. The easy way to get around that or to minimize your short exposure is just to naturally trade things that are bearish as well in your portfolio or trade things that are more neutral in directional bias. And so, it doesn't mean that you can't trade things with a bearish assumption. I trade them all the time. It's just you have to counterbalance that with something that's a little bit more neutral. If you're going to be bearish on one thing, try to be bullish on something else or neutral on something else, so that you don't have a ton of one-sided directional risk.

The other style of short exposure that we have to minimize is I think short exposure to option contracts. When a lot of people talk about minimizing their short exposure, they're really worried about naked option selling where you're selling puts or selling calls naked, doing some combination of naked options trading which in many cases, leads you open or it leaves you vulnerable to large moves that could have a dramatic impact on your P&L. The easy way to mitigate or kind of minimize the short exposure when you're trading options is to simply define your risk and what I mean by that is that if you are going to trade short contracts and you don't feel comfortable yet trading naked or single leg option contracts, then go ahead and create those spreads that define the risk in the position. For example, if a stock is trading at $100 and you want to sell a 105 call option, you may not feel comfortable with all the risk that's associated with doing that. And so, you might want to go out and then buy a 110 strike call option. It's a little bit more of a premium to do that and a little bit less net credit on the position, but creating that 105, 110 call spread basically eliminates the long or short end exposure for the option contract and gets you into position that has defined risk and defined profit. It's very easy to do. You just have to again, define the risk. That means in many cases, going out and buying long option contracts on either end. As always, hopefully this helps out. If you guys have any questions, let me know and until next time, happy trading.

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we're going to be answering the question, "Does unsystematic risk matter anymore?" First, let's read a description of unsystematic risk. Unsystematic risk is a unique specific risk to a company or industry. That's also known as nonsystematic risk or specific, diversifiable or residual risk in the context of an investment portfolio. Unsystematic risk can be reduced through diversification. The idea around this is that if you have two different companies, say McDonald's and Apple, you can pretty much diversify most of the risk away from owning those companies by investing in other companies that are non-correlated to Apple and McDonald's, maybe a utility company, maybe an oil and gas company, a financial services company. There's a lot of ways that you can diversify around it. The question that everyone is asking though is, "With the advent of indexes and a lot of these ETFs, should it matter what unsystematic risk is still present in the market?"

I think the answer to this question is of course, we should because even though we can diversify away from most of the unsystematic risk in the market through a portfolio or a basket of ticker symbols whether you're trading stocks or options, it's still really important to position size accordingly because of the recent big moves that we've seen in even some of the bigger ETFs that cover entire countries and their markets. Recently, we saw EWZ, RSX, EWY… A lot of these ETFs have made major overnight moves, in some cases, 15%, 20% down which represents an entire market or an entire industry moving down and having a massive systematic risk impact on the rest of the portfolio or in many cases, the global economy. I think that unsystematic risk is being put to the back table because many people think it's easily diversified out of with a lot of these ETFs and investment indexes, but the underlying truth is that most of these ETFs and indexes are still made up of real companies. And so, if that basket of ticker symbols or companies that the ETF is tracking or investing in is still made up of something that carries a lot of unsystematic risk, then that's not necessarily a good thing.

I think it's something that we have to keep an eye out always with what we do here at Option Alpha as far as options trading. I always like to keep a diversified basket of tickers. In fact, just the other night as I was going through the weekly strategy call with elite members, we talked about adding some tickers to our portfolio that had lower implied volatility than other things that we had on our watch list, but the reality is that adding those tickers would add a little bit more diversity to our portfolio. And so, we weren't going to keep cramming in a bunch of high IV tickers into our positions if we already had five or six different positions already and similar or related ETFs. Instead, we're going to try to diversify things out. Even though it might mean trading something with a slightly lower implied volatility rating, I think the diversification benefit of doing that is far greater than trying to pigeonhole ourselves into one industry. Hopefully this helps out. As always, if you guys have any questions, let me know and until next time, happy trading.

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we're going to be talking about why I believe that the cyclical end of index investing is near. In fact, I think it's probably pretty close. Maybe a couple of years out at the most, I think that this market is going to spell the top four index investing and something else will evolve and kind of transpire out of the markets, potentially more of an active automated thing as far as what the next big thing is in the market. Now, for one minute, just try to remove yourself from being overly-emotional when I say this because I know that immediately when you saw the title of this podcast or even started this podcast, you might think to yourself, "No way. No how. This guy is absolutely insane. He's crazy. Index investing is the only way to go. There's no way that you could do anything different." But for one minute, just maybe take one step back and think about it from a different perspective and I'll offer up this logic over the last let's say two examples of what might have worked before ended up not working in the future moving forward. There are two examples I want to go through and I think this will define what index investing is right now. It's just undercover and it's very subliminal right now. It's subconscious to a lot of people, but the reality is it's actually happening. Ask any real quant fund manager. This is happening in the real market.

The first example I'll give you is the bitcoin phenomenon and bubble that we just went through at the end of 2017. Now, everyone knows now (hindsight) that bitcoin was a massive bubble at that time. Now, could bitcoin continue to move higher in the future? Maybe. Sure. I have no idea. But during that time period where we saw bitcoin run-up to maybe what was it? $20,000? I don't even know what it was, $20,000 per bitcoin. We saw the workings of the same mechanics that we see right now in the index investing and those mechanics are as follow. If I buy bitcoin with basically this hope and dream that bitcoin has value which we know people bought much higher than where the value is now, if there is value now because it's just continuing to move lower, but if I bought bitcoin, my only hope was that somebody would come in and pay a higher price than what I was willing to pay. This whole idea of this greater fool's theory. There's a greater fool out there that will buy bitcoin at a higher price and then that person thinks somebody will buy bitcoin at an even higher price. The people who bought near $20,000 per bitcoin obviously thought or whether they thought it or whether their actions basically spoke the words and that is "Somebody is going to buy this at a higher price, therefore it's a deal." But the reality is that at some point, fundamentals and actual value comes back around and what we actually saw in bitcoin is that that ended up collapsing very quickly. And so, the last year or so, bitcoin has been terrible and you don't even see it. I mean, Google search trends are down, nobody mentions it. CNBC used to have a bitcoin ticker in the bottom left-hand corner of the screen. That magically disappeared as well. We don't even see this anymore. And so, the under-spoken or like underlying truth here is that at some point, value comes back and people have to judge things off of value especially when we're talking about long-term equity play as investments. It comes back down to value. What we saw in 1997, 1998, 1999 heading into the dot com bubble was the exact same thing. It was just in a different market. And so, we saw it during the dot com bubble, is that people were paying all of these insane valuations for startups and internet companies based on this wild expectation that companies could grow into infinity. Now, of course, some survived and some lasted naturally, but a lot of those crashed and burned because at some point, a greater fool basically was the last ending string of potential greater fools and then value kind of self-corrected. We've all been through those scenarios. If you haven't been through them, please go back and research them because it's really important.

But what we're in right now is very much an undercover type of greater fool theory and I challenge you to prove me wrong on this. But in many cases, there are a lot of people who are investing in index funds and ETFs where all they are doing is taking all available cash and continuously buying up the indexes. Now, at some point, this works really well. But at one point, there's going to come a time and I think we're very close to that time, where all people are doing is just blindly investing in the indexes, just investing in the indexes because that's what I'm "supposed to do" because that's the right move. And so, whether they think it or not, consciously or subconsciously, all they are doing is becoming the greater fool. And as the markets continue to go higher, it sucks in more people near the top that more people start index investing because that's the best thing to do and all they're doing is just buying because that's what they do. And what we see right now is we see forward PE ratios on the S&P 500, some of the highest levels we've seen, reminiscent of all the recessions and depressions that we've seen historically. We've done videos on this on Facebook. You can search our Facebook account. We show these things to you guys. And it's because people are just blindly buying up the indexes. Now, at some point, the indexes and these fundamentals are going to correct because if everyone was right, everyone would be rich and right now, some people are rich, but not everyone. And so, the end of index investing I think is going to come to an end in the very near future and we're going to look back on this and be like, "Man. Maybe we should have some sort of active money management strategy in place." Fool me once in the dot com era, fool me twice, okay, now you should've learned your lesson in 2007, 2008, but fool me a third time and now, people are going to I think dramatically change their paradigm and how they invest. I think it's going to move towards more of an active management style. I think it's going to move towards more of a shorter duration style versus these long-term index plays. They played out really well and everything plays out really well until it doesn't. Hopefully it's been helpful. Like I said, hopefully I look back on this podcast maybe a year, two or three years now and say, "I called it." I thought that this was going to happen. I truly believe that it's the next one to pop. And I don't know when that's going to happen. I'm not going to say it's going to happen tomorrow or next week or next year. But at some point, it's going to correct and at some point, valuations are going to come back down to where they should be and I think that that's going to be really hard for a lot of people, that pill to swallow. As always, hopefully this helps out. If you guys have any questions, let me know and until next time, happy trading.

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, I'm going to talk about why broker's platforms suck and what we are going to do about it. This honestly has become to me, a really nagging thing and that is that I have to explain to people all the time why one broker or another broker can't do something. This happens with Thinkorswim, this happens with Tastyworks, with Trade Station, with Schwab, with Robinhood, everything and I feel like I have to always explain why their broker platform to some degree and in some areas, sucks what they do really well, but what they really suck at. And it's hard because a lot of these broker platforms are not built for the full-time options trader or for the person who's focused on full-time options trading.

One of the things that we've been doing and we'll be releasing very soon in the next month, month and a half here has been our own platform for auto-trading. Now, it's not going to be just auto-trading. It's going to have all of the capacity to scan, monitor and more importantly, auto-trade and analyze your positions moving forward. Now, we'll have more details on this coming out, but that's literally what we're trying to do, is we're trying to build the platform that I know I want, that I know you guys want because I hear it all the time. I hear all the complaints about reporting. They don't know. Many platforms especially Thinkorswim right now, we don't understand if we're really making money or not. If we are, what positions are making money and which are not? Are we doing good trading credit spreads or not? How do we know? And many of these broker platforms just kind of shrug this off and that really ticks me off now because they're making a lot of money off of commissions and off of fees and everything and they just shrug off a lot of the stats that really could be important and could lead people to making smarter decisions and smarter trades and basically allocating their money with better information. We're trying to build that. I think that's a big push for me lately. Now that we've got a really amazing team of developers and people leading this and helping me out with this, we're really going to push the forefront here and build something that's revolutionary, I mean, something that's intuitive, easy to use and more importantly, super, super powerful, data-driven, I mean, all the things that we've been wanting in this industry for a long time.

I would say that the point of me doing this show is not only just to tell you guys what we've been working on, but I think that right now, where we're at in this industry is that a lot of people have been settling for subpar technology and that has ticked me off for the last couple of years. And so, I've been investing a lot of my own personal money. A lot of the money that we generate from Option Alpha goes right back into investing in this type of technology for you guys, so that we have something that we can catch up to a lot of other markets and industries. The brokerage industry and the investment industry is very old-school. It takes a long time to move this ship in many respects. And you look at the Thinkorswim platform which hasn't had a major update since it was basically purchased by TD Ameritrade, I mean, think about it. It has not really had a major update to that platform since it was purchased from TD Ameritrade. That's crazy. And a lot of these platforms now are just recreations of the same thing. And so, we're doing something completely different, way more intuitive, much easier to use and of course, naturally integrates all of our auto-trading and AI technology that we've already built out. It's going to be amazing. I can't wait for you guys to see it because a lot of the other platforms out there suck right now and we're hoping to change that big time. Hopefully this helps out. If you guys have any questions or want to learn more about it, obviously just stay tuned. We'll be doing some more shows and some more podcast as we get much closer to the launch here. But it is coming. It's very much well worth the wait and hopefully you guys are really excited about it. Until next time, happy trading.

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we're going to help answer this question and that is – If you're losing too much money trading, you need to solve this one problem first. I truly mean that it's one problem. You only have one real major issue when it comes to trading and that trading problem that you need to solve is better order entry and that's truly it. Now, that encompasses a lot of things, so I don't want to oversimplify and say, "Hey. You just need to make better entries." That encompasses a lot of different aspects which I can quickly touch on. But the idea here is that if you are doing a bad job trading and you're losing money, it's probably because you're just flat out entering the wrong trades. Now, I see this a lot because the concept here is that better order entry saves you from having to do all the other things that you are probably doing right now and it allows you to focus on the most important, biggest leverage item that you can do. What I see people doing all the time is they make a trade and then they spend 90% of their energy and time on fixing the bad trade. Well, if it's a bad trade to begin with, you can only do so much to improve that trade. We've heard of the analogy of like lipstick on a pig. You can put lipstick on a pig, but it's still a pig at the end of the day. The core of what it is has never changed.

When it comes to trading, better order entry saves you from having to do all the other things really well, like adjustments, closing. Just make better entries and that takes care of 90% of the issues that you probably have. Better entries means – Check your position size. Check your portfolio balance. Are you selling options versus buying options? Are you trying to be as non-directional as possible overall? Do you have good diversification of tickers or are you trading everything in the same industry? It's these little things that honestly are very, very easy fixes and allow you to frankly be lazy on a lot of other things and still be successful. Again, if you're losing too much money trading options, I encourage you just to revisit some of the orders that you've placed. We all know and we've been there. I mean, myself included. You've placed orders and you're like, "You know what? That was stupid. I shouldn't have done that." We've been there. It's okay. We're adults. Let's own up to it and let's try to make better, smarter, more profitable trades from the start. Don't try to fix bad trades that have gone wrong. If it's a bad trade, there's only so much you can do. It's bad at its core. It's like apple. It's like if there's a bad apple, you can't do anything to improve the apple if it's bad at its core. It's just a bad piece of fruit. Throw it out. Move onto the next one.

Hopefully that helps out. As always, if you guys have any questions, let me know. If you have any comments or questions for the show, head on over to optionalpha.com/ask and leave me a voicemail there. Again, that's the best place to leave us a question that we can get queued up here for the daily podcast or for the live streams that we've been doing every single day on Facebook and on YouTube. Until next time happy, trading.

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we're going to be talking about protecting the golden eggs and the goose that lays those golden eggs at the same time. This is honestly one of my favorite stories. I think about this story all the time when it comes to investing and trading and just generally in life. I think this is a good story and it comes out of seven habits of highly effective people. If you haven't read that yet, it's definitely one of my, I guess top five books. I've read it three times now. I have it on audio. I listen to it all the time, at the gym when I'm working out, when I go for walks, if I'm just sitting in the morning and kind of doing my meditation routine. I listen to that book all the time. One of the stories that he tells in there is the story about a farmer. And so, this farmer finds this golden goose who's laying all these eggs. And so, every day, the farmer goes out and the goose has laid a golden egg and obviously, the farmer is really happy about this. And so, every day, he goes out and he collects this egg from the golden goose. Well, eventually, the farmer just gets really impatient and irrational and goes and kills the goose, anticipating that if he just kills the goose that there's all these golden eggs on the inside and he can just basically take all these golden eggs at one time. Well, what he doesn't know is that in killing the goose, he's removed that asset that is then laying the golden eggs. It's a classic, I guess parable or story or example of why we have to be so protective over our assets that generate enough income for us to live. And so, I think about this all the time because I live off of the income that I generate from trading. Whether that income is down for a year or my assets are down for a year or my assets are up or flat, I still take my same draw that I've taken for years from our trading account.

When I think about this, your trading account, your nest egg is the golden goose. I don't know why they call it a nest egg. They should call it the nest goose. I mean, it's like that is your productive mass that generates the income and cash flow and the trading that you do is the capacity to earn and that's one of our biggest assets. But the problem is that if you kill off your goose, if you allow yourself to be irrational, not patient, not confident, you don't follow the risk and tolerance rules that we lay out here at Option Alpha, don't keep your position size small, etcetera, you'll eventually end up killing off your golden goose which removes any production capability that you might have for generating income in the future. Ask somebody. "Hey. How much money can I generate in income if I have $0?" Well, zero. You can't generate anything trading if you don't have enough capital to even start. I think this is a really interesting concept. I'm telling you. I think about this all the time and I think hopefully it sparks some sort thought process in your head or a reminder in your head to protect what you have, protect the goose. The goose is what allows you the ability to go and take a golden egg every single day. In down markets, we have to protect ourselves. In up markets, we have to protect ourselves. Position sizing, portfolio allocation, balance, all of these things tie right back into the story about protecting the goose or you're going to end up starving yourself, basically on no income in the future. Hopefully this helps out. As always, if you guys have any questions, let me know and until next time, happy trading.

Hey everyone. This is Kirk here again from Option Alpha. Welcome back to the daily call. Today, we're going to be talking about why this market that we are in right now just became one of the top six longest bull markets for stocks. I want to spend a little bit of time going through some of the data on the top six longest running bull markets in really, kind of our modern era or modern history. Basically, going back to 1950 is where we pulled all this data from. And so, we took a look at all these bull market runs and kind of analyzed them. And so, we put together the top six or so with these bull markets and the one we are in this month just crossed through and has become the longest-running market ever that we've ever had, the longest bullish expansion that we've ever had. Now, of course, this can always continue on further, but you just have to ask yourself what's the risk reward features of the market that we're in and where does that change your dynamic if you're a long-term equity investor.

There's six of these kind of eras really. There's the postwar boom back after the World War II ended, there is the 70s, the Reagan era and the 80s, the 90s leading up to the dot com, there's the housing bubble crash and kind of the expansion that was again, the housing bubble back in 2004, 2005, 2006, etcetera and then this one which is just kind of post great recession expansion. I don't even know what we're going to call it. Whenever it crashes, we'll usually get some sort of name. The first one which we'll go backwards in time here and kind of look backwards-forwards… But the first one is the postwar. This began really after World War II and lasted 86 months, so it was actually quite a long period of time that lasted all the way up until August of 1956, so quite a long time. It lasted a couple of years, seven plus years that era lasted and of course, the market went up during that time period 267%. Now, in the 70s, we had an expansion period from about October of 1974 all the way up until November of 1980 and that lasted 74 months. The market was up during that time period 126%. During the Reagan era, kind of that great expansion of the Reagan era that everyone talks about, the market had a bullish run of 60 months from August, 1982 all the way up till August, 1987. The market was up 229% during that time period. And then the time between basically the market crash that we had in the 2000 dot com bubble era, the market was up about 101% or so during about a 60 month time period. Just about five months, the market ran and again, that was the lows around 2002 in August till the market topped out in October of 2007.

Now, the one I left out here and I want to compare to the current run is the one that looks most similar to what we're dealing with right now and that is the great expansion that we had during the 1990s leading into basically the dot com bubble. Now, during that time period, the market went on one of its longest streaks which was 114 months, so basically 9 1/2 years of continuous movement up in the market which was pretty much an incredible feat for sure. And when you overlay both of these graphs together, both the great expansion and the one that we're in right now, kind of this post great recession market run, they look very similar. I mean, it's almost scary similar how they look. But the one in the 1990s that ended with the dot com bubble, the market ended up 118% mostly because of dot com, obviously, mostly because of all the hype around tech and it kind of crashed pretty hard, but it lasted 114 months. Well, this month, we just crossed over about 114 months on the current expansion and the market's up over 305%, 306% depending on how you calculate it with the S&P. The market's been up considerably and has now lasted longer than the one that we had back in 2000 when it ended in the crash in around 2000. We're in right now, one of the longest stretches of history of expansion and obviously, it's fueled by central banks and low interest rates, etcetera, all this post great recession expansion that we have had. Whether it's on paper or whether it's actually true, who knows? Well, time will tell and see where things go. But I think it's important to keep these in the back of your mind especially as we continue to move forward in the next couple of years.

Many people in this market right now have not traded through a recession or a drawdown, a significant drawdown in the market and that to me is a little frightening. I think people are going to be shocked to see how fast and how violently things can move down. But we've seen just in the last let's call it last year for the S&P 500, is a lot of volatility, but it's really a blip compared to what could happen if the markets really go crazy. Take this time to kind of do a gut check and just ask yourself. Do we really think that this is going to continue for another nine years? Probably not. Maybe another year or two or three? I don't know when it's going to end. I mean, it definitely could continue to move much, much further than where it is right now. I have no crystal ball, but the risk reward at these levels continues to be insane especially if you're an equity trader, so you should be an options trader and it gives you the flexibility and the advantage of being dynamic enough to change with the market. We're only trading 40, 60 days out, so we have the ability to adjust and hedge and move our position around wherever stocks go. Hopefully this was helpful. As always, if you guys have any questions, let me know and until next time, happy trading.

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we're going to be talking about geography bias investing and why it actually is a real thing. Now, you may have not ever heard of this, but the idea behind geography bias investing is that people who live in different parts of the country here in the US or even different parts of the world have completely different investing biases based on where they live. You would think to yourself, "Well, okay. That makes rational sense if I live in a town that is say Silicon Valley in California. I might be more up to invest in technology." But on the other hand, people you would think are more rational in a sense that everyone would invest in say the indexes or they would try to invest in the same general broad global portfolio. But one quote that I've heard before… I don't know if I'm going to butcher the quote or not, but it's the idea that if everybody owns everything, then nobody owns anything. And so, this idea behind that is that when we think that we understand the psychology of all investing participants, we have it completely backwards. In fact, I would even relate this to say when many times I've gone through webinars and I've done trainings for people on options trading, the natural reaction is – Well, if options trading works so well, why doesn't everybody do it? And the answer is that they just don't. They have other biases or they have other agendas or they just don't know or they don't understand. It doesn't mean it doesn't work. It's just that it's not as widely dispersed and even if it was, people still might have a bias to do something different. They still might have a bias to be option buyers and try to get these outsized gains and go for the homerun every time.

On the geography bias thing, there are a couple of little stats I'll share. These come from the Visual Capitalist, so you can go to their website and check that out. They've got some great stuff on geography bias. But one of the things that they do is they put together this geography bias by area of the country, so West Coast, deep South, Northeast, Midwest, etcetera. What they found is that if you live on the West Coast, you are 20% more likely to own technology versus the South and Midwest, so companies like Apple, Facebook, etcetera which is crazy, but again, logical. Like just the actual physical location of your home, you are 20% more likely to own tech. It could be good, it could be bad, but it's pretty interesting. If you live in the South, you're 26% more likely to own energy stocks from the golf, so Exxon, Chevron, etcetera compared to the rest of the country. Again, makes sense because your physical location is closer to that style of industry. If you are on the East Coast, you are up to 23% more likely to invest in financials, Bank of America, Wells Fargo, J.P. Morgan, all Wall Street type companies, financial institutions because you're much closer to New York. And if you're in the Midwest, you are 26% more likely to invest in industrial companies like GE, Caterpillar, etcetera. It's really, really interesting that just your physical location on this planet has a lot to do potentially with how you have biases against investing.

And where I think this is prevalent for us as options traders is when we get into a position and say we sell a call option or sell a put option, sometimes people will say, "Well, why isn't everybody taking this trade? It's so obvious that the stock is going to go down or that the stock is going to go up." But then I always ask like, "Is it really obvious? Maybe there are people who have a completely different opinion and to them, it's so obvious that the stock is going to go the other way, hence why they would take that position." I think there's always going to be a market for this dynamic. That's why I don't think we're never going to lose an edge in the market selling options because there's always going to be somebody who has a different opinion from us and in this case, that different opinion just could be based on purely where they live, where do they live in the country versus the world. It's really, really interesting stuff. I encourage you to go through some of this stuff and just… Again, it's another food for thought type of show for me. Just keep this in the back of your mind that biases can be based on anything. They can be based on age, they can be based on schooling, they can be based on where you live in the country or what month you were born. I mean, there are so many different things that make up this market which allows us the opportunity to have such a dynamic and efficient market back and forth where the numbers work out time and time again because none of this stuff will ever change. It will just shift from sector to sector and company to company, but it will always continue to be there. These biases are never going to go away. It's just human nature. As always, hopefully this helps out and until next time, happy trading.

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we're going to be talking about why you'll never be great at something you only do once. I don't actually know where this came from. I had it written down on my notebook and I was just kind of reviewing it just the other day and I've scripted this out to have this call today and talk about it because I wanted to revisit this because I think it's an important topic not only for trading, but just generally, I guess. If you do know who is, I guess the author of this quote, let me know because I couldn't find it online. I tried to search. Usually that does the trick. But I don't know who said this first. But it's a great quote and it's really important on the options trading side because what I think I see a lot of people do is they try really, really hard and I respect this. They try really hard to understand the markets. They try really hard to get into their first couple of trades, setup their account and do all the backend kind of office admin stuff to get going. But then they only make one or two trades and they honestly give up very early in the cycle. Maybe they even make a handful of trades and then one single thing goes wrong, one thing goes bad, they have one bad losing trade or the stock doesn't move as perfectly as they dreamed in their mind and then they give up.

I think the reality here is that we've never seen anybody in any profession on any planet be amazing at something and they only did it one-time. If somebody is great at basketball, they don't just walk onto the court and they're magically amazing at basketball. There's years of hard work that preceded that. And so, the same thing could be said of options trading in the market or even just investing in general. If you want to be a great investor, if you want to build wealth and generate income, you can't do this one-time. You can't just walk onto this court and try really hard for a month and then say, "Okay. I'm done." It's got to be something that you commit to and is now part of your identity maybe moving forward, this idea that you want to be an amazing investor, that you want to be somebody who's a trader that generates income and you have to have a long-term commitment into this. That's what it's going to take because yeah, I mean, like the quote says, like you're never going to be good at something you only do once. [Inaudible] in trying to raise kids and you only had one shot one day to be a parent, it doesn't work, like God doesn't work like that, in my opinion. They give you years to learn how to raise kids and you have years to learn how to read and write and go through school because it's that repetition process that's really important, that builds on top of itself, that's a self-fulfilling prophecy in the sense that you're compounding your knowledge and your understanding.

I encourage you today to again, review and recommit to this business because this is a great business for many, many reasons. I love the options trading business. I think we even talked about it in one of the shows around 300 or so about like the top reasons why I love this business, but you have to do it on a consistent basis and we're helping you with that as we roll out and get closer to rolling out our auto-trading software and some of the tools that we have that alleviate some of the pain points that I know you guys have because I have them too. And so, hopefully as we get closer to that and we have the ability now to auto-trade option strategies, most of this stuff becomes very frictionless for you. And so, it's the idea about setting it up and consistently watching and monitoring it, but the actual day-to-day is going to be kind of removed from your hands. You won't have to go in and search for trades and manage trades and figure out when to take them off. It'll all be taken care of for you, but right now, you have to still press the buttons and click the mouse and that can be tough for some people. I encourage you again, like I said, just to recommit to it today. Make a commitment to get back into the business. If you've been kind of stalling or have been holding back and treading water and you're not really moving forward, do something today to move forward a little bit faster. As always, hopefully this helps out. If you guys have any questions, let me know and until next time, happy trading.