Hey everyone, Kirk here again and welcome back to the daily call. On today's call, we're going to talk about the one thing that you have to do if you want to grow your portfolio faster with options. This is probably a hard concept for some of you because I know the type of person that you might be. If you're listening to this podcast, you're usually well-educated, you're usually well-motivated, you've got a lot of high ambition, you're very much probably like me because you're listening to this and you've gone this far in our training or in our courses, etcetera. But here's what you've got to do and this is what a lot of people I think still miss in this business or really, just in life in general and any area that you want to interchange options trading in. But you've got to slow down to speed up. That's a hard concept to understand. I want to try to explain it maybe with an analogy that might help out with like a little case study. But back in school, what we learned all the time (you often do learn this) is that the assembly process or the assembly line is usually the most efficient. You connect part A to part B then you move on, you connect B to C, etcetera. What people often do is they try to batch a lot of their stuff. This is a problem because what happens when you batch… Let me explain what batching is. Batching is you connect part A and B together and you do it a hundred times. Instead of working through the entire process of let's say building a widget from start to finish once, all you do is connect part A to B a hundred times. If you've got a hundred widgets you want to basically build, most people would say, "Connect part A and B and do it for all of the widgets, then move onto the next step and do step two for everything, then do step three for everything." You batch these little processes or these little workflows together.

The problem with that… Most people assume that that would go a lot faster. The problem with that is that if you make a mistake later on, you have wasted time connecting part A and B and maybe that wasn't the right thing that you should've done. Maybe there is a tweak to how you should connect it that you never really realized what happened until later on, that if you actually work through the process of building the widget, you would've figured out later on that maybe connecting part A and B should've required more glue or should've required a tweak to how you did it. But now, you've got a hundred things that you have to go back and redo. Does that make sense with that whole batching process? This is why people I think are not successful for the most part with trading options because what they end up doing is they end up trying to batch a lot of their education into very, very tight periods of time. They try to learn and cram all this stuff in like, "Okay, I got to do this, this, this, this, this, this, this." They try to do this whole system of training and education in a very short period of time and what they're really trying to do is just check boxes. Checking the box only gets you so far. "I completed this." only gets you so far. It's not about completion. It's about understanding. Did you understand what you actually were trying to complete in that course or the video or the trade example? What was the lesson in there? What was the takeaway? What's something that you don't understand that you still have to maybe slow down and understand before you can move forward and go faster?

The end result here is that when you're actually… In the example of building out widgets, if you need to build out a hundred widgets, it's actually faster initially to slowdown and build one or two or five widgets all the way through to completion to make sure that you've got your process down in its path and it's streamline and easy, there's no hiccups, you can get all the way to completion. By doing that, you build less widgets initially, meaning you are not as fast as the other person who's doing all this batching of their… they look like they have more activity because they've got a hundred parts connected for step one and you're just still completing that first widget all the way through the process. But what ends up happening is you end up catching up to them because they have to go back and adjust, they have to go back and tweak or undo or redo all of the widgets that they built. I constantly see this all the time. I see people who just rush through all the training and they email me and they're like, "Kirk, I completed all the training in a week." I'm like, "There is no way you completed all of that in a week. You might have checked all the boxes, you might have clicked through all the videos, but you didn't retain anything in one week. That's like getting a college education in one week. It just doesn't happen." You have to slow down in this business if you want to speed up. You have to be the tortoise, the turtle, whatever analogy you want to use because you have to understand a concept before you move forward. What I always tell coaching clients when I get on the phone with them… I get on the phone with a lot of people and they end up talking really, really fast and they're really excited and I get that, but they go through concepts and I take a step back and I'm like, "Wait, wait, wait. Let me make sure you understand what that is. Again, explain what Delta is to me." They really can't even explain it sometimes or whatever the concept is that we're talking about.

What I think you should do in your options trading if you want to grow your portfolio faster is slow down, really understand the concept then move forward to the next concept. It might take you for some concepts, a week. Here's a concept that you should really understand. You should really understand how our edge works in the market with implied volatility. That's a hard concept to understand. You can't learn that in one single video and just check the box. It might take four or five different videos. It might take a couple of examples, watching a webinar about it. But then once you understand that concept and you really master it, then everything else can fall into place, so then you can check that box and move onto the next one. It might feel like you're not going as fast, but believe me, when you understand and master some of these concepts, really, anything in trading or anything in life and you really understand them, then you can move onto the next thing, you don't have to backpedal. That's what kills people, is the backpedalling to re-understand something that they thought they learned previously. Hopefully this helps out today in getting you on the right path in understanding how you can use not only training and education, but this thought process of working through these workflows can help you get to where you want to go just a little bit faster. As always, if you guys have any comments or questions, let me know. Until next time, happy trading!

Hey everyone, Kirk here again and welcome back to the daily call. On today's call, we're going to talk about when is an options contract expensive or cheap. This is all relative. That's the first thing you have to understand about being expensive or cheap. It's all relativity. I use the real estate analogy all the time when it comes to option pricing. But let's say a one bedroom apartment in New York, if I told you that that piece of real estate was priced at $25,000, you would say, "Holy crap! That is insanely cheap!" Because houses and apartments in New York are really expensive, so if you find one just randomly for $25,000, not that it would happen, but just to prove the point, you would say that that's insanely cheap. Now, in my area where I live, in Pennsylvania, if you find a house for $25,000, it's not necessarily cheap, but it's not expensive either. It might be the middle of the road for some areas because we just live in a low cost blue collar area and that whole concept of being cheap or expensive is relative.

Now, when it comes to options trading, we can use implied volatility to give us a sense of whether options are cheap or expensive. Generally, when implied volatility is high… You can figure out what implied volatility is and get charts of it on most broker platforms. But when implied volatility is high, then option prices are generally expensive. The reason that they're expensive is because the market is expecting a big move in either direction or market participants are expecting a big move in either direction, so they bid up the value of options on both side to compensate for this potential higher move. Now, on the other hand, when implied volatility is really low and market participants are not expecting the market to have big swings in either direction, then option pricing is seen to be relatively cheap. You don't have to pay a lot of money, but you also might not get the big moves in the underlying stock that you expect.

What people often do is they often buy options during periods of low implied volatility, assuming that the market is going to have this big breakout period, but the problem is we just don't know when that breakout period is going to happen. When is the market going to have these huge moves and huge run-ups in premium and prices or huge rundowns? We don't know. Is it going to be two months out, three months out, four months out? Right now at the time that we're recording this podcast is a great example of this because we've gone through now years of generally low volatility and many people have probably lost a lot of money buying options, assuming the next crash is right around the corner, but then it's not and then they buy options, assuming it's next month or it's the month after. You can see how this thought process could lead people to losing a lot of money buying options.

The end result here is that on some level, option premiums are always a little bit expensive and they are always overpriced by some margin long-term. Does that mean that buying options doesn't work? No. In some small cases here and there, buying options works. But if you're going to be a consistent income trader, then selling options when they're relatively expensive ends up being what you need to do. What we say and the way that we run our system because of all the back-testing and research that we've done, is that when implied volatility is low, that doesn't mean that option selling doesn't work. It still does. It still generates a positive expected return, but the edge is much smaller, meaning that the overpricing in options is much smaller when implied volatility is low. Does that mean we stop trading? No. It just means that we scale down or pull back our position size dramatically. We keep more cash available. We don't invest in a lot of securities. We try to keep a very light and airy portfolio with just a few tickers here and there and a good mix and diversity.

Now, when implied volatility expands and option pricing goes dramatically higher, we get a lot of volatility in the market, maybe a market crash, mini crash, correction, whatever you want to use as the catalyst for higher volatility, at that point, then we actually want to aggressively go into the market with bigger position sizes, end up holding more ticker symbols, a wider variety of ticker symbols. We want to do all of the things that become more aggressive towards selling options. That's counterintuitive for most people because most people, when the markets are really crazy and volatile, they end up taking a step back and they end up pairing down. But without a doubt, what our research has shown is when the markets become more volatile, that is the opportunity to generate much higher returns, better win rates, better sharp ratios, everything, lower losses. It ends up being periods where you have smaller drawdowns with high implied volatility selling options. It's absolutely when you want to get into the market just a little bit more.

Again, to just wrap this up… When is an option contract expensive or cheap? You can basically use implied volatility as your gauge for relative cheapness or relative expensiveness of an option contract, but ultimately, all option contracts are overpriced by some margin because of implied volatility. As always, hope you guys enjoyed this. If you have any questions, let us know. Until next time, happy trading!

Hey everyone, Kirk here again at Option Alpha. In today's daily call, I want to talk about why I think running Option Alpha actually makes me a better trader. This is a topic that I often think about all the time because frankly speaking, I don't need to run Option Alpha and I have not needed to run Option Alpha ever. It's always been a love endeavor for me. It's a passion endeavor to talk about trading and to teach trading and to help people out and see people become successful and quicker jobs or whatever the case is, pay for a college or pay for a wedding. I've seen so many different case studies in the past, almost 10 years now that it really helps still motivate me. But I definitely believe that running Option Alpha and everything that goes into it has made me a better trader for sure, not only because… I'll take it maybe in two stages. That might be the best way to go about this in this daily call because it's a topic I think about a lot. I'm probably sure I could probably rant for like 25 minutes on this, but I don't want to. I think I'll take it in two stages.

First is I think that running a business like this and a website business like this is important because it helps me focus not only on the big picture, but also on little details. I'll give you an example of how this helps me. I realized that in running the website that I want to get more people hearing our message. I want to reach more people. We don't do practically any advertising and really haven't done that for a long time. It's all word of mouth. It's all just converting people and doing great content. Part of that is figuring out what works to progress people along. Awhile back, we just had a lot of course modules and then we released tracks and within those tracks, we tested around lots of different styles of course flow and course work and how long videos were, etcetera and many of you guys probably didn't even see it on your end because you may have seen one version, but not the other. But we're tweaking things all the time on the back end, as far as optimizing how you get through and what you complete because ultimately, I want you to complete all the videos and then move to the next stage, complete track one, then two, then three, etcetera. We're always tweaking things on the website and for me, that's cool, I like that. I enjoy tweaking those little details that are working towards a higher level goal of getting you to progress in your education, trying to figure out how long is one of our tutorials' words, too long that you don't actually watch it, but too short that you don't actually consume the right information. That's stuff that we're constantly monitoring and optimizing.

Now, on the trading side of things, that makes me better because on trading, now I have taken that same thought process and logic and applied it to what you guys already see in the software and the research that we do. When I started tweaking the website to improve how fast and how much you guys consume as far as education, I started asking myself questions like, "If this works in options on the website, why doesn't it work in options trading? Are there tweaks that I can make to a strategy, maybe just very small tweaks that I can make that would make an exponential impact?"

This is ultimately where just this whole thought process around the trade optimizer and the back-tester came out of, is I wanted to know at a certain time period and with a certain implied volatility level like what was the best strategy. Just like I wanted to know what's the best video length on average for people to watch that they don't quit at the end of the video, but that they actually consume the information. Like what is that optimized point, just to use that video tutorial analogy. We transferred that same logic and thought process over to options trading and asked the same types of questions like what is the best setup for an iron condor if you're 30 days out versus 40 days out. If implied volatility is 50 versus 25, what do you do different, (if anything) so that you really, really optimize it? I think that having that same thought process has really made me a better trader because it's hopefully made a better business owner running this website for you guys as an educator. But it's also made me a better trader because I started asking harder questions that need time to be answered and start implementing systems and processes to get those in place. For me, it's all about that aspect of it.

The other thing about running Option Alpha that makes me better is accountability. I talk about this all the time and I'm sure I'll talk about it a zillion times with this daily call podcast because I think it's really important, but you have to be accountable to somebody. For me, this has been really good because I have to be accountable to trading and it creates a habit and a routine for me of trading and doing it the right way because I've got 60,000 plus people always watching my every move, scrutinizing what I do, asking questions, adding comments, telling me, "Hey, why didn't you do this? Why didn't you do this?" Of course, I'm not a perfect trader by any means and all the feedback helps me and gives me feedback as to different ways of looking at things that I may have never seen or helps me reinforce the concepts that I believe in and that I've researched and have data on because then, I have to say it again and again and again. I have to explain to somebody why we trade during low implied volatility again and again and again. That helps me become a better trader because ultimately, it reinforces these concepts in my brain and in my logic and thought process and ultimately carries through with my trading.

For me, Option Alpha like I've said time and time again, if you haven't heard me say it, it's really a passion business for me and I think it comes through in what we do. We try to do everything really, really well. I don't want to be a fly by night company and we've been around for almost 10 years now which is crazy and I think that it's really important for us to continue this journey that we're on and with you guys hopefully and lead you guys in the right direction and evolve together. That's really why I like still doing this. I plan to be around doing this for a long time. I'm still fairly young, my girls are still fairly young and this is something I truly, truly enjoy. Hopefully this helps out. As always, if you guys have any questions or comments, let me know. Until next time, happy trading!

Hey everyone. Welcome back to the daily call. On today's call, we're going to talk about trading options with Thinkorswim. I think it's just a big topic that a lot of people search for and so, I want to give my feedback and advice on Thinkorswim platform. I've been with Thinkorswim just as a background for a long time, pretty much since they opened up. I dare to say I was probably one of the first 50 customers that they had. I literally signed up when they had three web pages. It was like a homepage, the sing up page and then the legal description page. I've seen a lot of iterations. I've gone through Thinkorswim going public, getting bought out by TD Ameritrade and all of those changes. At the end of the day, I still think that the Thinkorswim platform is by far the best one for options traders. Now of course, this only really benefits you if you're in a couple of different countries and mainly the US. I think that the technology is great. I think it's pretty fast. The mobile responsiveness of their app is really, really good. It's actually really improved in even like the last year or so. I consider it really like the jet cockpit of options trading. For that reason, I definitely suggest people go over to Thinkorswim. We are definitely a big supporter of Thinkorswim moving forward.

Here are some of the drawbacks that I see to the Thinkorswim platform though. I think it's too much and can be confusing to some people. There's a lot of moving parts because they basically can do everything. They can do stocks, they can do options, futures, Forex, you name it. It can all be done from one platform. Now, while that's great and that gives you a lot of different variety or options, (no pun intended) I think it can be confusing for people because there are so many different buttons to push and like I said, it's a jet cockpit. It's like you don't want to push some buttons, but you kind of want to push a little bit of everything. For that reason, I think it's a little bit confusing. I think to some degree, it's a little bit antiquated still. I think design wise, it could obviously improve its very block and column formatted as far as layout. Other broker platforms that we've seen definitely have a much better appeal, much better UI, UX design, interface for users and I think that eventually, Thinkorswim knows they have to overhaul that, but they're not in any rush. They've always been focused on speed and efficiency and the tools, not necessarily the design of it. I think that's a drawback for me. If you're going to stare at something all day, it should look pretty good. That's why we focus so much on Option Alpha, just the design that we have because if you're going to be in there and trading all day or basically going through our courses for a couple of weeks, it should look good.

I think another drawback to Thinkorswim on the outside is the commission structures. When they were bought out by TD Ameritrade, TD basically jacked up the commissions for new accounts. We've talked about another weekly podcast on our main show this ability for you to actually get your commissions reduced which I still think is present. You can still get your commissions reduced by far and a lot of people do. Whatever they're charging right now publicly, (I don't want to say because it may change in the future based on when this podcast goes out) I definitely think that you can get your commissions reduced dramatically. Even going over to a different broker if you need to or suggesting the commission structure of a different broker, I think it's not out of the realm of possibility to get your commissions cut by half or 80% or 90% in some cases based on what you sign up with. While that's a drawback initially, it can be overcome and they are pretty flexible about doing that as long as you basically commit to them. That's what I tell people all the time with broker commissions, is that they're not just going to cut your commissions for no good reason. You either have to show commitment with frequency of trades that you do for a month or two or with the account size that you have by transferring more money or opening up more accounts. You have to show some sort of commitment to them and that's really only fair.

To wrap things up, if you're trading options over Thinkorswim, it is really kind of the MACDaddy of options trading and that's really what you should be on at this point. We'll talk about in future podcast here what we plan to do as we potentially maybe even transition away from Thinkorswim in the future. Though right now at this exact moment, I don't see us going anywhere at least right now. We'll definitely be on Thinkorswim for a little while longer. If not, we'll definitely have the account open, regardless of where we try to transition ourselves in the future. As always, hopefully you guys enjoyed this. If you have any comments or questions, let me know. Until next time, happy trading!

Hey everyone, Kirk here again at Option Alpha. On today's daily call, we're going to talk about why most investors actually act like toddlers. This actually came out of just (I don't know) being a parent. I often relate investing a lot to parenting. I think actually, parenting has taught me a lot about being patient, being calm the long haul basically because you can't get them back obviously and a lot more stuff about investing in life obviously by being a parent, especially if two girls I guess right now, I'll learn even more when they become teenagers. But I do think that most investors, most traditional investors (we often probably find ourselves in this mode a lot) act like toddlers. The reason is because we overreact and for some reason, when it comes to money in the markets, we can't control our emotions. It's like my kids. My two girls are young. I have one who's almost four now and then a toddler who's like 18 months. Our toddler, our youngest, Anna, she has a really tough time right now controlling her emotions which is part of just her developmental process and as her father, I have to be there to help her understand what anger is, what being mad is, what being happy is and coaching her through that process as much as possible. But she just has a really tough time. These emotions come over her just like waves and there's something she could do about it. I mean, she's not deliberately trying to be mean or malicious or anything. It's just how it happens or reacts. I feel like people often and traders in particular when it comes to their account and their money, they have a bad trade and it's just like this overwhelming wave of emotions that come over them and even so when they have a good trade. They have a good trade that works out really well and it's just this overwhelming emotion of like, "Man, that was awesome!" and they feel like now they're invincible which is also the opposite end of the spectrum of feeling like your crap doesn't stink basically.

I think that we have to learn how to control our emotions on both sides of the tape when we're losing and also when we're winning. Act like we've been there before. More so when we're losing that if we have a losing trade to not give up, to not let the emotions take the best of us. At the end of the day, we're all adults now. We're not kids, we're not toddlers. We should act like adults when it comes to investing money, realizing that there is a potential to lose money, but also that without risking money, we don't have any potential to make money. But hopefully as your guys' coach or mentor, however you want to see me in doing this podcast and doing Option Alpha, I'm here and I'm trying to act like the person who's been there and done that before for the last eight, almost nine years now in doing this because I want to show you guys that if we have a losing trade, I'm still going to be here, that if we have a winning trade, I'm still going to be here. I'm not going to let my emotions get the best of me and just quit. I'm going to stay consistent, stay persistent in keeping up with it. Hopefully this thought process helps you out. If you're a parent, you can definitely relate to this today, but I do feel like most people who get started in this really act like toddlers and they should grow up and act like adults and really try to take control of their emotions or at least recognize when they're getting the best of them when it comes to trades. Hopefully you guys enjoyed this. Until next time, happy trading!

Hey everyone, Kirk here again and welcome back to the daily call. Today, we're going to be talking about examples of options trading. This is a topic that comes up often and I get some variation of this when I get emails from people, when people leave me voicemails, but they want to see more examples. What we actually did a long time ago and we've continued to update this pretty much every other week, we add just another batch of trades to it, is we've had this board of live options trading videos. Although I don't want to ever do, nor do I have the time to actually consistently every single day say between 11:00 and 12:00 or whatever the case is, I'm going to make live trades because I just don't know if I'm actually going to get filled, I don't know if my kids are going to be sleeping or whatever the case is. What I have done though is I have just started to hit record on my screen and then I just go through a trade. I make a trade start to finish, from analysis to picking out the strikes, the month, pricing it, getting it filled, sitting around, waiting on screen to get it filled because that's sometimes what happens. Sometimes it gets filled right away, sometimes we're there just waiting for it to get filled for a little bit before it gets in.

But I think this is probably the best representation online for sure of anybody just doing a bunch of live trading. We've added this to the website and it's actually been up there for a while now, but I just wanted to explain what it is because I think it's really, really valuable. It's all free, by the way. You don't have to pay anything to get it. It's just part of what we offer at Option Alpha. But any time that we make trades and I record those screens of it, we'll post them up there. There's everything from opening, closing, adjusting trades, trades that were winners, trades that were losers, trades that were scratches, meaning we didn't make any money or lose any money or maybe was near expiration. We've also gone through assignment of stock on there, basically recording videos right after we get assigned stock and how we deal with it. We've done credit spreads, calendars, iron condors, iron butterflies, straddles, strangles, diagonals, the whole deal. It's all literally up there. We've got a couple of dozen right now, I think like 60 something videos up there. We're going to add another batch of about 60 or so here in the next week or two.

We're just literally constantly going to pad this thing with as much information as we can, so that you guys can see in real-time how I go through it. I walk through the whole process on the screen. You can watch over my shoulders to some degree and watch us make trades. Really, that's the best way you learn. That is probably one of the best ways that I would potentially learn how to trade options, is just watching somebody do it and getting familiar with it. That's like going in, learning how to build a house. You don't just read how to build a house online. You go and you watch somebody build a house. You see what they do and how they swing the hammer and where they put things. That's probably the best way that you can learn. That's why we put this thing together. Again, head on over to the website, just search "live trading" or head on over to the education section. It's all in there. It's all free. It will always be free for you guys to use. The only thing that we ask is just again, if it's really helpful, let us know or share it online and help spread the word. Until next time, happy trading!

Hey everyone, Kirk here again and welcome back to the daily call. Today's call, we're going to talk about average preparation yielding less than average results. I do have a bone to pick with some people who say average preparation yields average results. I may have even misspoke before when I said that, but I truly believe actually that when you do something average, it actually yields less than average results. I'll tell you why I think this is so important because I think too many people… Myself, I've been caught up in this before and I try literally every single day. I read the same list of affirmations every day and thought processes in the morning before I do anything else. The reason I do this is because I want to elevate my state to a level or an understanding that I want to be more than just average. I want to be way more than average as far as a trader, as far as a business owner, a guy who runs a website education company, a dad, a father, etcetera. I want to be way more than average in all that. But average preparation is going to get you exactly what you're expecting. If you put in 70% effort, you're going to get 70% or less of the results that you're expecting. I say you're going to get less because you failed to put in more effort.

The only thing that you can actually do to improve any state that you're in right now or anything with your trading, with your life, whatever, the only thing you can do that you totally, totally have control over is your effort. Literally, that's the only thing you can do, is how much effort… People call it hustle, I just call it effort. How much are you going to put into it? If you're not where you want to be right now, it's 100% your fault, 100% your fault. I know it is my fault. In fact, one of my affirmations I read every day says like, "It's my fault for it to be successful or not or to be exactly where I want to be or not. If I am not a good father, it's my fault. If I'm not a good husband, it is my fault." Until you take that ownership and understanding that it's 100% your fault, if you're not exactly where you want to be with your trading or with your knowledge of the markets or with your knowledge of a particular strategy or whatever aspect of life you want to be in, you're never going to improve. You have to almost put forth above average exceptional effort to get really, really, really good results. You have to put in as I say, 100%... I don't know if I believe the 110% effort because you could really go 100%, but I think that many of us are going 50% at best, 50% effort in what we're doing. We're putting in enough effort to say, "I tried" but not enough effort to be accountable to ourselves to put in enough effort to say, "You know what? I'm going to put in so much effort here that it's almost impossible for me to fail." That's really what it comes down to.

We're just like dabbling. We're just like touching our toes in the water and saying, "I tried to get in the water and I just put my toes in, but I really didn't make a concerted effort to do it. I didn't put myself at enough risk or put myself out there enough to actually be vulnerable enough to be successful." I think that that's challenging for people. If you prepare like you're just going to get average results, you're going to get less than average results. Most people in the trading business or even in the investing business, they don't care and they put forward average effort into understanding the markets, understanding what investments or what trades they're going to go into and then they get mad when they get average results, when their portfolio doesn't grow or they don't make enough trades and then they have a string of losing trades and they get mad at me or whoever else because the information was wrong or the market didn't participate. You just didn't put forward enough effort to understand what actually works and what doesn't. You didn't put forward enough effort to understand how to adjust that trade when it went bad. That's on you. That's not on me. If you want average results, just prepare and go through things methodically and with a "no can do" attitude, just average preparation.

Hopefully this motivates you a little bit. I know it's something I think about all the time, is I want to put forward way more effort than it's probably required in everything that I do, so that the result is exactly what I want or better. I've never been the type of person where I'm just going to put forward half of the effort. If I'm going to do that, I'm just not going to do it. I'm either going to do something all the way or I'm just not going to do it. Hopefully that helps out with you again today, trying to motivate you a little bit in this psychological battle that we have with trading and investing and just running our life. If it helps out, just let me know. Until next time, happy trading!

Hey everyone, Kirk here again at Option Alpha and welcome back to the daily call. Today, we're going to be talking about trading options near expiration. Now, I have to warn you, as I probably will in the future for a lot of these calls that my kids are sleeping right now, so this is done literally in the middle of the day and if you hear random screams or movements, that's just her in the background waking up because she could wake up at anytime and it's like a time bomb going off when they do. Those of you who are parents, you know that.

Trading options near expiration, I think there's a couple of things that we want to just touch on with trading options near expiration. One, we know that as we get closer to options expiration which is usually the third Friday in the month for monthly expirations, weekly expirations expire every week, that as you get closer to expiration, your risk of assignment especially if you're in the money goes way up. Really, it's that first couple of days. Actually, expiration week, your risk of assignment goes up, so the Monday, Tuesday of expiration week, if options expire on Friday. But then really, as you even get further into expiration week itself, Thursday and Friday, then obviously the assignment risk goes dramatically higher like parabolic. Now, we don't have exact numbers from the OIC or the OCC, but we know that that risk is much, much, much higher.

What I always suggest you do is you obviously adjust, manage, hedge, do whatever you want to do the month of expiration that you're working in. If you're working in September, then you make sure you make your adjustments in September. Give your stocks and options enough time to actually move as you're heading towards expiration, but once you get into that expiration month, then you want to start thinking about it and start analyzing adjustments. When you get into expiration week and actually trading options near that expiration date, you want to be more diligent in closing out positions that are profitable first off. Take money off the table, take winners off. It doesn't have to be a full winner. If it didn't hit a profit target, but it's still profitable, if you're in expiration week, take that thing off. And then second, closing out positions at first that are deep in the money, so anything that's really not profitable. If you sold a call spread and the market moved way up, it's probably not a high likelihood that the stock moves way down in two days. Get that position off, buy it back, close it out, so you remove the assignment risk.

Then what you're left with is you're left with any positions that are in the middle, they're kind of dancing around breakeven, small profit, small winner, etcetera and you want to take those positions day by day because at that point, if your options are in the money, but just in the money by a dollar or a couple of cents, there's probably not too much risk that you're going to get assigned because it could go either way. But as soon as it starts going deep in the money, you want to close the position. What I always suggest is take those positions that are neutral, meaning that they're not making a lot of money, not losing a lot of money, they're still undecided if you will and take them day by day. If the market moves favorable one day, take it one more day. But as soon as it moves against you, you just want to take that position off because we want to remove that assignment risk.

The last thing of course that we'll talk about is of course, you can get assigned during these periods. That doesn't mean that because most assignment risk is on Friday that you couldn't get assigned early on Monday. We've always done podcast and have video training on how to manage that. But that process is totally manageable. It's not going to kill you. Even if you have a small account, you can definitely deal with it. You just want to close out of any stock that you are assigned either long or short. That's the real key of it, is if you don't want it, you don't want to hold it, don't have the capital to hold it, just go ahead and reverse the trade. Brokers lets you do this even if you don't have the capital to do it because they know they want to reverse the trade and close out that stock that same day. Hopefully that helps out. As always, if you have any questions, let me know. Until next time, happy trading!

Hey everyone, Kirk here again and welcome back to the daily call. Today, we're going to be talking about trading options in an IRA. I think the real quick synopsis around this just to answer this as quickly as possible really because we don't need to really harp on it too, too much. But trading options in an IRA is definitely something you can do. You have to get broker approval to do it and that means just getting the required options level for brokers to be able to do it. Most of the time, they'll allow most people at a level one or two which means you can trade some covered calls, some covered puts. But you do want to try to get those higher option approval levels that allow you to do spreads and even to do complex strategies, iron condors, iron butterflies.

The thing with any IRA or retirement account is that most of it has to be risk-defined. You will probably never find a broker who will allow you to do naked trading, meaning a single short put option or a single short call option in an IRA or retirement account, but they will allow you to do spread trading. Anything that you can accomplish with options, you can basically do in an IRA as long as it's risk-defined, that you have defined risk and defined profit. Now, for me… Because I do a lot of my trading basically naked with straddles and strangles, really the majority of it, maybe not a lot of it or it's definitely not 90% of it, but the vast majority, we do straddles and strangles and those types of trades. You can basically synthetically create those types of trades in an IRA by just purchasing far out of the money long options on either end for very cheap, $5, $10 on either end. If I were to sell a straddle for say $250, you could convert that into an iron butterfly and sell the same straddle that we're doing for $250, but then you use part of that $250 credit to purchase long options on either end, far out of the money puts and far out of the money calls and maybe you spend $15 on those total. Now, you just take that net credit difference. I would generate a little bit more money, but I'd also have a little bit more risk because I'm doing it undefined risk as you would also have defined risk on your trade. But it would be something you could do in an IRA account.

This is also something that we do with part of our trading alerts under the pro and elite membership. Whenever I send out a trade and if it's an undefined risk trade like the straddle example we just gave, I will also give out the examples and suggestions of which strikes you can buy or which strikes you can sell to create a risk-defined position. That way, no one is left in the dark. I obviously recognize that I don't do those, but I know that people do and that's why we setup our system and our alerts to do that. As always, hopefully this helps. Until next time, happy trading!

Kirk: Hey everyone. This is Kirk here again. On today's daily call, I just invited my wife over and I want to ask her a question.

Emily: Oh, okay. Hi. I did not know that this was happening. I thought you wanted to show me something.

Kirk: Yeah, I want to show you that I'm doing a recording now and you're going to be part of the podcast here.

Emily: What's up, Option Alpha peeps!

Kirk: That's so ridiculous. Okay, let me ask you this. When it comes to investing, what's the most important thing? Like any investing, what's the most important thing somebody can do?

Emily: Something that they can do or something…?

Kirk: I don't know. When I say to you like what is the most important thing in investing because you had invested in real estate. You do all of our real estate stuff and I soundboard all of my stuff from you, so what's the most important thing that people can do in investing? I know. You got a show on the spot.

Emily: I'm nervous. You have me on the spot because I want to be Switzerland and not make any kind of comment.

Kirk: I know that. I know, but you have to though.

Emily: I know. I think the most important thing you can do is to educate yourself in that avenue. I'm going to just split this up into two because you know me and I can never make up my mind.

Kirk: So, two most important things.

Emily: I think the one thing that you need to do is educate yourself in the manner which you're going to invest. Don't just blindly wake up one day like I know, even though Kirk is a big options trader, he has tried to teach me many times and I still…

Kirk: But you know nothing.

Emily: I just know he relates it to insurance contracts, but I'm not even really sure what that means.

Kirk: I've tried to tell her to go through the tracks, but she doesn't do it.

Emily: Yes, I don't have time right now.

Kirk: Yeah.

Emily: But I would say I would never just jump in and start throwing money into options trading because I don't understand it and I don't know it, so I think you need to educate yourself in whatever avenue that you want to go. I think when it comes to actually performing or putting your money into something, I think you really have to pay attention to the return and what is it going to yield you and how risky of an investment is it.

Kirk: Would you say that if something is going to yield you a lot of money, but it's really risky, would you do it?

Emily: Myself?

Kirk: Right.

Emily: Probably not.

Kirk: Okay.

Emily: But there are people out there who are riskier than I am.

Kirk: What's the tradeoff then? Is it more important to…?

Emily: I like more consistent which now I feel like I sound like you. What's your little tagline? "Consistent, more profitable trades."

Kirk: Thanks. Thanks for making fun of my tagline.

Emily: I'm not making fun of it. I just happen to say it.

Kirk: That's okay. It's good. This is live.

Emily: This is why we do well with our investing because we both are congruent in the sense of we like maybe a little bit less, but more consistent.

Kirk: I was going to say – Do you think it's more important to make money or keep money?

Emily: Keep money.

Kirk: Yeah?

Emily: But you have to make money to be able to keep money, so there's a tradeoff.

Kirk: Okay, that didn't make sense.

Emily: Well, you can't keep money if you're not making money. Then you have nothing to keep.

Kirk: Well, yeah. I'm saying once you have it…

Emily: You have to make money in order for you to keep money.

Kirk: Well, once you have it, what's more important? Keeping it or growing it?

Emily: Well, growing is totally different than making it.

Kirk: Okay.

Emily: Growing it. You got to grow it.

Kirk: Yeah?

Emily: Yeah.

Kirk: See. This is why we work so well together because you are like a shark. I mean, you are very… Sometimes, sometimes can be pretty aggressive with investing and I have to pair you back.

Emily: Oh, I don't know about that.

Kirk: Let me go back to the first thing.

Emily: [Inaudible] real estate because I know real estate.

Kirk: No, no, no. Let me go back. This is a good segue. In real estate, you said you have to know what you're investing in. When you started in real estate and we have many properties before…

Emily: Okay. Now, you're making me look like a fool one.

Kirk: No, no, no. I'm saying when you started in real estate, you knew nothing about real estate.

Emily: I did and so, I…

Kirk: And you took it upon yourself to learn almost everything you could before we bought properties.

Emily: The second one.

Kirk: Right. Yeah.

Emily: The first one, I blindly invested, but I blindly invested because I had you who I knew, knew what you were doing. I didn't. I was just excited to renovate the property and do the interior design. But it was after we brought the first one and I started to understand and comprehend this whole investing and return and how that all works. That's when I took it upon myself to learn as much as I could because I didn't want to lose our money.

Kirk: Right. I know.

Emily: Not that you would let us lose our money.

Kirk: No. And you teach me things now by real estate that I didn't know, so that's good.

Emily: Yeah.

Kirk: Cool. Thanks for joining the daily call.

Emily: Oh gosh. I probably just…

Kirk: Well, see…

Emily: People go away like, "Who is this [Inaudible]?"

Kirk: No, no, no. Everyone has been inviting you on. Now, we get the first glimpse and we'll have you on and ask you more important stuff.

Emily: Yeah. Apparently, Kirk is going to have me on a podcast, but I don't know what we're going to talk about.

Kirk: We're going to be on a couple of podcast. Sounds good.

Emily: Okay.

Kirk: Until next time.

Emily: Happy trading!