How I'm trading NFLX today

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Good morning, I wanted to provide an example of the daily watchlist for nonmembers of the $2,000 Small Account Journey.

So here’s today’s newsletter highlighting the win on TSLA Tuesday. NVDA’s open trade analysis and how I plan to trade NFLX today. Of course all trades are alerted to your smartphone moments before I enter and exit, should you subscribe to the New Year’s $499 unlimited subscription.

Let’s start Wednesday morning examining the Theta (time) decay of Tuesday’s TSLA win. 

Out of the money stock options have $0 intrinsic value. Their pricing is only made up of extrinsic value or what we call time value. 

From left to right, here’s TSLA option prices decaying from entry to exit to market close.

TSLA never fell below the sold strike of $252.50 which means the short options benefited from the passage of time. 

I like to use a bucket of water with holes in it to visualize the time decay.

After Tuesday’s quick win on TSLA I entered NVDA bull puts expiring this Friday. I went with the trade based on the 10-day EMA strategy and ascending triangle chart pattern. 

Any new trades are likely to have an expiration of next Friday January 5. I would like to get back into TSLA -$255 / +$250 short put vertical spread for $1.50, if it were to dip. I’m also watching NFLX -$485 / +$475 short put vertical spread for $3. Both noting the 10-day EMA strategy. NFLX already broke it’s ascending triangle making $480 the new base trade area before it likely climbs again. I lean toward the NFLX trade next.

Balance: $2,000 - $8,105 or 305%

Dates: November 13 - present

Win Rate: 25 wins out of 27 trades

Benchmark: 2 or 50% allocation

Benchmarks:

1. $2K-$5K 100% allocation to get the account up in value fast

2. $5K-$10K 50% allocation (up to 2 $2.5K-$5K trades open at a time)

3. $10K-$20K 25% allocation (up to 4 $2.5K-$5K trades open at a time)

4. $20K-$100K 15% allocation (up to 7 $3K-$15K trades open at a time)

5. $100K+ is 10% allocation (up to 10 $10K+ trades open at a time)

Master cheat sheet

Daily watchlist

Current balance

Historical journal

Community chat room

Video lessons:

• Overview

• Workshop 1

• Workshop 2

• 7 selling advantages

• 10-day EMA

• Refresher course

• Stop loss strategy

• Keltner Channels

Guidelines:

• Tickers: best co’s in world, earnings winners, strong guidance

• Order type: bull put (neutral to bullish i.e. good co’s tend to go up)

• Target entry: 1-2 strikes below price and defined by technical analysis (sell below big support to boost odds)

• Entry (credit) goal: 30% of the spread width i.e. $10 wide = $3, $5 wide = $1.50

• Exit (debit) goal: 30% if achieved on day 1-2, otherwise 50% of the credit

• Stop loss strategy: defined by sold strike (conservative) or bought strike (liberal) 

• Allocation: starts at 100% and works through 5 benchmarks to diversify risk as the account grows

• Expiry: 2-3 weeks from expiration (conservative) or 5-7 days from expiration (fastest rate of decay)

My strategy or edge stacks probability. Just like bookmakers (DraftKings), casinos (MGM Grand) and insurance co’s (Geico) do daily. 

$2,000 Small Account Journey probability stack:

1. Great companies like Apple trend up over time

2. Short put vertical spreads have high probability of profit

3. Focusing on earnings winners increases odds

4. Short put vertical spreads have 3 ways to win

5. Bullish chart patterns and 10-day EMA allows for precision entries

6. The buyers put options decay the fastest 5-7 days before expiry

7. Taking 30-50% wins quickly increases odds of winning

I want to point out that I cannot speak for my members’ performance, as results may not be typical and trading is HARD. And I cannot guarantee you will make money. But what I can guarantee is that I will work my BUTT OFF to teach you WHY I trade WHAT I trade.

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Jason Bond

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