Weekly Income Alert – May 16, 2025

“It’s Friday, Friday, getting down on Friday. Everybody’s looking forward to the weekend.” Remember that song about ten, fifteen years ago? Well, that’s for Angela, if you’re watching Angela. Welcome everyone to Weekly Income Alert. This is our first session. So glad that you are with us, and we have so many people here.

Numbers are huge. We’ve got Larry F in Durham, which is one of my favorite places in the country, Paul in Plano, Texas. We’ve got Russell, very appropriate name for what we’re doing today in Italy, all the way in Italy. So thanks everyone for joining us today for Weekly Income Alert.

I’m so excited to start putting money in your pocket every Friday and, frankly, in my pocket as well because I’ll be trading right along with you. So here’s how it’s gonna work. So, typically, you know, as this gets going, when we log on at ten o’clock, we’re gonna get right to a trade. You’ll see exactly what I’m doing, and you’ll be able to place that trade as well.

And then we’ll get to questions, and it’ll be, you know, a pretty kind of a compact thing. But since today is the very first time we’re doing this, I do wanna go over some housekeeping first, then we’ll get to the trade, and then we’ll get to questions.

So, the first thing that I wanna discuss is is I’ve been getting a lot of questions, you know, why the Russell? Do I have to trade the Russell?

Can I trade something else? So here’s here’s my answer to that. So in our backtesting, the Russell two thousand index was the best performer both from a win rate, perspective and the best return. So that’s why we’re sticking with the Russell. And some people wanna know, can I trade, you know, an ETF like IWM, which is the Russell two thousand ETF?

You can. You can do whatever you want. Here is why I recommend trading the index if you can.

There there are a few important reasons.

The first, as as I mentioned, had the best returns, had the best results. Importantly, when you trade a stock or an ETF and you’re short, so let’s say you’re short a put, that can be assigned you know, that option can be exercised at any time up till expiration.

Now if the put is out of the money, it’s not gonna be assigned. But if it’s in the money, it can be assigned at any time. So you could be put that stock at any time up until expiration.

Usually doesn’t happen until expiration, but it can happen, and it has happened to me. So, you know, it it the odds aren’t great, but it does happen.

With index options, that cannot happen. An index option can only be exercised at expiration.

So there’s no chance of being put the short position, you know, so if you’re short the index, you can’t be assigned, and have to lay out a a bunch of cash and still have this long position then that you need to unwind and figure out. That can’t happen with the index. It can happen with the ETF. Like I said, usually doesn’t, but it can. But with the index, it cannot happen. So the only time it gets assigned is at expiration.

Another benefit of trading the index option is taxes.

So when you trade options on stocks and ETFs, assuming that you hold it for less than a year, which most options traders do, and we certainly will be in this weekly income alert, you’re taxed at your ordinary income tax, rate. You know, you’re it’s a short term capital gain. You’re taxed at your ordinary income rate.

Index options have a a a weird little quirk.

Sixty percent of the capital gain is taxed at the long term rate. The long term capital gain rate, which is, you know, usually fifteen percent for most people. Forty percent is still taxed at your ordinary income rate, but sixty percent is taxed at the long term rate. So here’s what that means.

If you make ten thousand dollars trading options and you’re trading stock options or ETF options and you’re in the thirty two percent tax bracket, at the end of the year, you would owe thirty two hundred dollars in taxes. If you’re trading the index options, then you would also in the thirty two percent tax bracket, assuming a fifteen percent long term capital gain, you would owe twenty one hundred eighty dollars. So that’s a saving of a thousand dollars for every ten thousand dollars in capital gains. So that’s a meaningful difference.

You’re keeping a lot more money by trading the index than rather than an ETF or a stock.

So those are the reasons that I recommend trading the Russell two thousand index rather than the ETF if you can. Now when it comes to brokers, and and we’re gonna talk about this a little bit, every broker is a little bit different. There are actually some brokers that don’t even allow index option trading. So you’re gonna have to, you know, find that out with your broker and and make sure that that is allowed.

Most of the big brokers do allow it, but, there could be a situation where it doesn’t and you’d have to trade the ETF. If you do, that’s fine. It it’s not the end of the world. And and with the IWM, which is the, ETF for the Russell two thousand, it it corresponds very closely to the price of the Russell.

So if I’m suggesting, the twenty thirty put as a strike on the Russell on the, IWM, you know, that would be, you know, a two zero three strike or or whatever you can get that’s closest to that. So you’ll be able to figure that out pretty easily.

But if you can trade the Russell index, strongly recommend it.

Alright.

So, let’s get into the actual trade and how it’s gonna work. And we did have some questions about the symbol for Russell, And I’m gonna show you on my Schwab account in just a second. But one of the kind of annoying things with with the brokers is every broker has different symbols for the index.

Usually, for Russell, it’s r u t or dollar sign r u t. But if you’re trading a weekly, it might be r u t w.

So you you do have to find out what your broker how your broker listed. In fact, even within the same broker, depending how you’re trading. So, for example, I use Charles Schwab, and I’ll I’ll show you on the website, you use dollar sign r u t. And if you’re trading thinkorswim on their platform, it’s just r u r u t.

There’s no dollar sign. So, you know, you might have to reach out to your broker and find out exactly what the symbol is that you need, but it’s usually r u t, dollar sign r u t, might be r u t w, something something similar. You know? It’s not gonna be something crazy, but, you may have to play around or talk to your broker.

Alright. So let’s get to I am gonna share my screen.

Alright. Let me make sure you can see that. Alright. I see that you can. So, you log on to your account and this is on Schwab, and I went to trade and then options. So I had that up and loaded.

And like I said, on Schwab’s website, you go to dollar sign r u t. If you’re on thinkorswim, it’s just r u t. And again, on on Fidelity, Vanguard, the others, you you’ll have to reach out to them.

I’m not a hundred percent sure exactly how they list it. So I’m gonna select r u t.

Now here it says strategy.

So when you click on that, it says stock, mutual fund, options, call put, and then the spreads. So this is a simple spread. It’s a two leg spread because it we’re just we’re just gonna have two positions, a long and a short, and that’s called a vertical put spread. We’re selling puts.

We’re usually gonna be doing put spreads. If the market is, in a in a very pronounced downtrend, if it’s a bear market, we might may switch it up and go to call spreads, but for the most part, we’re doing put spreads. So we’re gonna click on vertical put, and when you do that, it automatically starts to set up the trade. And I like doing it this way rather than entering, you know, two separate trades, a a put and a, I’m sorry, a short put and a long put as separate trades because when it’s when you enter it as a spread, it’s executed at the same time.

And and as we get into the the pricing of it, you know, the the whole trade will be executed rather than one at a time. Whereas if you enter the trades, you know, one at a time, you may not get filled the way you want. The pricing might be different. So it’s just much better to have it as a spread.

Alright. So, we’re gonna go down here with this order type. The it defaults to limit debit. We want a credit.

We’re always getting paid for this. We’re never putting money out at the beginning. We’re always getting paid. So that’s gonna be a limit credit spread.

Okay.

Now, here’s the quantity.

So you enter the quantity of the the number of spreads that you wanna, trade. Now here’s where I was I’m talking about where where the the symbols get a little funky.

So you got the RUT, and here is the expiration. And it defaulted to today’s expiration, which is the monthly trade, you know, the monthly expiration.

If you click on this and you wanna go to a weekly, which is what we’re gonna be trading today, we’re gonna be trading the June sixth expiration, you see that it’s not listed here. On Schwab, r u t only shows the monthlies.

So you have to click on this symbol and go to RUTW.

Okay. When you do that then this drop down menu has all of the different expirations, so we’ll go to June sixth. Now as I mentioned if you’re on Schwab’s Thinkorswim platform and you put in RUT in the trade tab, you’ll see all of them. You don’t need to put in RUTW.

In fact, I think if you add the w, I don’t think it will work. So we’re gonna add put the June sixth.

Now really, really important.

You can see here where it says d r, that’s a a debit. When we’re trading vertical put spreads we always are getting paid.

And in order to do that the sell, the short put has to be lower I’m sorry, it has to be higher than the long put.

Okay?

So we are going to trade, because we want this to be out of the money.

We don’t want we don’t want this to be assigned. Now if we if we traded it very close to the money, we’ll get paid more.

But we don’t we don’t wanna get assigned. We don’t want this. We we want there to be a very low chance that these puts end up in the money. We just want them to expire worthless, and in three weeks, we keep all the cash and rinse and repeat. That’s what we’re trying to do every single week. It’s not gonna happen a hundred percent of the time, but it should happen most of the time if we go out far enough, so that it lowers the chance of the index falling to, to our strike prices. So we are going to sell this week.

We’re gonna sell the twenty thirty, and we’re gonna buy the twenty twenty.

So here’s what you see now. So you’ve got the bid.

So if you were to sell this option at the market, you’re going to sell it at fifteen twenty.

And if you were gonna buy this put at the market at the ask, you’re gonna see you’re gonna get thirteen sixty.

And so the credit would be a dollar sixty. But you can see that at least Schwab, and I’m not sure about all the other brokers, they I think they usually do, though.

They usually show you the midpoint of these trades because the spreads can be wide. And so here, the midpoint is fifteen twenty thirteen thirty five, and the credit would be a dollar eighty five. That’s a big difference between trading it at the market where it would be a dollar fifty. Very big difference.

So when we place the order, we’re gonna want it somewhere in the midpoint. You could do it at the market, and then you’ll just get filled at whatever the market is, which right now would be a dollar fifty, but I wanna get more than that because that’s that’s the more, appropriate price really, somewhere in the middle. So we’re gonna put in a limit price.

And and typically, what I’m gonna do is put in a limit price maybe a little bit below the mid price, to increase my odds of getting filled.

If you don’t wanna do that, if you wanna try to make sure you get that dollar ninety or even try to get two dollars in this case, go for it. There’s there’s, you know, no harm, no foul. If you don’t get it, if you don’t get filled right away, go in, change the order. You can always lower your price a little bit.

With these options, it’s not like we’re trading some micro cap stock where if a bunch of Optimum Club members get in, the stock’s gonna take off. You know, the Russell two thousand is a very, very big index. It’s pretty vibrant. There’s volume in these options.

So that’s not gonna be a problem. You know, you you it’s it’s not gonna run away from you, so you don’t have to worry about that. That being said, I do wanna emphasize if you are here on the livestream every morning, you know, watching this, every Friday morning, you are gonna have a slight first mover advantage because what’s gonna happen is we’re gonna talk about the trade just like we’re doing now. And then, you know, I’m gonna tell you this is what the trade is, and then I am gonna have to go to another screen and load up the trade to send an alert out for everybody who’s not watching so that they get it, you know, very quickly.

So you might be a minute, you know, minute and a half ahead of everyone else, by joining the live stream. And then once I’ve sent that alert, I’ll come back to my page and place the order myself. So you guys will get in first if you’re here live. If and if you can’t make it live, every Friday morning, don’t worry about it.

Like I said, it’s it’s gonna be a minute, minute and a half later. And, and these options are liquid. They’re not gonna take off, like, you know, like we’re buying some four dollar, micro cap stock. That that should be an issue.

But if you can get first mover advantage, you might as well try.

So the last thing I wanna mention here is that it says timing here. This is a day order. So you can do good till canceled, which means the order is live, until you cancel it. We don’t want that. We are only trading this today. If you miss a Friday, don’t trade it on Monday because we’re trading options only generally speaking, only about three weeks out.

And so, you know, every day that goes by means that those options decay, you know, quite a bit. And so we we only wanna get in, today. And if you miss it, don’t worry about it. But like I said, if you, you know, if you’re if you can’t get in on the livestream, even if you’re, you know, out to breakfast, out to to playing golf, and and you come back at noon or two in the afternoon, you can still make the trade. I just wouldn’t make it on Monday or, you know, or next week if you miss the Friday trade. Just wait until the following week.

So we’ve got the midpoint right now, dollar seventy five. And here’s a a really, really important thing to know. You know, one of the reasons we love this strategy is because it’s conservative. We know exactly what we’re gonna make or what we could make and and the maximum that we can lose at any given time.

And the way you figure that out is if we’re trading a put spread with a ten points, difference in the strike, so we’ve got the twenty thirty strike and the twenty twenty strike, so that’s ten points. That means the maximum that you could be out is a thousand dollars because it’s ten points, and remember options trade in hundred share or hundred unit contracts, so you’d multiply a hundred by the difference in the strike price.

So that’s a thousand dollars.

If we’re trading, a fifty different a fifty point differential, so if if the, if we were buying the the nineteen eighty put, then that would be five thousand dollars because it would be fifty times a hundred, but we’re doing ten. That’s generally speaking what we’re gonna be doing. So the the maximum outlay would be ten thou would be one thousand dollars, but remember, we’re getting a credit. So that credit subtracts from that loss. So market goes to zero.

We’re down a thousand dollars minus the credit that we received, which right now is looking about a dollar eighty five. So you’d be down eight hundred fifteen dollars. So that’s per per spread. You know, if you do ten spreads, it’d be more.

But per spread so that’s how you can easily figure out how much your maximum loss is. So it’d be a thousand minus, you know, the credit times ten. So here dollar eighty five, hundred eighty five dollars. So the maximum you could lose would be a hundred, fifteen dollars.

And then, you know, you can look and say, okay. So I’m I’m trying to make a hundred and eighty five dollars, risking eight hundred fifteen dollars, so that’s, you know, a little bit below twenty five percent return on equity.

You know, twenty five percent if you could make twenty five percent every three weeks, you would do that every day and twice on Sundays.

Now also keep in mind that right now, the, you know, volatility is low. The market’s been pretty strong, the last few weeks. So volatility is low. And when volatility is low, option prices come down.

And so it makes total sense because in the markets, you get compensated for taking on risk. So when the market perceives that risk is low, your compensation will be lower. When markets are are kinda going nuts, like we saw at the beginning of April, then the option prices were much higher. So that’s gonna fluctuate from week to week.

So this week, we might be getting a dollar eighty. Three weeks from now, we could be getting four dollars per spread. You know? It it really just depends on what’s happening in the market.

So, so, you know, don’t worry about that, and and the fact that right now, it’s it’s a little bit low, but that’s because the VIX is at, like, seventeen.

Three or four weeks ago, it was at in the fifties. So often prices were higher then than they are right now.

These things change, you know, every day, every week. So when we see some volatility, that’s actually gonna be our friend because we’re gonna make more money, putting more money in our pocket when that happens.

So, so this is the trade. So right now the credit, the midpoint is a dollar eighty.

I’m gonna I’m gonna move the limit price down to actually, let me change that. I’m gonna move it down to dollar seventy five to increase the chances of getting filled.

Again, you can you can try for however you wanna do it.

So I’m gonna move over now. I believe my screen will still stay up, but I’m gonna move over and send that alert out. You should be getting it in your inbox any minute.

And if you are, on text, you should be getting that in text as well. If you’re not on text, I strongly recommend that you sign up for it, because some people get their texts, a little bit earlier than their email. But one thing about about weekly income alert that you’ll know is that, you know, you will be getting that trade every Friday morning around ten o’clock. You know, might be ten o’clock depending on how much we have to cover, but it it’s gonna be close to ten o’clock. So you’ll know to have your inbox open or or have your phone ready to go.

So I have, sell to open the Russell two thousand, June sixth twenty twenty five. Twenty thirty put, buy to open the Russell two thousand. June sixth twenty twenty five, twenty twenty put, limit price of dollar seventy five. I have just sent that out. Oh, no. I did not send that. I have to put in a headline.

Let’s see if that goes now. Nope. Now, I need a ticker symbol. Alright.

Alright. The trade should have posted, so you should be receiving that any second.

And I’m going to review my order now. So hopefully, you guys had a chance to, place the order if you’re if you’re ready to do that.

Okay. So I am just going to blur out some information there. Alright.

Now, we have I’m gonna go double check everything here. Right? We wanna make sure everything looks correct. So, we’re selling to open the Russell June sixth twenty thirty put.

We’re buying to open the Russell June sixth twenty twenty put.

The mid is a dollar eighty.

I put in a limit price of a dollar seventy five. I’ve got my commissions here, my fees. So this would be my total amount, and I’m gonna place the order.

Alright. And the order has been placed. So we’ll see if we get filled. If not, like I said, we can always go back and change it.

So let me stop sharing my screen.

I see some people got in at one eighty, filled at one eighty, tried one ninety, did not fill.

Alright. So I just wanna make sure you guys can see me because I don’t see it on my screen. Let me see.

Alright. If you guys can see me and hear me, then oh, there. I seem to be back. Alright.

Everybody can see me and hear me. If you can, just say yes or see nobody. Yep. Okay.

Yeah. Sorry. Alright. So we went down for a minute. I don’t think you you missed anything, anything important because it seemed to have gone down when I stopped sharing my screen. So no big information was, was shared during that time. I was just playing around trying to get it back up.

So now we can get some questions. Ken said, did you say that you will usually trade ten spread contracts? Not sure I heard that right.

Your trading platform was only one contract. I’m only gonna be trading one contract at a time because I don’t wanna, I I don’t wanna increase the volume, on on any of these trades too much. I wanna make sure everybody has the chance to get in. Like I said, these are are liquid.

I’m not too worried about it. By the same token, we have a lot of people that are gonna be trading these. So I’m just gonna be trading one spread at a time.

And also a lot of people will be trading one spread at a time, so I wanna make those numbers relatable for those people.

A lot of people fill it at dollar eighty.

Okay. Annette says I’m using Schwab also, but my screen doesn’t offer a limit credit trade. It shows net credit and walk limit. So I would go with net credit.

Yeah. Go with net credit. Yeah. See, this is one of those things where every broker, even within the broker, depending on how you’re using it, the terminology can be a little bit different.

So, so Jeff says, sounds like you’re a little concerned about theta decay. If so, why do you start the trade on a Friday with the weekend theta so close? So theta, for those of you don’t know, is the the time element of the option. And so, you know, as you are probably aware, as you get closer to up closer to expiration, the option price decays faster, from the time element of it.

So price is obviously gonna have a a very important factor, but the closer you get to expiration, the price decays faster because of time. So we want that. We absolutely want that because we have sold a credit spread. So we want theta decay.

So by selling it on a Friday, you know, we have the two days over the weekend that it’s, you know, basically decaying even though there’s no trading. So yeah. So that that’s why I’d rather do it on a Friday rather than the following Monday.

So that’s that’s a really good question.

Let’s see. What other questions?

My Fidelity account says the order will leave the account with an uncovered option position in cash and to review the order. So you should not have an uncovered position.

Make sure that you have that long put order in there as well. That’s really important. We never wanna just be short to put alone because the risk is unlimited, and should you get assigned, it would cost you a lot of money. So you need that long put in there to make sure it’s not uncovered. And, you know, any any problems with the broker, anything that you don’t understand regarding a specific message or why a trade isn’t isn’t filling, definitely, you know, chat with the brokers, call them up, and find out what’s going on because, again, every broker is a little bit different. They all have slightly different rules about what you can can and can’t do. You know, one one common question I get is, can you do this in an IRA?

Technically, you can. Legally, you can, but it’s up to your broker on whether to allow that. So and every not every broker will allow you to. I think most do, but, again, you have to check with your broker on a lot of these things.

So Jerry Elsitt and Schwab, how do you get to weekly with RUT?

So if you remember when I showed it had RUT and then the, and then the expiration date.

That drop down menu next to the expiration date that said RUT, also had RUTW. So if you just click on that, and then click on RUTW, then you’ll get all of the expiration dates for the weekly expirations.

But, again, if you’re on thinkorswim, you don’t need the the w. You just put in RUT.

Jean says June six twenty twenty five doesn’t show. June twentieth twenty twenty five does. So June twentieth is the monthly option. So monthly options expire on the third Friday of every month, and we are going to be trading those, but only when the calendar lines up.

So I think on the on May thirtieth, I believe, when we make that trade, we’ll be trading the June twentieth. But other than that, other than those, you know, without once a month, we’re gonna be trading the weekly options three weeks out. And so you have to be able to find that weekly option. So whether it’s RUTW, or, you know, depending on your broker, you you have to find that.

It’s usually gonna be either just RUT and you’ll see it or RUTW.

But, again, talk to your broker about how to find the option the exact option you’re looking for if you can’t find it.

I knew I was gonna get this question from Grand Truck. How do you pick the option price? Do you use delta? This one is delta twenty three and twenty one.

I do not use delta. We did not look at delta. What we looked at was, a variety of, expirations. So, you know, how far out we were gonna be holding these, spreads, and the difference in strike prices.

So Delta was actually not something that we looked at. It was it was really just focusing on the time and the strike.

But I knew I was gonna get that question because I know a lot of serious options traders, do look at Delta. Delta, for those of you don’t know, is is basically the it it’s the amount that a stock is expected to move. So if, to to put it simply, if a stock has a a or an option has a twenty three delta, basically, the market is giving it a twenty three percent chance that it that option will end up in the money.

Great question. C b one twenty three. If let me go back. This is good. Just lost it.

If Russell closes between the strikes, would you need to be where you’d be assigned to the higher strike but unable to instruct a sell since the lower strike is below the money? That is a great, great question and a really important question. I’m glad you asked it.

No.

Here’s how it works. Let’s say, the Russell closes at twenty twenty five right in the middle of our two strikes.

So, technically, the, the short put at twenty thirty is in the money, and the long put is out of the money.

The only thing that you will be responsible for, though, is the intrinsic value of that put. So even though the long of of that spread. So even though that long put is out of the money, the intrinsic value of the spread is is only five points, because you’re five points, you know, out of the money on the short put.

So you would owe in this case, you’d owe five hundred dollars.

So that would be taken out of your account at expiration.

So that’s all. As long as that long put is in place, which is why you never wanna take off the long put. You never wanna just be short the put because then your risk is unlimited, and you would be on the hook for thousands and thousands and thousands of dollars. So you that long put is what protects you and keeps your losses small.

So in this case, if the Russell closes at twenty twenty five, five hundred dollars would come out of your account. But remember, you also collected a hundred and eighty dollars, so the loss would be three twenty. So the maximum you can lose if if you got a hundred eighty dollar credit would be, eight hundred twenty dollars, and that’s if the Russell goes to twenty twenty or below. And, again, it could crash.

The market could be at zero, and, anything below twenty twenty to zero, and the maximum you could lose would be eight hundred twenty dollars because it’d be a thousand minus one eighty. And anything in between would be, would be less than that. And, in fact, you you know, if depending on where it closed, if it closed at twenty twenty nine, so, actually, your short put is in the money, you’d still make a little bit of money. Money.

A hundred dollars would come out of your account, because it’d be, at one point in the money, but you’ve already collected a hundred eighty. So that trade would actually be a winner.

But just so you know, when you know, as as the weeks go by, I’m certainly gonna be monitoring this. The the plan is to let these expire worthless.

But as we get closer, if we see that this is going to likely finish, you know, deep in the money, It’s a market is is is really struggling. We have a few days left, and and I’m concerned that it’s gonna continue to fall over the next few days, and then I may close them out early, and and take a smaller loss, rather than let it go all the way down to expiration. But I don’t expect that to happen too often.

Really, the plan is is to keep this as as simple as possible. Make the trade Friday at ten AM. You wait three weeks.

Hopefully, it just expires worthless. It closes out automatically. You don’t have to do anything. It just it just goes away, and then, do it again at ten AM on Friday.

So that’s that’s really the plan. But I will be will be, obviously, monitoring positions. And and this is important too. If I do unwind a position early, if I exit the position, it won’t be a a broadcast like this.

You’ll you’ll just get that email, and, or and text because, you know, I’ll wanna get that out as early as possible, as quickly. Basically, as soon as I decide on that, boom, that that email is getting sent. I don’t wanna have to send an email saying, hey. We’re getting online, for a broadcast in ten minutes.

You know, I I just want that to happen if if I make that decision to pull the trigger like that.

Brother said, I thought you said we have to wait until expiration to close the trade. No. No. No. So what I said was, we want to wait until expiration to close the trade, but we don’t have to.

But you cannot be assigned early. So whoever you sold that put to cannot put the index to you, you know, cannot exercise that put until expiration if it’s an index.

If it’s a stock or an ETF, they can do it at any time, but the options cannot be assigned to you early. That’s the one of the benefits of the index option. It’s called European style expiration versus American style, which is the, what stocks and and options, how they trade, where they it can be exercised at any time.

What about so, where where I just lost this one.

It’s a good question. I can’t find it, but I think the general question was, what about closing out at a fifty percent profit?

You’re certainly able to do that if you want. I mean, it’s your money. So if if you decide you wanna take the profits and and move on, absolutely, you can do that. That’s not my plan, again, unless I I am concerned that something’s about to change in the market. But generally speaking, I’m I wanna try to let the process, process work. You know, like I said, in the back test, we saw an eighty six percent win rate.

And by win rate, I mean, you know, where they’re expiring, at a at a at a win, usually worthless, which is great. Again, worthless is good for us. So I wanna try to allow that to happen and try not to allow biases, emotions, get in the way of that. Again, I’m, you know, I’m a trader. I follow the markets minute by minute, so, I will not hesitate to make a move if I feel like it’s necessary to protect our profits.

But the system is designed to allow it to expire worthless. That’s why we’re also, we’re we’re putting strikes that are pretty far out of the money right now to to give it that room. Like I said, we could generate a lot more income if we were much closer to the current price, but then the risk is much higher that, that it does end up in the money, which is what we don’t want. We wanna keep this simple.

We wanna keep it just churning out cash every week, and that and then that when, we do suffer a loss, it’s not too large. It’s very manageable and that the wins will more than make up for the losses. So, you know, really the idea well, you know, one of the things I I love about trading is coming up with systems that work and just following that system. And you can certainly make tweaks if if systems stop working or or if if you find a way to improve it for sure.

I mean, systems are not completely infallible.

But, generally, you know, when you come up with a system that works, you kinda wanna stick with it. So that’s my goal is the back test in this was incredible, eighty six percent win rate. Some of the some of the the credits that we got were gigantic when the market was volatile. So I wanna just try to let the system work and and collect that cash week after week after week.

You know? It’s I’m not unlike maybe some of the other trading services that I have or that we have at the Oxford Club, I’m not trying to, you know, pick this stock right before it goes up and and have a huge winner. I want consistent income. It’s it’s very much, you know, how I I run the Oxford income letter, for example.

I just want that steady income. It’s how I, work a lot in my personal, finances. I just love that passive income coming in. When I get my, brokerage statements every month, the first thing I look at is not the the big number, of what’s in the account.

I look at the income, how much income is coming in each month, and what my expected income is for the year. That’s that’s what I like. That’s what gets me going. So this weekly income alert is designed exactly for that, generate lots of passive income.

Yes. Scott s says the strategy should be a set it and forget it trade. The chance of the Russell dropping by sixty points in three weeks is pretty low. Exactly.

Not impossible, but pretty low, and we want pretty low. We want just that set it and mostly forget it trade. And like I said, if I if I have to change something, I will certainly let you know. But, hopefully, other than maybe whatever questions you have, just the next time we’ll be talking will be Friday and the Friday after that and the Friday after that so we can just kinda keep keep, you know, the momentum going and just keep generating income in our accounts every Friday.

Tom k says, how important is ten AM? So we found that ten AM was the optimal time to trade just because, you know, some of that noise from the first thirty minutes, on a Friday, especially on a on an expiration Friday, some of that noise has has kind of, kinda dissipated a little bit, but there’s also a little bit more volatility at ten AM than, let’s say, at, you know, two PM.

So if if you can’t make it at ten AM, like I said earlier, don’t worry about it. You can make the trade at twelve or two if you have to. Just, you know, ten AM, what we found is the optimal time. So, the the advantage is is probably small, quite small, but, you know, every advantage that we can get, we’re gonna grab.

So, so that’s why we’re doing this at ten AM. But if if you can’t make ten AM, make make the trade at twelve or two or whatever. Just make sure it’s a day order. Like I said, don’t go, after don’t make the trade on Monday.

So Beth h said the alert in my email just arrived in my email. It would be helpful to include dollar signs where they are appropriate.

Great point, Beth.

I will start doing that on the limit. I I wanted to not put that on the strike because technically, you the index, it’s not a it’s not a dollar. It’s not like a stock where you’d say it’s a hundred dollar strike.

The index doesn’t represent that that it’s a point. It’s not a dollar, so I didn’t put it there. But I will put it in the limit. So, excellent suggestion. Thank you for that, Beth.

Ken says, any tips on scaling up the number of contracts?

Really, it depends on your tolerance for risk. So just consider what your maximum, what your tolerance for your maximum loss would be and, and take it from there. You know, if you’re if you, wanna make sure you never lose more than a thousand dollars minus the credit, you’d stick with one contract. If your tolerance is ten thousand dollars minus the credits, then you can do that.

You know? If if you’re fairly new to this, start off slow. There there’s no rush. Get comfortable.

You definitely wanna start slow with just a little bit of money. There’s always gonna be another trade. That’s the nice thing about this. There’s always another trade coming Friday, so you don’t have to feel like, oh, I just I can’t believe I missed out on this one.

Just wait till Friday. There’ll be another one. So, yeah. Definitely, if you’re new, start small.

And then as you get comfortable, you’ll start increasing. And and, hopefully, your account size is increasing too, so then perhaps your tolerance for risk increases along with your account size. But, you know, you really wanna make sure that you are, not risking more than you’re comfortable with. The last thing you want or that I want is that you’re up at night worried about the trade.

So it should always be with an amount of money that you can handle if, if it goes against us because some of them will. Hopefully, not too many. And in the backtest, not many did, but there will be. You know, I guarantee that.

So you gotta make sure that you can sleep at night.

See houses, are we going to call sell a call spread also?

Only when we’re really in a downtrend or bear market, and I’m I’m pretty convinced that we’re gonna continue to go lower. You know, you have to remember, markets tend to go up, or not ten. Markets do go up over the long term. So generally speaking, we don’t wanna try to be fighting that trend.

Again, there’ll be downtrends. There’ll be bear markets. And so when that happens, we may switch to call spreads, which would be the bearish strategy. But, the the plan is usually sticking with the put spread.

Let’s see what else we got.

If the trade goes temporarily against us, would it be wise to add to the position at a later date and a better price?

I’m not gonna be recommending that necessarily because at that point, you know, you’re getting closer to the puts being in the money, and and I don’t wanna increase that risk. Again, these these are are intended to be, you know, pretty low risk trades. I don’t wanna increase my risk at that point. So I’m not gonna be recommending obviously, if that’s something that you wanna do, that’s up to you, but I don’t recommend doing that.

Let’s see. Are we at risk of a thousand dollars per contract for this trade?

Yes. But subtract the credit that you received as the maximum loss. So it’s it’s with a ten a a ten point differential in the strike, it’s a thousand dollars. So if this trade completely goes against us, they will take a thousand dollars out of your account. But you’ve received a hundred and eighty dollars, so the net loss would be eight hundred twenty dollars. So, so that’s how that works.

Why did you choose Russell and not Spy or DIA?

It’s what the back test showed. We tested all of those, and the Russell performed the best. It wasn’t particularly close.

And, also, the Russell is a little bit more volatile than the S and P and the Dow, so we’re gonna get a little bit more of that juice, which means we’re gonna get paid a little bit more.

So that’s why we went with the Russell. If, you know, if you’re more comfortable with with a different index, again, that’s up to you. But, you know, we are recommending the Russell, for all the reasons that I had mentioned earlier.

Mike says, you’re after the project mentioned there are concierge available to answer our questions, presumably by email.

Could we get one of the moderators to put in how they can get in touch with the concierge? That would be great. Also, you can always email me at mailbag at oxford club dot com, and, you know, put weekly income alert in the subject line. I can’t I can’t give personal advice.

Remember that. And I may answer a question, in, you know, in the next, in the next broadcast or, you know, that’s probably how I would choose to do it. But, if you do have a question specifically for me, go ahead and do that. Just remember, I can’t I can’t give you personal advice.

I can’t tell you what you should do. But, but the concierge team is great. They they know the strategy, and they can help you too. So, if we can not sure if we saw that, but, yeah, if if, someone can put up how to get in touch with the concierge, that would be great.

Let’s see.

For weekly, is it r u t w in Schwab? So, again, every broker is gonna be different in Schwab. When you place the order on the web, you’ll put in dollar sign r u t as the symbol that will bring up the trade, and then you’ll see a drop down menu. It’ll say r u t and r u t w.

It’ll say r u t. If you click on it, on the drop down, it’ll say r u t w, and then that will give you the, all the weekly expiration trades. But, again, every broker is gonna be different, so you you you’re gonna have to talk to your broker or play around on their site to to see exactly how they handle it. It’s it’s it’s very it’s so annoying because it’s different than stocks.

If you’re trading Tesla, you just type in Tesla, and that would be the end of it or, you know, TSLA, but, that’s not the case.

So we need RUT to stay above twenty thirty to be able to keep the entire premium. Exactly.

That’s exactly how that works. At twenty thirty, the short put is at the money, and a tick below that, it’s in the money.

And so as soon as it goes a tick below twenty thirty, then we start losing some of that credit. And then eventually, if it continued lower, then it it would turn into a loss. But as long as it stays at twenty thirty or above, we keep all the money.

If you recommended this trade at a dollar seventy five, but I got in at a dollar eighty five, isn’t that better because I received more money? Absolutely. That is better. So I I put the limit just a little bit lower just to increase the odds that we were gonna get filled, because the the market makers, you know, depending on what’s happening in the market at any given time, sometimes they’ll they’ll play some games.

They may see a bunch of orders coming in. But I I just wanna give give us the the best opportunity to get filled. So I I put it just slightly below that midpoint at that time. Like I said earlier, if, if you wanna try to get filled, right at the midpoint or even higher, go for it.

And if, if you don’t get filled in in a couple of minutes, cancel it and and put in a lower price. It’s it’s real simple. And, but, yeah, getting the higher price is is definitely better because we’re receiving the money. We’re getting a credit.

Let’s see.

Thinkorswim ticker was r u t. Was this correct? Yes. It is. As I mentioned, thinkorswim doesn’t use the w sign, just uses RUT, which is insane because it’s the same broker. But, I guess it came from Ameritrade originally.

So please point out the mods tab for people to ask questions. So that is on the upper right above this chat. If you click on mods, then you’ll be able to ask some questions.

Let’s see. Mark, I know that you’re not a market timer, but after the huge rally in the market, and RUT, aren’t the odds that RUT goes below twenty twenty unusually high?

No. I don’t think they are at all.

Right now, the market’s strong.

It’s, we’ve got some momentum going to the upside and, you know, just taking away any of the fundamentals, any of the news, anything like that.

Market’s strong. I don’t not saying it can happen, but I don’t see a reason why we it would suddenly reverse. Obviously, anything happen politically or or in the news, what have you.

But just from a technical perspective, not at all. And, certainly, the market doesn’t seem particularly worried. The VIX is is quite low.

We’re not at extreme levels, certainly not at extreme levels of bullishness according to various sentiment indicators.

So, yeah, I I I don’t I don’t think that the odds are unusually high for a reversal. Again, doesn’t mean it can’t happen, but I don’t I don’t see it at as an unusually high. If we were at an extreme level, if the VIX was trading, I don’t know, at ten and sentiment was through the roof, bullish, you know, then I I might start to be a little bit concerned, but that’s not the case at all right now. We’re actually in a in a pretty good spot. And, actually, I have for those of you that are Chairman Circle members or technical pattern profits, subscribers, I have my, Friday forecast coming out, with all the charts and everything showing, showing the charts and and and basically, very short term basis.

I think, maybe the market could correct a little bit, but, the longer term looks looks pretty strong. I think we’re we’re gonna be hitting new highs in the fairly near future.

Alright.

I’m gonna try to start wrapping things up fairly soon.

Let’s see.

Mark, we always have a five point spread based on your backtest results.

No. The the right now, the spread is ten points, and that’s the plan is to stick with ten points because that’s what worked. Again, we tested we tested a lot of variables. We tested different expirations, different, different spread, you know, widths, the the amount of points in between the strikes, different, indexes, different ETFs.

And what we found was the best was this combination that we’re doing now, which is three weeks, ten points.

And, so generally speaking, I’m gonna be sticking with ten points. If you know, I never wanna say never when it comes to trading, but I’m pretty disciplined. So those of you that that know me well at this point know that I’m fairly disciplined. I stick to rules of in other services when we have, stops. I I honor them religiously.

So if if something drastically changes, again, I’ll never say never. But for the most part, I’m sticking with ten point, ten point wide spreads. Also, you know, that limits the risk as well. If, you know, I we could do a fifty point spread, but now, now we’re increasing the risk by five x.

So I wanna keep the risk small. Again, if you’re if you’re a trader that that wants to take on more risk, in in exchange for a higher potential return, that’s up to you. But for everyone that’s part of the service, I wanna manage that risk. I hate losing money.

Love making money, but I hate losing money more. So I wanna manage that risk pretty tightly, especially for this service, which is, you know, this this strategy is a conservative strategy. So I don’t wanna, you know, you know, kinda blow out that risk because that that kinda defeats the purpose. So, again, you you do what’s best for you.

If you love risk, you can certainly do that. But I wanna I wanna keep our risk, you know, really managed so that anybody who’s doing this is not losing sleep at night.

Alright. I’m gonna do one more.

What amount of cash Harris asked, what amount of cash is required for this trade? So you’ll wanna confirm this with your broker because every broker is gonna be different. But generally speaking, you’ll need a thousand dollars in the account for the trade, either cash or marginal securities, but a thousand dollars because if the trade completely goes against you, they’re gonna take a thousand dollars out of your account. Again, you’ll have received a credit already, so we’ll have, you know, hundred eighty dollars.

You’d have a hundred eighty dollars left if you only started with a thousand dollars. But for every trade, assume that you need a thousand dollars to trade. And if you’re gonna be trading with us every week, then that’s, you’re gonna have three trades on at any given time. So that would be three thousand dollars.

Of course, if you wanna have more, you wanna have a bit a bigger buffer in the account, that’s, you know, not a bad idea, but you you shouldn’t need more than a thousand dollars. But, again, talk to your broker, to make sure, so that, so that you don’t have any any slip ups or or not no surprises, I should say.

So we’re gonna wrap that up here because we’re we’re almost at eleven.

But I thank you all for watching. I’m so glad you’re a part of this. I am so excited to be doing this and doing it right alongside you. So, you know, if if you make money, I’m gonna make money too. And so, I’m I’m looking forward to making some money with you guys. So thanks very much, and I will talk to you next Friday.