Weekly Income Alert – August 22, 2025

Welcome everyone to Weekly Income Alert. I’m Marc Lichtenfeld. Let’s get ready to make some money. Alright.

Glad you’re with us. I know we’ve got a lot of people here. I see Don t one hundred from Massachusetts whose Red Sox beat my Yankees last night. Yankees were sloppy.

Mister Bill in Saint George, Utah, Gary m in Kentucky. I know we saw people from Australia, Hawaii, all over the place. It’s always fun to see where you guys are from. So thank you for joining us.

Today, we’re gonna also have the extended session like we often do when we brought in some, new subscribers. So we’ll probably run about an hour close to it, and, feel free to ask your questions. I do recommend you holding off with the questions until, until after, we place the trade and we get to the q and a because the way it works, so a little inside baseball here, is I’ve got the chat up and I scroll to see what your questions are. So if you ask them now, it means I have to scroll all the way back to the beginning, and I’ll probably miss it because I’ll probably be answering them kind of as I first see them. So, so I definitely recommend you holding off on that until we get to the questions.

Alright.

One thing I wanted to mention real quick is, you know, I was thinking this morning about, you know, we’re we’re today, unless the market crashes, and Jerome Powell is probably just starting to speak right now, so you never know. But if if the market does not crash today, then we will be eleven for twelve, eleven winners out of twelve trades, so we’re doing great. And by the way, if you have made money, if you’ve been with me for a while, please, you know, let me know in the chat. Tell me, you know, how much you’ve made, if you spent the money on anything, what you think.

We always love to hear it. It’s kind of what, what the best part of my job is when I make you guys money and then I actually hear about it and hear how well you guys are doing. So, please let me know if you can in the chat. But what I was thinking is, you know, right now we’re we’re doing great.

We’re eleven for twelve.

But one of the common questions I get is, you know, we’re we’re generally scooping up about two hundred between two hundred and two hundred fifty dollars a contract right now, and and why is it so low? And it’s because the market has been so strong and that, as a result, the risk is lower. So the VIX is lower, volatility is low, and the risk is lower. And I’ve talked about this before how, you know, the markets will compensate you for the risk that you’re taking. If you buy Coca Cola stock, that’s not a risky stock. And chances are you might make some money, but you’re probably not gonna make a lot of money on it.

But you’re probably not gonna lose much either if things go wrong. You buy a penny stock, there’s a decent chance that it’s a disaster, but, if it goes up, you could take home a gigantic profit on that. So, there, you know, there there’s risk reward involved, and the the amount that you can make is based on that. And so, you know, what I was thinking I’ve talked about this before. Right now, we’re getting paid between about two hundred, two hundred fifty dollars, per contract because the risk is low, markets are strong, volatility is low.

When we start getting paid more, when we start making those four hundred, five hundred dollar, six hundred dollar credits, I want you to keep in mind that’s when things are gonna be hairy in the market. That’s when when I recommend that trade, you’re gonna be thinking, hey. Should we be doing a a bull put spread right now? Markets are nuts. You’re gonna be thinking, maybe we should be doing a a bear call spread instead.

So do keep that in mind. When we have the opportunity to get paid big money, that’s when it’s gonna feel difficult. It’s gonna feel really hard. I mean, just like any job that you get paid, you have a really easy job, you probably don’t get paid that much.

You know? If you’re a neurosurgeon, you probably get paid a lot because that’s a really difficult job. So same thing here. If we’re getting paid a lot in the in these spreads, it’s because it’s gotten hard, and it’s gonna feel difficult.

It’s gonna feel uncomfortable. So do keep that in mind that that’s that’s gonna be kind of the the, the emotional stance that we’re gonna be dealing with when the credits start getting much, much larger. For now, the credits aren’t huge. They’re in the two two hundred fifty dollar range roughly, but it’s been easy so far.

We’ve been just scooping them up every week, and they’ve been doing great. So, again, assuming that we don’t crash today, we’ll take home another winner. At the end of the day, our twenty eighty, twenty seventy spreads, will expire worthless. We also have the August twenty ninth twenty one forty, twenty one fifty spreads that are doing just fine right now.

And then the September fifth twenty two hundred, twenty two tens, are doing okay.

They’re currently profitable, but, you know, we certainly wanna see them erode a lot more, and to get to a much lower number.

Again, Jerome Powell is speaking right now and or he’s supposed to be and, you know, anything could happen in the markets.

Actually, it looks like the Russell just took off, by about, thirty points since I started talking. So I’m gonna have to recalculate some numbers real quick before we get into the trade. So let me just look at this real quick.

Okay. So let me load up my sorry. I’m I’m just looking at some prices now because I had to adjust what I was planning on doing because Russell did just take off.

Okay.

Alright. So I’m gonna share my screen, and that way you can see what I am doing on my trade.

Stephen b saying, should we wait till things settle down?

That’s up to you.

But, you know, things could just keep going from here. So it’s it’s it’s very difficult to time the market.

I’m not gonna I I don’t try to time the markets. If things go against us, then we’ll, you know, we will try to scale out of it.

So let me share my screen.

Alright. So, again, let me remind you if you’re fairly new that if you’re I’m I’m showing this on Schwab. If you are with a different broker and are seeing things that look different and you’re confused, you can put it out in the chat because if if you’re on Fidelity or Vanguard or E Trade, perhaps, there’s probably somebody on here who is on that platform and has has done this before and might be able to help you out. If not, definitely talk to your broker.

You know, if you have broker specific questions, then you’ll have to talk to your broker about it. So, we’re gonna enter a trade on the Russell, and Schwab has this kinda weird glitch where you have to do dollar sign r u t. Some brokers, it might be r u t w, might be dollar sign r u t w. But Schwab, it’s dollar sign r u t.

So we’re gonna put that in right there. And then in order to get to the actual the right, the right expirations on Schwab, this drop down menu right here, you have to change that to RUTW, and that will give you more, more expiration dates here. If you if you just leave it at RUT, just get the the third Friday of the month, the monthly options.

So, up here where it says call, we’re gonna change that to a vertical put spread.

So that’s what we’re doing.

So vertical put, and we want it to be a net credit. Okay? Remember, you never want a net debit. We want it to be a net credit.

We are collecting the income. Now right here, because we haven’t changed the x the we haven’t changed the option yet, the strike prices, it’s showing us a debit. But that that will change once we change the strike prices. So make sure you have RUT or RUTW, however your broker has it, a vertical put spread, it might say a bare put spread.

You know, every broker phrases these things a little bit differently.

Les is asking a AM or weekly nine nineteen. We’re not doing the nine nineteens. This is gonna be the nine twelves. I haven’t I haven’t gotten to the trade yet. So, I’m I’m just kinda going through each drop down menu first.

So, we are going to do the September twelfth.

Okay? And let me see, where’s the Russell twenty three twenty eight? Let me just see if that has changed drastically.

Okay. So I am gonna do the twenty two fifties.

I’m gonna sell the twenty two fifties and buy the twenty two forties.

So the credit is now below two, not surprising because the market’s ripping, and so volatility comes way down when that happens. So that’s, you know, that’s unfortunate, but it’s because the risk is theoretically a lot lower, with the markets, soaring right now.

Let me just see something. Let me just see what it is if we do the twenty two sixties, twenty two fifties.

So that’s a little bit higher.

I’m gonna switch it up to the twenty two sixty, twenty two fifty, because the market is is is up a little bit. That increases our chances of, of the trade ending up in the money, which is not what we want. It increases our chances slightly, but I’m willing to take that chance in order to get the slightly higher credit with the markets being so strong right now. So we’ve got sell to open the Russell, September twelfth twenty two sixty, buy to open the Russell, September twelfth twenty two fifty, for a dollar eighty five, dollar ninety, dollar eighty. Yeah. It’s it’s changing up now.

Here, we have the limit price.

And, typically, what I do is I’ll bring my limit price slightly lower, than this midpoint here. And the midpoint is generally what we’re trying to get. So if you see, like, the bid here is a dollar thirty, we never wanna do this at the market. We always wanna put in a limit price because the it’s such a drastic difference between the market price and the midpoint, and you usually will get filled somewhere around the midpoint.

So let’s say for argument to take it at a dollar ninety. Typically, I will put in my limit price slightly lower than that just to increase the odds of getting filled. Because today, that limit that, mid price is on the lower side, it’s below two. I’m gonna try to keep it right around, let’s say a dollar ninety.

Actually, let me change this here.

Now if you don’t get filled right away, if the market takes off, that’s okay. Very often, it takes a few minutes. It could even take a few hours to get filled. If you put in your limit price, you can always change your limit price.

There’s also an order called a walk limit order where you decide that if you don’t get filled within a certain amount of time, it could be seconds, it could be minutes, that your limit price will decrease by an amount you decide. So you could say if I don’t get filled in thirty seconds, decrease my limit price by five cents until a a minimum of a dollar eighty, for example. That that’s something you could do if you wanted to. I’m gonna leave the limit price, right at a dollar ninety and, and understanding that we might get filled, it might take a little while to get filled.

I see a a few people are getting filled, at a dollar ninety. So I’m gonna review my order.

Sell to open the September twelfth twenty two sixty. Buy to open the twenty two fifty dollar ninety. Okay? And I have to just put that order.

You can go ahead and place that trade. I have to go out. I have to now place the or I’m sorry. I have to put that trade out to, all the subscribers who might not be on right now.

So let me do that, give you guys a chance to get in.

So just bear with me while I type this up. I see a lot of people getting filled at a dollar ninety.

And I didn’t have this, all loaded up. I apologize because the markets were moving, and so I didn’t know where things were gonna be. So And I’m trying to make sure there are no errors because James, our moderator, also copy edits my work, and he will be very upset if I have any typos in here.

Alright. So to open the Russell, September twelfth twenty twenty five twenty two sixty put, buy to open the Russell September twelve twenty two fifty put, limit price dollar ninety. I am gonna send that out.

Alright. I sent that out. So now I am going to place the trade myself.

Looks like that midpoint has come way down since, I did that, but I’m gonna just place it and wait to get filled. If I don’t get filled, then, we just move on and, and and there won’t be a trade this week.

That’s basically how we’re doing. We don’t chase it. We don’t chase it lower. We don’t come in the next day.

You know, on Monday, we don’t, we don’t we don’t kinda chase the trades. If we don’t get filled, we don’t get filled. You know, usually, during the course of a day, the markets will, will adjust a little bit, and it’ll come in enough that you do get filled. So so, so I do leave it out there.

Like I said, there there have been times where where we didn’t get filled for several hours.

I think maybe it was, like, the third or fourth week. We didn’t get filled till about one o’clock in the afternoon, one thirty.

So let’s get your questions. The Roy says, I’m on Schwab, and I can’t get order type net credit. Any suggestions?

Did you put the the suggestion I would have it where it said the symbol, did you change it to vertical spread or vertical put spread?

If so, then, once you have it labeled as a spread, there should be either a net credit or net debit option. So, that could be the issue there.

The Royce is showing only limit credit.

I’ve never seen where it said limit credit.

So eWalter says, I don’t have enough cash for this trade. I have three thousand dollars available. How much do I need? You really only need a thousand dollars per contract.

So if you’re trading one contract and you have three thousand dollars cash, that should be enough.

If you only have three if you have three thousand dollars in the account and you have three other open trades, because remember, today’s trade doesn’t close doesn’t finish. It doesn’t come off the books until the close.

So if that’s the case, you you essentially need four thousand dollars in the account, three thousand dollars, that are committed to the other trades, and then a thousand dollars for today’s trade. And then again, at the close today, a thousand dollars comes off the books, when that trade closes and and expires worthless.

Stephanie says I’m level one on Schwab. Can I do the trade?

You need to be on Schwab level two. Other brokers call it level three, but on Schwab, you need to be level two.

So apply to Schwab and ask to be, level two. If you are not approved, I talked about this a little bit last week.

If anyone is not approved to trade credit spreads, here’s what you do. So first of all, when they when the brokers decide whether to approve you, you have to show that you you know what you’re talking about. So you have to usually answer some kind of questionnaire. You have to say you have some experience, with trading options.

If you don’t get approved, study the welcome materials. You know, really make sure you understand how the trade works so that, so that you can answer their questions. If you don’t get approved, call up the broker and say, look. I wasn’t approved.

I know what I’m talking about. I know how the strategy works. Ask me some questions, and I’ll prove that to you. And then, I have heard this working many, many times where you prove to the broker that you do, in fact, know what you’re talking about, and they will approve you.

I can’t I can’t say it’s gonna happen a hundred percent of the time, but it it does happen. So, if if that’s the case where you don’t get approved initially, you know, study up on the materials. It’ll take you an hour or two at the most just reading in the welcome materials, watching the videos, and then you’ll, you’ll be in in a good shape to answer those questions.

On Schwab, it will not give me the option to select nine twelve. It starts nine nineteen on the drop down.

To the left of that, it says RUT. Select that drop down and go down to RUTW, and that will give you all of the other expirations.

Let’s see.

So people are asking about, deltas. We are not using deltas.

What we did was we used a standard deviation in the backtest, and what we found was that roughly three percent from the current price is the optimal place to get in on these trades that are three weeks out. So, so we’re not looking at deltas. We did not do that in the backtest. We’re strictly going on what worked in the backtest.

James, thank you very much for posting those welcome materials. That’s really helpful.

Let’s see.

R. Great great, insight here. I took the thinkorswim class on options and passed the quiz, and Schwab approved me after that. So, thank you for sharing that, R. Yeah. Thinkorswim has some some great tools.

John m says it says I don’t have enough cash. Again, you should have a thousand dollars in cash, that’s not committed to any other trades. If you do and it won’t let you trade that, then talk to your broker because, you should be able to to make that trade. Because remember, the maximum loss here is a thousand dollars minus the net credit. So if you’re trying to have a net credit of a dollar ninety, your maximum loss is eight hundred ten dollars as long as you have that thousand dollars in the account. Because what’ll happen is if you make the trade, a hundred ninety dollars hits your account immediately.

And if the trade is a a complete loss, a maximum loss, then a thousand dollars will come out of the account.

So that’s why you need that thousand dollars in there, leaving you with a hundred ninety dollars, so a loss of eight hundred ten. But as long as you have the thousand dollars cash that’s not committed to anything else, you should be able to make the trade. So ask your broker why that is the case.

People are getting filled dollar ninety, doll two dollars. Awesome to hear.

Ken Hurst says, I’ve been finding I get better fills on Thursdays, and by rolling them out three weeks, I’m reusing this same thousand dollar collateral per contract rather than requiring an additional thousand dollars till the expiration at the end of Friday markets. This makes it easier for small accounts. Okay. That’s, that’s interesting insight. Thank you for sharing that.

Peter R says, I would like to place this on Schwab trading options. Do I need to get approved for this? Yes. Again, you need on Schwab, it’s called level two.

Everyone else, it’s called level three because Schwab starts at level zero. So everybody else is normal and does levels one, two, and three. Schwab does zero, one, and two. But you do need on Schwab level two, everybody else level three.

Alright. People getting filled at two bucks.

Last week, my order got canceled at four twenty. I’m not sure why.

If it’s a a day order only, then it would get canceled at the close of the market. If it’s good till canceled, then you could get filled the next day. I recommend day only because we don’t know where the market’s gonna open up on Monday. And so if the market opens up significantly lower, then we don’t want to make the same trade at the same strike prices.

Let’s see. Ron b says, I too am closing a day or two earlier than expiration to free up cash, purchasing power. Interesting. So maybe, you know, since, several of you are doing this, maybe we’ll take a look. I’m not sure if we did this in the back test and see what happens if we close out a day early to free up that cash, how much it changes the results. There will be some commissions, so that will eat into it a little bit.

And, you know, and on a Thursday, you’ll probably never quite get to zero. Yeah. You might have to pay three cents a nickel, to close the contract. So that will certainly eat into the returns a little bit, but, that might be worth taking a look at too to see if it if it does affect the results significantly. And if not, then that might be a good, good way to free up that cash for the next day.

Can you give us a quick way to calculate net credit, max profit, and max loss? Absolutely. So the max profit is the net credit, what we just sold it for. So in this case, a dollar ninety or a hundred ninety dollars per contract. That’s the most you can make on this particular contract, because, that you get that money right away.

If the option works out in our favor, the trade works perfectly, the way most of them have so far, it expires worthless. It goes to zero. So you’ve sold something for a dollar ninety, and it goes to zero. So you just keep the dollar ninety or a hundred ninety dollars.

The max loss is a thousand dollars minus the net credit. So in this case, a thousand dollars minus a hundred ninety dollars would be eight hundred ten dollars. And the reason it’s a thousand dollars is because our strike prices are ten points away from each other. And remember, options are traded in units of a thousand.

So ten point difference times, I’m I’m sorry. Options are traded in units of a hundred. So ten point difference times a hundred units, and you really can’t buy a unit of the index, but that that’s a word I have to use basically, unit. So ten points and the different strike times a hundred units is a thousand dollars.

So if the Russell totally tanks or actually just finishes below where our strike prices are, you would owe a thousand dollars. The the the option at expiration would be settled in cash because you can’t you can’t be forced to buy the index. So it’s just cash, and it’s a thousand dollars, would come out of your account. Now you’ve already collected a hundred ninety, so a thousand dollars minus hundred ninety is eight ten.

If you were trading a spread that was twenty points wide instead of ten, then it would be two thousand dollars minus the net credit. If it was a hundred points wide, you know, then it would be ten thousand dollars minus the net credit. So that’s how that works. Now if you had a a wider spread, then the net credit is higher too because you’re you’re you’re risking more money, so you’d be making more money as well.

But we’re trading generally speaking, we’re usually gonna be trading ten point spreads, and then that will be a thousand dollars minus the net credit. So that’s the maximum loss you can have. Now if you’re new, you might be saying, well, I’m risking eight hundred ten dollars to make a hundred ninety dollars. That doesn’t seem like a great payoff.

Remember, in backtesting, the system worked eighty six percent of the time. So far in real life, it’s worked eleven out of twelve. It’s it’s not always gonna be eleven out of twelve. We’re gonna have periods where the market comes down. We’re we’re gonna take losses occasionally, but we’re expecting to win way more often than we lose.

And a dollar ninety is is pretty low on the scale. We’ve been like I said, we’ve been around two to two fifty. I think we might have had one day at two seventy. There are gonna be times again, like I said earlier, when the market’s a little hairy, but we’re gonna be making more than that. We’re gonna be making three, four hundred dollars per credit. And those are gonna, you know, make up also for for losses. And remember, when we take a loss, it doesn’t have to be the maximum loss necessarily.

There might be times where the market just has that big whoosh lower, and and there’s not much we can do. But there are gonna be plenty of times where a position has gone against us, and we can get out of it early before, you know, well before it’s a maximum loss and perhaps even before it’s a loss. You know, we we might be, let’s say, at a dollar ninety today.

Let’s say two weeks from now, the market starts, being a little difficult. Maybe we get out, and and we cover the position at a dollar, and we’ve kept ninety cents, but we’re making sure that we walk away with a profit instead of a loss. So not not every loss or every downturn has to be a maximum loss. We’re we’re gonna be managing the positions.

There will be times. I I wanna make sure everybody is prepared. There will be times where we take the maximum loss either because, you know, the market just fell hard and we didn’t really have much of an opportunity to get out, or we wanted to see if there would be a bounce, because it happened, you know, early in the in the trade, let’s say, the market tanks next week.

I would probably say let’s give it a week or so to see if we can recoup some of this because, you know, again, the mark the options decay over time, so we wanna let it decay. So even if if markets fell but the options decay, we might be able to get some of that money back depending on how far the markets fall. So, you know, there there will be times we get the max loss, but there can be a lot of times where we don’t. So I just want want everybody to be prepared for that.

So I see, yeah, James is jumping in here about you cannot be assigned. So, yeah, thanks for for doing that, James. As James said, these options are cash settled. So different than a stock or an ETF. And and I a question I get all the time is can I trade the ETF like the IWM, which is the Russell two thousand ETF?

You could trade it, but if it goes against you, you could be assigned, and then you could have to buy the ETF.

So that’s one reason that we don’t do that is that that we don’t trade the ETF because this, it’s only cash. You will never have to be as, you never have to buy the the ETF, and the most that would come out of your account per contract is a thousand dollars. So it it it really keeps the the, keeps a lid on potential losses. Also, with the ETF or any stock, you could be assigned at any time before expiration.

It usually happens at expiration, but it can happen, and it does happen earlier, sometimes.

With index options, that cannot happen. It can only, you can only be assigned.

And, again, assigned just means, cash settlement. Cash comes out of the account. That can only happen at expiration.

So that’s a a a big, big benefit of trading the index. And I’ve talked about this a few times before. One other benefit of trading the index, their tax advantage.

Sixty percent of the profits that you make on an index option is traded at your long term capital gains tax rate.

If you trade a stock or ETF option, it’s and it’s a short term gain, which these are, a hundred percent of it is trade is taxed at your ordinary income tax rate. So that’s gonna be higher than the long term gain. So, so the index options are tax advantage. You’ll pay a lower tax on your profits, and you can’t be assigned early and, and and you know what the maximum loss is going in. You’ll never be assigned, you know, having to buy an index.

Ron r says, should I sell out the August twenty nines? Right now, I’m not recommending that.

Well, I mean, it I haven’t even checked to see where they are. They’re probably pretty darn low at this point, but, I’d rather have it expire worthless if possible. Again, not have to take that, you know, if we have to pay five cents or whatever it is and not have to pay any commissions.

You know, if it’ll help you sleep better at night, I’m not gonna fight you too hard on it, and and have that off the books, but I’m trying to keep every dollar that I can. And and one of the reasons is because as I talked about, you know, we are, the potential loss is greater than any individual gain in any given week. Again, cumulatively, we expect those gains to be much higher than the losses, and that has been the case so far. But, you know, if I I wanna try to keep every five, ten, twenty dollars that I can because over the long haul, that will add up. If you cut out of a trade early every week and it cost you, let’s say, twenty dollars a week over over the course of a year, that’s a thousand dollars.

So for some people, that could move the needle. Other people, maybe not. Maybe and and it’s worth it, to be able to sleep at night, not have to even think about the trade for the next week. So that’s that’s really up to you. It’s it’s whatever is gonna help you sleep at night the best. But for for me right now, I’m gonna leave this trade on. Well and we’ll see what happens next week and and, you know, hopefully, this it decays even further.

Okay. So let’s see if I can decipher this. H a c says, in my thinkorswim, last week’s trade now appears twenty two hundred minus twelve seventy five, twenty two ten plus fourteen thirty with a net of one twenty five. What does this mean?

What are these numbers from? So that means that your so the twenty two hundreds from so okay. So the twenty two hundred puts, that we’ve sold are minus twelve seventy five. The twenty two tens are fourteen thirty, with a net of one twenty five.

So that should mean that you are up a hundred twenty five dollars on this position because the market is is much higher. So it’s it’s I’m a I I’d have to I’d have to be looking at it exactly, like, on my screen.

But yeah. So because you this is a credit, so, you are up a hundred twenty five dollars on that trade. So that’s what that should mean.

But, again, I have I’d have to be looking at at it exactly to to tell you a hundred percent for sure. But because the market is up significantly, it should be that you’re up a hundred twenty five dollars.

Les says, would it not be prudent to set something like a fifty percent stop loss? Otherwise, a loss could negate three to four successful trades.

That’s a great question, Les.

So, generally speaking, I don’t put losses on option trades because options are pretty volatile.

And, you know, if a trade goes against us, volatility has increased and the option prices are gonna increase. So it’s not just that the stock or just that the index is falling. Volatility is increasing, which is also gonna add to the price of the the options. And in in in the in our case, we don’t want the prices going up. We want them to decay. We want them to go down.

So I don’t like to have stops on options because of the noise, because of the volatility, and I don’t wanna be taken out automatically.

That being said, does it make sense if a trade’s going against us to get out at at a fifty percent loss? It it very may well, and it kinda depends when it is and how markets are reacting. And, you know, if if we’re in the last week of the trade where the options are gonna start decaying very rapidly, you know, is the is the is the index very much in the money? If that’s the case, then then it it might make sense to do that.

If it’s getting close to being the money or, you know, being in between the two strikes, then there could be an argument being made to to, you know, wait another day wait another day and see if those options decay some more. So I don’t I don’t have a hard and fast rule for exiting, but, it does make sense in some cases to, yes, cut the losses short and not sustain the maximum loss. The one loss we did take, that’s exactly what we did. I think I think we took about a fifty percent loss on it.

But, yeah, that so the when I talk about managing the trades, if they go against us, that’s what I’m talking about. But it’s not gonna be a hard and fast rule. It’s gonna depend on the market, on conditions, how much time we have left until, until expiration because, again, we wanna try to let those options decay if we can. So, so, yeah, no hard and fast rules for the exit.

And and I wanna mention that in our back test with that eighty six percent win rate, that was letting up all the trades go to expiration.

So, so the losers, you know, were max losses, with, and and we sold the eighty six percent win rate. So, but I will be managing these these positions when they go against so, don’t worry about that.

Cathy says, I use trade TradingView charting, and I set price alerts instead of setting stops on options. Yeah. And I I actually recommend that even for stocks too and and the other services. I like price alerts.

And that way, I can decide, look at the market, see what’s happening, and and, you know, either make that decision or, when we use stops on you know, in in our stock portfolios, when we use trailing stops, we do it on a closing basis. And that way, I can I can make the trade the following morning? But, yeah. I I like having alerts, rather than hard and fast rules, especially for options. So, yeah, good call there.

Ned Max says I oh, wait. That was the wrong one.

John k s says, on the order type, it has only the option of limit credit or walk limit credit. There’s no option to put in net credit. So limit credit should be fine. That should be the same thing.

Again, the walk limit credit is when you tell it to, to lower your price in certain increments. So you could say every thirty seconds, I want you to bring my my limit down five cents, for example, until a minimum of a dollar eighty. So if if if you never got filled at a dollar eighty, it’s not gonna make it lower than that, but you could, you know, if you’re not getting filled and you wanna make sure you get filled, you can have it adjust lower, at certain time increments. We’re not doing that here.

I don’t have a problem with it if you do, but limit credit, should work just as net credit.

Kate says, do you have any programs learning how to trade calls and puts correctly with stop call and put suggestions?

So we do have, a lot of options material on the Oxford Club website.

That’s, so I’d I highly recommend going to Oxford Club, including our welcome materials. The welcome materials aren’t just about the put spreads. They’re they’re about how options work, how to trade options. Highly recommend that.

If you’re looking for a book, there’s a first of all, there’s a ton of free information on the web as well, as well as our website. But a great book by a friend of mine, Lee Lowell, called Get Rich with Options. And if the name sounds familiar, like Get Rich with Dividends, yes, I did borrow that. We have the same publisher, and, they the publisher suggested it, and I cleared it with Lee.

And, he said that was fine, because it said everything I wanted to say. But it’s actually it’s it’s a very good book if you if you wanna, you know, have a a book to read as well. But like I said, there’s tons of stuff on our website in the welcome materials that, James had posted and, and and tons of stuff online as well.

Don r said missed the trade, and it’s not posted on the website.

Don’t know why it’s not posted on the website yet. I’ll tell you what it is right now. Again, it’s the September well, there should be an alert in your inbox, but it’s the September twelfth twenty two sixties. We’re selling the September twelfth twenty two sixty and buying the September twelfth twenty two fifty. That’s the trade.

Let’s see. Where is the market price right now? The market price right now, twenty three fifty. It is ripping higher.

So, yeah, this trade should be in the money or well, it is in the money already. I haven’t I haven’t checked, but, yeah, that should be doing pretty well. Hopefully, that will continue through next week.

Let’s see.

Let’s get some more questions.

Oh, and, John said yeah. John, our moderator, says check the trades tab. Yeah. Do you see so here in the in the, weekly income alert chat, if you, where it says chat at the top, if you click trades, you’ll see the trade there. Thank you for that, John.

John k s is where does the money go assuming I made money? Does it go back into my cash account?

Yeah. It goes right back into your account. So the the cash hits your account immediately, so that hundred ninety dollars hits your account immediately.

And then if it expires worthless, nothing happens. And the, the it expires worthless, nothing happens. If if if we owe money, if the trade doesn’t work out, then the cash will come out of your account.

RCBV says easy way to tell how our previous open trade’s going. So if you go to our portfolio, so in the upper right hand corner of this page where it says menu, if you click that drop down menu, and click portfolio, it will tell you now I do wanna say the portfolio takes the last trade as as what the current trade is. That’s not always accurate. So, for example, I was looking this morning on one of our trades.

I think it was the, September fifth, and, the last trade was at, like, three dollars and thirty cents, which would be a a loss. We’d be down. But when I looked at the actual market, the bid and the ask were way lower than that. So, the the what was reflected as the last trade was not kind of the the true truly what was happening in the market.

The trade is is actually, doing quite well, even before the rip higher, you know, this morning, before the market even opened. It was it was still profitable just based on the bid and the ask. So, the best way to to look at it is is look at your broker’s site, and look at your portfolio, and that will tell you for sure, how much you are up or down, at any given moment.

Peter R says, I just checked my email and I did not receive anything from Oxford. How can I check to make sure I receive my email and text alerts? Let me make sure I got mine.

Yeah. I got mine at ten fifteen.

So just wanted to make sure that, not putting in your face. Just wanted to make sure that, that the alert did go through.

So check your spam folder. Make sure you white list the Oxford Club so that, it doesn’t get caught up in spam.

And as far as text alerts, James or John, if you have any suggestions on how to make sure that they’re getting their texts or emails, that would be helpful.

Steve Eray says, trouble setting expiration date to add trades for two weeks, now expires September nineteenth. So, make sure that you have the RUTW selected if you’re on Schwab from that drop down menu where it says RUT, and then it probably says September nineteenth next to it. If you click on RUT, underneath it, it says RUTW. That gives you the weekly options, and that will give you all of the, the various, all the various expiration dates.

Ed Skate says, when you are evaluating open interest, are you judging that on the single option or vertical spread chain?

Kind of both.

Kind of both is is is this this simple answer. So, yeah, I’m I’m I’m I’m I’m trying to find you know, it’s a little bit of a balancing act. I’m trying to find the most liquid trades I can, but also as close to that three percent, that three percent number that I can. So there’s a little bit of a juggling act there.

So, Ken Hurst, also doing what, some other people have mentioned where they’re getting out of the trade a day early, enabling him to reuse that same thousand dollar collateral per contract instead of requiring new collateral to the expiration into Friday.

Yes. There may be slightly higher commissions for rolling, but it is negligible, what says Mark. So, yeah, I think that’s a a really interesting way of doing it and and a way to, to have less cash, needed in the account. And, as I mentioned earlier, I I do wanna take a look and see in the backtest how much that affects our results. And, you know, Kenner’s saying that it’s negligible with the the commissions and the amount that you have to buy the the credits back for. That’s probably true. I don’t doubt that, but I do wanna see what effect it will have.

Rutherford, will we ever do an uncovered put roughly ten percent out from the current price? The risk is quite a bit less and the credit about the same.

So I disagree with you, Rutherford. The risk is not the same because if the market absolutely tanks, then we could be on the hook for big, big money, with an uncovered, put. So in other words, we sold a put. Let’s say we use this exact today’s example. Let’s say we sold the put at twenty two sixty and did not buy that put underneath. So, so we are exposed to anything below.

Twenty minutes from now, Jay Powell says, I don’t care what Donald Trump says. We’re raising rates four times this year. Market absolutely gets obliterated, and now you could be on the hook for thousands of dollars, with an uncovered put. So that as I talked about last week, if you were here, that put that we’re buying is our insurance.

That’s our insurance that we, don’t take a devastating loss. Now it may be where if we sold uncovered puts, and I do sell uncovered puts on stocks. I do that in, the income accelerator portfolio as part of Oxford income letter. I do I do that, but, that’s what what this service is. This service is about, you know, collecting those net credits in a in a pretty conservative way.

And if we sold uncovered puts on the Russell, on the index, chances are, yeah, we’re gonna make money most of the time.

But when we do have those times where the market tanks, the losses could be really devastating, could wipe out all of those profits. You know, there’s that expression, the market takes the stairs up and the elevator down.

It’s true. You know? Anybody who’s been trading the markets for a while, you know, we all remember those times where the markets just kept falling and falling and falling, and it felt like it was never gonna end, and and it happens quickly. So with this strategy, I wanna make sure that we never get wiped out, because we don’t have that that put that we bought in place. You know, that’s our insurance to make sure we never take a devastating loss.

Really, really important in this strategy. Again, if we’re selling naked puts on stocks, that’s different because it’s a stock we wanna own, theoretically. That’s the only way I I sell naked puts. It’s it’s here’s a stock that I’m willing to own at a lower price.

Now if the market tanks, let’s say, stock’s trading at twenty eight and I say I’m willing to own it at twenty five, market absolutely tanks, and now the stock’s trading at twenty, I own it at twenty five. Well, that’s unfortunate, but I was willing to own it at twenty five, you know, at a certain point. So and I still have a stock that I can sell, I can decide to hold on to. Maybe it it it, it it pays dividends.

There’s potential for it to go higher.

And and, of course, if the index tanks, there’s always potential for it to go higher too. But we have an option that expires, and at that expiration, we could be, you know, we could be required to pay a lot of money, at expiration on an uncovered put in the index. So, so I don’t do it. You know, I’m I’m very much about risk management. When when I make a trade in some other services and it’s very speculative, I let you know, and and I make that very clear.

And when I’m not swinging for the fences, and this service certainly is not swinging for the fences. This service is about churning income every single week. You’re just generating that income steadily.

Then it’s a conservative strategy, and we wanna make sure we are protected on the downside. That’s what that’s you know, we don’t ever wanna have a situation where, you know, where where we our portfolio gets wiped out because, remember, you know, we’re we’re not swinging for the fences here. You you might buy a penny stock and say I’m willing to take that risk of losing the entire investment because I can make ten x on my money in a short amount of time. Here, we’re making hundred ninety dollars, two hundred forty dollars, three hundred fifty dollars at a time, so we don’t ever wanna be in a situation where we’re down twenty thousand dollars.

Fidelity shows expiration dates in the middle of the week, so one could pick a date just before the three week time frame, maybe have the same net effect. Yeah. So there are our expirations that are, with during the week as well. You know, we’re we’re doing the Friday expirations.

It’s just, it’s kind of an easier thing. It’s the end of the week, and it’s also in our back test what what showed the best results. Having it Friday, also having that decay over the weekend, is kind of a nice thing.

So CalTrader says it will cost you five dollars per contract if you close the August twenty ninth trade. So, again, I won’t fight anybody too hard who decides that’s that’s what they wanna do and and not have to worry about it for next week. And, again, there’ll there’ll be a little bit of commission. You know, it’s it’s pretty tiny. I won’t fight you too hard, but I’m I’m leaving the trade open because, really, I I want that extra five bucks. And right now, there’s a a pretty good chance we’ll be able to hang on to it.

So a lot of people asking about using Thursdays as the expiration date to free up the money for Friday trade. So maybe that’s another thing that we’ll look into, you know, on the back test and and see what happens if we closed out on every Thursday afternoon, to free up the money. That’s a that’s a really interesting point that a lot of you guys are bringing up. And for the first time, I think. I haven’t seen that in the chats, until today. So interesting stuff. So, yeah, maybe we’re gonna look into that and see, if that makes a difference.

Alright.

Can you place the buy to open in the first leg? That’s what my broker said to do. They’re saying that would be the same. It doesn’t seem correct to me.

You should be able to to trade it as a spread, and and I prefer that. That way, you don’t have exposure just on one leg if the market starts to move, just even in in that short period of time that you are placing the trade.

So you I mean, you could do that.

And and if you were going to trade one leg at a time, then, yes, I would recommend buying the put first rather than selling it, again, because of that that unlimited exposure, when you’re simply short the put. But you should be able to do it in one trade. You know, most of the most of the brokers allow you to do that, and and it’s kind of a a really nice thing to be able to do so that you know exactly the the credit that you’re getting at any time.

Alright. Let’s see.

Could you please tell me what I should read on Thinkorswim before calling Schwab to get approved?

There was somebody I am not familiar with the options thing on Thinkorswim.

I know somewhere on Thinkorswim, I don’t have it open right now. Somewhere on Thinkorswim there is a tab about education.

So there should be some information on options or you can do a search for options, and that might be able to help you.

Also just Schwab dot com I know has information on options as well. Again, go to our website.

But, yeah, on Thinkorswim, there is an education tab, and you should be able to find the options.

Let’s see.

Alright. Starting to wrap up here.

Accidentally executed the September nineteenth instead of the September twelfth. What should I do?

That’s a a tough question because that would be considered personal advice. I can’t tell you specifically what you should do. What I usually recommend anytime anybody makes any mistake on a trade, and and usually the common mistake is they inverted the strike price and they end up with a net debit. This is a little bit different.

But generally speaking, whether it’s here in weekly income alert, whether somebody buys a call instead of a put in, or put instead of a call in one of the other trading services, generally, what I recommend when you make a mistake in a trade is exit the trade and put on the correct trade that you wanted because, you know, there’s a specific reason that you entered the trade that you or for the trade that you wanted to get into. And if you are in a different trade, that’s an entirely different situation. In this case, it’s not that different. It’s an extra week.

So you probably got a little bit higher of a of a credit, which is positive, but now you have an extra week of exposure.

You know, what I can tell you is in our back test, the three week time frame was the most profitable. I I don’t know what it was for four weeks. I doubt it was radically different, but it it was probably different, or it was different. I know that three weeks was the optimal time frame in our back test. So, you know, what I always recommend when somebody makes a mistake on a trade, exit the trade, and, and then put on the the right trade.

REG says we only make money on the credit. Right? Yes. So the money that we collected today, that’s the money that we’re gonna make. If the trade goes to zero, which is what we want, then that’s that’s the entire amount. So you know right from the get go the maximum credit or profit that you’re gonna make on the trade when you place that order.

Let’s see. Please explain how to exit a trade. Great question, Stan. So we’ll basically just do the opposite.

We will remember, we did the sell to open the twenty two sixty, buy to open the twenty two fifty. We would do the opposite. We would buy to open oh, sorry. Buy to close buy to close the twenty two sixty, sell to close the twenty two fifty.

And then we could put in a limit price, if we needed to.

That’s that’s really the the simplest way. Also, on your brokerage account, usually, there’s a way assuming that you entered the trade as a spread, not one leg at a time, usually, you can put closed trade and it will automatically populate it for you. You can definitely do that on Schwab. If you click on the on the, position itself and click on close, it will populate the closing order. And then if you wanna adjust the the net debit, because you it will be a debit if you close the trade early, then you can change that limit price. But, it will automatically populate the right the right options for you. So that’s, that’s the best way to do it.

Robert seven says, what what’s a fifteen dollar difference? I assume you’re talking about the strike price. So that would be fifteen hundred dollars minus the the credit. So the difference in strike will always be that difference times a hundred, and that’s the most amount of cash that could come out of your account. So fifteen point difference in the strike means fifteen hundred dollars could come out of your account. But, again, you’ve had a net credit, so your max loss would be fifteen hundred minus the net credit.

Bob h, is this being recorded? Yes.

We send the recordings out a little bit later in the day.

Alright. Let’s get one last question.

See, scrolling up.

We only make my alright. I answered that question already.

How do we get notified if you decide to close a spread early? Great question from Clint five one one one. I send out an alert.

Just, you know, if if, let’s say, it’s a Wednesday morning, I put out an alert, hits your inboxes, hits your phone as a text message, and then, you’ll be notified to make the trade. And, again, I don’t place that trade until, that’s hit your inboxes. So, you know, my personal account, I’m not trading until you’ve had the chance to get in and get out. But, yeah, that’s that’s what will happen.

The the one time we did exit early happened to be on a Friday morning, so I did it live on this broadcast and and showed exactly how to do it. But assuming that it’s not a Friday morning, then, it’ll it’ll just be an email or an alert. And the reason we’re doing it that way rather than a broadcast is because if we need to get out early, we need to get out. And so the time it would take to send a message to everyone saying, hey.

We’re gonna go live in ten minutes or whatever. You know, most people might miss that, or they might not be able to log on.

So, really, the the quickest way to get you out of a trade if we need to get out is send that alert right away. So that’s how we’ll do it. If you have any further questions, that were not answered today, feel free to shoot me an email, mailbag at oxford club dot com. Again, I can’t answer you know, I can’t give you personal advice, but can certainly talk about the strategy, how it works, the mechanics.

Again, you know, look at your broker’s websites for education. Look at our website for the educational stuff if you need it. And, again, let me know how you’re doing. Love to hear how well you guys are doing on this.

And next week, we’re gonna try to scale this back to probably closer to a half hour if we can. The idea was always, you know, get in, make the trade, get out, get on with your day, but certainly we’ll we’ll continue to answer your questions. So thanks everyone for watching.

Thanks for tuning in. Thanks for being subscribers, and I will see you next week.