The Proprietary Safe Wheel (It’s FREE) | 06/13/22

Every Monday morning at 7:15 a.m. Pacific time, in my live streams, I am fully revealing my proprietary Safe Wheel Strategy for free.  Using my 28 years experience, I’ve developed The Safe Wheel Strategy to cancel out the risks associated with the normal wheel strategy.  I also designed the system to only need my attention once a week on Mondays, and on rare occasions Fridays.  And this is what I call a Level 5 Strategy.

Now, what you see on the screen is The Trader Matrix.  I developed this to make it easy to distinguish between trading levels.  After taking over 30 online stock and options courses, I’ve found that I’m the only Level 5 trader that is not using portfolio margin.  Portfolio margin is used for large accounts over $100,000.

Now after 28 years, I’ve only found one edge in trading and that is selling option premium.  Level 5 Trade Systems are the only way to sell option premium efficiently and safely.  For a better explanation of the five trading levels, see the link in the description for the video called “The Five Stages of a Trader”.  

Okay, sound check.  Let’s see if this works.  Let me know if you can hear me now.  Yeah, sounds good?  Okay, good.  Let’s get started.  All right, so first thing, I always want to say is to make sure that you post any questions that you might have.  That way I can get to those before the live stream might end.  

Okay, let’s get to the first thing I want to talk about.  That is The Earnings Edge.  What happened last week?  And you can see my screen here, we traded Oracle.  Let’s see here.  Where is it?  Right here, Oracle.  And what I did was I broke-even.  Some of the students made a little bit of money; maybe covered their commissions.  But basically, we had a break-even week.  And let’s see here, my record is 14:4:3.  So I added to my ties.  That was a tie.  And if you look at the account, it’s up just a little bit here over around 4.5% to 5% with the market down at 20%.

Now, we’re officially in a bear market.  You can see that the market’s down.  $SPY is down $12 so it’s down, you know, looks like it’s at its lows for the day.  And we can see that–let’s take a look at the market because it’s pretty interesting at this point.   You can see from the beginning of the year down about 21%.  And I’m going to talk about my Premier Level 5 next.  And we started that on about April 8th or 7th right about here.  So since I started trading The Premier Level 5, we’re down about 15% to 16% and we are only trading with The Premier Level 5.  We’re only trading options on the $SPX.  

So we talked a little bit about The Earnings Edge.  Now, let’s go into The Premiere Level 5 account.  Okay.  And you can see we started this account with about $30,000 and we’re down,  I don’t know, $800.  So what would the numbers be there?  Around 2% to 3%.  We’re down but again the market’s down 15%.  Now, what’s happening is you can see…  Now, I always talk about The Premier Level 5.  About during that first leg down, you’re kind of going to go down with the market so we’re still in that first leg down.  So we started that first leg on Thursday and then we continued down on Friday and then we continued down again. So we’re still in that first leg, and that first leg always affects the P&L.  Now, once this leg kind of settles down and either really goes down hard and crashes (that’ll be a good thing); or if it starts going sideways (that’ll be good); or if it goes back up the account will recover.  We’ll see what happens.  I’ll report on this next week.  So there’s the comparison there.  [$SPX down] 15% [and] we’re down 2% to 3%.  So doing really well considering what we’ve had to contend with.  

All right, let’s get into our Safe Wheel.  That’s this account here, and we’re dealing with Macy’s. You can see Macy’s is down pretty good since last week.  You know, it’s coming down with the market; probably a lot of things are down today.  It might be rare to find anything that’s up today.  But [with] Macy’s being down, what happened last week?  We sold a put.  We basically started the wheel strategy over again, the normal wheel; but of course, we have our put.  We have our put hedge in there.  We’re right here at the 17 strikes.  So we’ve got a 17 strike long put.  We’ve got three of them far out in time, 158 days.  We sold a put last week.  We did not get assigned.  So that’s a good thing, because now the market’s down pretty good, or Macy’s is down pretty good.  And we are, you know, we have this hedge and we’re going to start the cycle over again.  

So we’re going to sell a put and then we’re going to buy a long a call, like a$5 call, just to hedge this hedge.  So let’s do that.  Go to the trade tab here.  We’re going to the nearest expiration cycle.  You can see we’re going to sell a put.  We want to get at least, you know, 1% of what Macy’s is selling for.  So Macy’s is around $21 [so] we want to get at least $0.2.  We could come down into this $19.50 strike.  Remember, we have the $17 as a put.  So the further we get towards the $17, we sell the put, the better off we’re going to be because  that hedge is going to work a lot better the deeper we get.  

But I kind of like the premium right here around the $20 strike.  So I’m going to sell here; pick up some good premium at the $20 strike.  And if we get assigned, you know, we’re covered at the $17.  So this is always a good thing.  When you are not holding the stock at all, you’re just holding the hedge; and then the the price of the underline goes down, you get a good strike price to sell.  When you sell the put.  That’s what we’re going to do.  I’m going to do the $20.  So I’m going to sell one of these, mid-price $0.42.  We’ll start at $0.43 here.  Okay, got sold.  Got filled quickly there.  Okay, so there’s my put.  

Now, I got to protect this hedge.  So I’m going to go ahead and go long a call just to protect this hedge.  In case Macy’s just shoots up like crazy, the hedge would lose a lot of value and we want to have some type of hedge against the hedge.  So I’m gonna go in the same expiration cycle and buy something around $5 or $6.  I might be able to pick this one up here or we’ll try for $5.  Of course, I’m only trading one because I’m trading a stock around $30 and I’m using around $5,000 in a margin account.  If I had $10,000, I’d be trading two of everything.

Okay, so that filled at $5.  So now we have our positions for the week and I won’t do anything all week on this.  Except for on Friday, the last 10 minutes [or] 15 minutes of the week, I’ll go in and check and see if this call right here is in the money.  And if it is I’ll sell it; but other than that, that’s the end of the management for this system until next monday.  And that’s what I like about it.  It’s a Level 5 trade.  We don’t really pay much attention to it.  I don’t even really look at Macy’s, except for just at the end of the day on Fridays and then in the mornings on Mondays.  And also, you can see I haven’t gone through every single scenario in the live stream.  Even though this trade is free, there are scenarios that have not occurred before.  And if you want to know every single scenario that can occur, I created a flowchart and that is available with a link in the description.  You don’t need the flowchart.  You can just follow me.  But if you really want to know exactly every scenario that could occur, that’s when you want to get that flowchart.

All right, let’s start answering some questions here.  All right so [iamtheone who knocks]: hi, would you consider a long straddle in the low $VIX environment as a good strategy?

No, because your probabilities are that you go long options that you’ll lose money when you buy options.  About 83% of the time, approximately, you’ll lose money buying options.  And that’s based on a Tastytrade study.

All right, Walter [Paul]: remind people to hit the like button. 

Hit the like button.  Thanks, Walter.

[Kevin Hawthorne]: good morning from Lakeland, Florida.

Good morning, Kevin.

Okay, let’s see.  Iamtheone who knocks: will you  consider a long straddle… 

No.  Yeah.  You already asked that question. 

Let’s see here.

All right.  [tron]: worried about adding this second tier in this environment.

Okay, so you must be in a different cycle than me because I’m not at a point where I’m going to add a second tier, but you shouldn’t be.  I wouldn’t be worried about adding a second tier because you have that put hedge.  You’ve got three long puts to back you up.  And if the market goes through those three long puts, even if you’re long 200 shares, you’re going to be okay.

Okay, Matthew [flaherty]: how do you best track if the overall position is profitable?

I look at my P&L, my net liq., in my overall position.  You mean per cycle?  I just run the cycle.  It either makes money or doesn’t make money.  I don’t necessarily say, “oh, you know, it’s making money.  I better do something different.”  I don’t really do anything different whether it’s making money or not making money.  I mean, there are probably some circumstances within the flowchart where I might look at that scenario but it’s pretty rare.  

Matthew [flaherty]: and are you looking at the previous weeks included basically starting from when you buy something… 

Yeah, that would be a full cycle.  Basically, when we buy or roll the long puts that would be the beginning of a cycle.  And when we get out of those long puts, that would be the end of the cycle.  But again, I don’t necessarily look at that cycle and determine what I’m going to do based on whether that cycle is profitable or not.  If I do it’s a very rare thing and it’s in the flowchart.

Okay, tron: if I added a second tier and sell a csp, would it make sense to select a strike that is lower than my original put hedge?

If you can get the premium, absolutely.  That would be like an a very good situation.  If the premium’s there you want to get as low as possible on that initial put that you’re selling.  Like the put I sold today was the $20.  If I could have sold a $10 put today, that would have been great.

Okay, Iraqi Trader: what about your Synthetic Dragon?

You mean is it still making money?  Yeah, it’s–I think–it’s up about 10% year-to-date.

Okay, let’s see.  I don’t see any more questions.  Unless anyone wants to add another question.  I can wait for just a minute.

Okay, I’m getting ready to end the broadcast here.  Remember when looking at an instructor, if the P&L is not real, what else are they trying to conceal?


Link to Safe Wheel Guidelines & Flow Chart

Link to my Earnings Edge Alert Service

Link to My Safe Wheel Back Tests GO TO

Link to The Trader Matrix Video

Creating Wealth If I Had to Start Over

Link to Premier Level 5 Trade Alerts

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