What's up everybody, it's your boy trey back again for another video today is a pretty cool day. We have an opportunity to look at something from a cool handle. His name is dave, hebert underscore who tweeted out something quite magnificent, and i wanted to be able to take the time to talk about it. Guys check this out.

I thought this was a pretty cool learning opportunity. Are you tired? Are you tired of uh the the sell-off that we've had, which which, by the way, uh something pretty pretty interesting happened at the close yesterday that uh and i'm quite satisfied with or more specifically, the open uh that i'm quite satisfied with we'll talk about that later? Uh, but this this, i think, played a partial role uh and i wanted to be able to take the time to talk about it. We're gon na keep this nice and short amount of function, advice, not financial supplies. Please go to safeguard salt uh.

What you see here is unusual whales. This is a platform that sort of tells you uh, live options flow as it's rolling through and if you have no interest in this, that's all right. You can click off whatever uh, but i i actually want to take the time to talk about this, because this is an interesting, short-term bet. Uh.

I personally would not have gotten that deep out of the out of the you know the money on this, because, as i'll explain to you a little bit, you know you might have to pay a little more than is presently trading uh for the time being. That's all right, let's, let's kind of talk about what this is. So what you see here is a a sold put there's a whole bunch of you can see. The side right here is sell.

Typically, this will say either buy or sell. You see calls starting to roll in you see, sell orders right here on puts i find this to actually be a lot more indicative of what could come in the future for the stock right now than any massive amount of bullish flow. That's coming in, and i want to tell you why uh what i mentioned in yesterday's video was an imbalance on the options chain right you look at uh, you look at the at the money calls right now. These are currently trading for 56 cents.

You look at the puts at the money uh, and these are trading at about 54 cents, so they're slightly more expensive, there's a much larger gap yesterday, and this is sort of starting to change uh once again here today, as we're looking at sort of what's rolling In on the stock right, this, this balance and what you're kind of starting to see with the balance in terms of premium cost uh for each of these designated uh, you know call and put situations fluctuates because of demand. This right here is a shift to uh the put side becoming more expensive. Why is that a sold put is actually bullish. Now i know the word put.

The word point is a bad bad bad word, but i'm actually happy about this, because this is this. Is the opportunity where i can, where i can talk to you guys about this and say you can actually be excited about this, whether you agree or disagree with my theory or you don't agree with my theory or whatever right check this out selling puts is bullish And i want to explain to you why, so if you were to think about the opposite, sides of trades right, you've got long puts and you've got short puts, uh or essentially selling puts right. A long put is the right, but not the obligation to sell 100 shares of stock at any designated strike price. So if i had a long put - and i decided to exercise this and let's just say that it was at 18 and uh - we happen to close tomorrow at 16, we close on thursday of the market this week right, i would have the ripe and not the Obligation to sell 100 shares at 18 instead of at the closing price of 16., but at the opposite side of every single trade is the person who sold the contract right.

This would be considered a short put most of the time. The market makers are the ones who are selling these. These puts or calls or whatever, but people do play this and there's sort of two different ways that you can play a short put, which is cash secured and naked. Both of these being bullish naked puts having inherently far greater risk uh and we'll get into that sort of, as we go on, it's not quite the same as uh that make it short it can.

It can really you over if you're, not careful, but i found this to be of interest so check this out. A short put is an obligation to do something if it happens right, it's an obligation, not a right uh, because what you're doing is selling to this guy, who has the right, but not the obligation right so on the opposite side of this trade. If, let's just say that we were to sell, puts we look currently at what is happening with uh sort of the the chart and the flow that came in, you can see a whole bunch of freaking 25 puts that got sold, uh ranging in different premium dollar. Thirty thousand here, eighty six thousand hundred twenty five, two fifteen, twenty six, thirty one, eighty six, you can see how drastically this is.

I mean there's a lot of money, a lot of money rolled in on these uh. These sold twenty five dollar points, which is inherently bullish uh. What does this actually mean? So if what we have here is sold 25 puts the opposite side of that means that somebody went long on 25 puts whether it was a market maker or his retailer. As an institution uh, somebody on the opposite side of this is now along on a 25 put, which means this is currently in the money.

What does that mean for the long position? It would mean that they have the right, but not the obligation, to sell stock at 25 right well, if they're selling it who do they sell it to the opposite side of the trade. A short put right, these guys selling a 25 point, means that they have the obligation as of right now to do the exact opposite thing: to buy 100 shares at a designated strike price. If the long side of the trade ends up expiring uh in the money and they decide to exercise, so what would this mean? They have to buy a 100 shares at 25 instead of whatever it is trading at, especially if it's above right. This is actually a way that you can buy stuff for cheaper.

If you think, in the very short term, a stock is going to go up significantly. That's the thing that can happen right uh, so you are the opposite side of this. If you're long put, you have to sell 100 shares the right, not the obligation to sell 100 shares if it expires in the money at your designated strike price in this situation. If it is in the money and this guy exercises, you have the obligation out the right to buy that 100 shares for him at that strike, price to sell right, uh or or you're, yes, more so you're buying it from the guy who's selling.

It makes sense. So far with that being said, there's sort of two ways you can play this cash secured puts, which is essentially collateral, uh your broker, if they don't suck. If they're, not a piece of well, we'll, basically say hey, we need cash secured here as collateral. If and when uh this ends up coming to fruition, and you are obligated to fulfill this transaction uh, so a cash secured put in this situation would mean that, for these 25 puts that were sold, they will set aside all the money that would be necessary to Buy 100 shares at 25.

So what you got to do really quick here is 100 times 25. You just add, you know, add the zeros to this and you get kind of get what you got to look at. That's how much cash you have to set aside and they can put you - do not have to put up cash collateral uh. They would just expect that hey.

If you are obligated to buy this stock, we will need you to deposit money. You're gon na get a margin call uh naked puts, i think, are typically pretty risky, we're not gon na dive into that. I want to be able to discuss two sort of takeaways from this. As i i kind of find important selling, these 25 puts what was sort of the benefit of this well, inherently one thing that it does is, it makes puts uh more expensive.

It would make calls the call and put sort of demand equal. It's inherently a good thing: it's going to force market makers to look at this put and say huh i'd kind of enjoy collecting this premium right here, uh, if it's at all possible and which is what this guy would would be doing if he didn't sell 25. Put, he really must feel confident uh in the fact that this is this is likely going to uh go over 25 by tomorrow. I, i think, that's a pretty risky bet.

This is more of a yolo to me, uh, if you're, if you're comfortable buying these 25 puts you know, then so be it. You do what you got to do at the end of the day. Uh, i i i that's that just kind of is what it is this is. This is one of those scenarios where, if you don't want to buy the stock for more uh, what you would look to do is buy it deeper in the money right, you'd be looking for, maybe like a 10 or a 12 or a nine nine.

A nine dollar sold put because then, if it runs and you're obligated to buy you're buying it for a lot cheaper right, that's sort of the risk at hand here right rather than collecting premium. So that's apparently a good thing right. It's going to balance sort of the demand between these two things, so they're closer in value. The other thing is that this typically means somebody in the very short term is making a bet that the stock is going to go up violently uh compared to where it is right now, which is not quite there yet right.

This stock is trading at 1796. uh, but there is sort of a good sign that uh i did not discuss yesterday. I'd like to there's falling wedge check, this out broke out of the falling wedge. What did it do after that? Bounce bounced right off of the tip of this falling uh support line, which is previously resistance, and that bounce off of that support line and the follow through is what i'm the most happy about.

Right. That follow through going into today is inherently a bullish thing, and i'm pretty happy to see that, and i want to be able to discuss that as uh as i see that it's kind of matched up with sold puts uh sold, puts typically meaning bullish things uh. You can kind of get jack nipples here, so uh grand grant takeaway. You know we'll make another video here later today, but the grand take away for me is uh this.

This put situation, no matter how you look at it, no matter what you do, no matter. What you say, uh is inherently bullish and i kind of thought that was a good thing. That's not bad! It's not a bad thing to see. Uh and i've got.

I've got some more stuff to talk about here later today. So i wanted to chat about that. I thought this is a pretty cool thing uh to see, and i suppose that's what i got so uh i'll be back later appreciate: y'all catch y'all, later much love light taps peace.