Hello!
As you can see, this is not a formal email, and unfortunately, it does not mean anything good for you.
BUT do not despair, it is not critical. I am going to explain to you everything right now.

I have access to your electronic devices, which are the part of the local network you regularly use.
I have been tracking your activity for the last few months.

How did that happen?
You visited some hacked websites with Exploit, and your device was exposed to my malicious software (I bought it in Darknet from specialists in this field).
This is a very complex software, operating as Trojan Horse. It updates regularly, and your antivirus can not detect it.
The program has a keylogger; it can turn your camera and microphone on and off, send files and provide access to your local network.

It took me some time to get access to the information from other devices, and as of now, I have all your contacts with conversations, info about your locations, what you like, your favourite websites, etc.

Honestly, I meant nothing bad at first and did that just for fun. This is my hobby.

When I hacked into your mail_account, your password was: 18831883

But I got COVID and unfortunately lost my job.
And I figured out how to use “my hobby” to get money from you!
I recorded a video of you masturbating. This video has a separated screen, where you can be easily recognised; also, it can be clearly seen what sort of video you prefer.
Well, I am not proud of this, but I need money to survive.

Let’s make a deal. You pay me as much as I ask you to, and I won’t send this video to your friends, family, and other acquaintances.
You should understand, this is not a joke. I can send it by email, through SMS-link, social media, even post it in mass media (I have got some hacked accounts of their admins).
So you can become Twitter or Instagram “Star”!

To avoid this, you should send me 1,290 USD in Bitcoins on my BTC wallet:1MK7VnGrPM8T8Z7jm3b4V6FDinSNHbUAyt

If you don’t know how to use Bitcoins, search it in Bing or Google <> or other stuff like that.
I will delete the video as soon as I receive the money. I will also delete the malicious software from your device, and you will never hear from me again.
I’ll give you 2 days, that’s more than enough, I think. Time tracking will start as soon as you open this email, I am monitoring this!

And one last thing:
It makes no sense to report about this to the police since I am using TOR, so there is no way to track Bitcoin transactions.
Don’t respond to me (I generated this letter in your account and put the real address of the man who has no idea about this). In such a way, I make it impossible to track me.

If you ever do something stupid or against my expectations, I will immediately share this video.
Good luck!

This is an email message sent automatically by Microsoft =
Outlook while testing the settings for your account.

Time comes when you’ll want to trade live rather than in simulated mode. Here are some things to consider as you contemplate this transition:

• Don’t begin trading live until you become consistently successful trading paper.
• Before applying any successful trading strategy in live trading, understand how and why it is successful. Being lucky is not a good strategy.
• Use a live trading platform that is as close a match as possible to your simulated platform.
• Learn all you can about differences between the simulated platform and the live trading platform. For instance, paper options trades on Thinkorswim are never subject to early assignment.
• Do thorough tax planning. Understand how a standard margin investment account is different from a Roth IRA. Choose an account type that will be consistent with your best interests.
• Don’t hesitate to return to the paper platform whenever your profits fall or turn into losses. Market behavior is dynamic. What worked last year may not work this work this year.
• Don’t change your trading approach without returning to paper trading to test it thoroughly.
• Start slow. Test the waters before you dive in.

[responsivevoice_button rate=”0.9″ pitch=”0.5″ volume=”0.8″ voice=”US English Female” buttontext=”Play”]This week ends a full year of studying options by extensive paper trading using a variety of approaches. I’ve learned a lot about what kind of trader I am and the ways I can make a profit, at least on paper. It’s far more than can be thoroughly covered in a single blog post, but I can write a few headlines.

First, what I’ve learned about myself as a trader:

• I am risk averse.
• I’m better at predicting what will happen today and tomorrow than what will happen next week.
• I am impatient to see results in my trading.
• I will spend too much time on the trading platform.
• I have become disenchanted with all the financial pundits and self-proclaimed experts.
• Success in paper trading has given me a great deal of confidence that I can avoid losing. Still, I worry that I may not make a consistent profit.

Now, a random list of what I’ve learned about trading:

• Vertical spreads are a good way to define the max risk of a trade. They also simplify determining a profit target.
• When a trade turns bad, abandon it before you reach the max loss.
• Always know what your acceptable risk is and at what level you will take a profit.
• As the value of your trade increases, keep track of how the increase in value affects the trade’s risk profile. Adjust accordingly by scaling out of the trade or closing it.
• A 2% return on a trade after a single day is better than a 10% return after five days.
• Technical analysis of price charts is a belief system. It works only when a critical mass of traders think it will work. Volume can indicate if belief has hit a critical mass.
• Think of those you trade with as customers. Try to understand their thinking, and use that understanding to your advantage.
• Treat a trade like a negotiation. Submit limit orders at levels that work the range of premiums in the current market to your favor.
• Learn how various order types work. Rely on conditional orders such as OCO (one cancels the other) orders, sequenced orders, etc. to simplify and organize trading activity. Doing this also adds a bit of automation to your trading process and helps provide some emotional distance to coolly analyze your trading plan away from the heat of the front lines.
• Pay attention to corporate actions such as earnings reports, distributions and splits.
• Understand volatility–both historical and implied. Volatility can be your friend or your enemy. Know if it’s on your side.
• Trade the issues that others are trading. High open interest, high volume, and tight spreads make for successful trades.
• Control risk on the portfolio level as well as on the trade level. Learn how to beta test your portfolio against an appropriate benchmark.
• Review you’re trading activity frequently. Trading is a data-centric activity and the data you create as you trade may be the most valuable data you have for improving your acumen as a trader.
• Find a small group of traders that you can meet with to discuss your progress and theirs as traders. Like many other things, enlightenment takes a village. And hanging out a bit with those who prosper in this curious trading game will broaden your understanding of the financial market and its potential for growing wealth.

Key take-away: Hopefully this year’s lessons can be a springboard to next year’s success.

[responsivevoice_button rate=”0.9″ pitch=”0.5″ volume=”0.8″ voice=”US English Female” buttontext=”Play”]Trading a futures index like ES bears a lot of similarities to trading indices like SPX or XSP. But there are significant differences as well. Before you start trading futures contracts or their options, it would be wise to study them in a systematic way. Your broker may offer learning resources, and you can take courses elsewhere. The CME Group, a major marketplace for derivatives trading offers introductory and advanced courses in futures trading. Take a look at them before you jump into trading.

Option contracts on ES futures expire daily, Monday through Friday. You can buy and sell them overnight. They are highly liquid and tend to have lower margin requirements. You’ll have to apply to your brokerage to secure permission for trading futures and your broker may require your account to have a minimum balance. TD Ameritrade, for example, requires a balance of $25,000 for any account that has futures trading enabled.

ES options, like index options, are cash settled and cannot be exercised early. Because ES options trade 23/5, they may be attractive to traders who are unable to trade during the hours that the NYSE is active. They can also benefit traders who like to set up orders for overnight trading, or who wish to respond to reports that appear outside of normal trading hours, such as earnings reports and late-breaking news.

Key Take-away: Investors who fully understand futures have increased opportunities for profiting from trading.

[responsivevoice_button rate=”0.9″ pitch=”0.5″ volume=”0.8″ voice=”US English Female” buttontext=”Play”]Play Trading an index is a different game. The best known and most traded index is SPX. You can’t buy shares of the SPX, but you can buy and sell options. And many, many people do. Since the SPX doesn’t have shares, options on it cannot be exercised, which means they cannot be assigned. At expiration settlement is made in cash. Consider what that means when you sell a vertical spread. In a normally settled American option that is settled by the exercise of ITM contracts at expiration, you may find yourself in the uncomfortable situation where the short leg of a vertical spread is ITM while the long leg is OTM and expiring worthless. This means that the spread will now longer have a defined risk. See an earlier post for a detailed example of this risk.

Strikes on SPX are $5 wide, and option contracts are expensive; however, bid-ask ATM spreads typically run less than 5%. APX options with their high volume and volatility provide many opportunities for traders who follow the S&P 500. The SPX offers contracts that expire every day Monday through Friday.

A less pricey choice for trading an S&P 500 index is XSP, which trades at price 10% of XPS with dollar wide strikes. It has lower volumes than SPX, but narrow spreads. It offers contracts that expire on Monday, Wednesday, and Friday every week. NDX and RUT are similar cash-settled European style options that serve the Nasdaq and Russell indices.

A similar trading choice is to trade /ES, the E-mini S&P 500 futures. Trading options on futures has additional twists that I’ll discuss in later posts.

Key Take-away: Trading options on indices differs significantly from trading options on equities or EFTs. Be sure you understand the differences.

[responsivevoice_button rate=”0.9″ pitch=”0.5″ volume=”0.8″ voice=”US English Female” buttontext=”Play”]Here’s a trade from last week. It consisted of two credit spreads. One was a put spread, the other was a call spread The strikes for each spread were 1 dollar wide. I based the limit order on althe price action associated with each of the spreads which are displayed in the lower pane of the chart below. Both orders were filled at limit yielding a total credit of $1.46. At expiration, one spread was ITM, the other was OTM. The ITM spread had one dollar of intrinsic value, which goes in the loss column. The OTM spread expired worthless. Subtracting the one dollar from the 1.46 gain yeilds a profit of $46 on the trade with fees totalling $2.60 for a net gain of $43.40. The trade was open for about 45 minutes. Total risk for the trade was around $25.

Key take-away: Take advantage of volatility in spread pricing to open trades at a favorable level.

[responsivevoice_button rate=”0.9″ pitch=”0.5″ volume=”0.8″ voice=”US English Female” buttontext=”Play”]The box spread SPY written about in yesterday’s post has expired. SPY closed at $362.79. The call side of the spread expired OTM and the put expired ITM. We had received a combined credit on the spread for $130 ($40 on the call side, $90 on the put side). Because the call side was OTM, it expired worthless, and we kept the $40 credit. The put side, however, expired ITM on both legs, meaning that it retained its extrinsic value (the difference between the strikes of the spread) after expiration. The spread has us buying 100 shares of SPY at $383 per share and selling 100 shares at $382 per share–a net loss of $100. The $90 credit we received when we opened the put spread gave counterbalanced the loss at expiration, and our final loss on the put side of this trade was only $10. The table below summarizes what I’ve just described.

What would have happened if SPY at expired at $382.50? Then the short put would still be ITM, but the long put would be OTM. The short put would obligate us to buy 100 shares of SPY at a cost of $38,300. Meanwhile, the long put would expire worthless. We could, however, sell the 100 shares of SPY that we’ve been assigned at the market price when trading resumes on Monday morning. Unfortunately, we don’t know what level SPY will open at on Monday. We could get lucky, and maybe SPY will open higher than yesterday’s close. Or it could open yet lower. We can not longer define the risk we have taken on. On May 13, 2019, the S&P 500 gapped down 3.35%. An overnight loss of this magnitude on holdings of $38,300 would be $1283.05. The net $130 credit received on the four trade contracts would reduce this loss to $1153.05.

A final point: Remember that American options can be exercised early, which means that short contracts can be assigned early.

Key take-aware: Thoroughly and continuously consider potential assignment risks when managing trades. Don’t be like 1ronyman.

[responsivevoice_button rate=”0.9″ pitch=”0.5″ volume=”0.8″ voice=”US English Female” buttontext=”Play”]Below are orders for two vertical spreads on SPY that I submitted yesterday:

When these orders were submitted, SPY ranged between 375 and 378. The P/L profiles for each of these orders is worth our attention:

Notice that the two spreads compliment one another. Look at what happens when we combine them. I’ll refer to the resulting complex trade as a box spread:

Both of the orders were filled later in the morning, and gave us a position that maintains a $27 profit line no matter what the price of the underlying is. We’ve done the same kind of trade early this week with SPX, which is cash settled. SPY, however, works like a standard American option, which is settled with shares in the SPY ETF. After market closes, we’ll take a look at how things worked out.