You could be missing out on an opportunity to generate consistent 7-10% yields in the stock market. Today I’m discussing Master Limited Partnerships (or MLPs) and 5 important points to consider if MLP’s should be part of your diversified portfolio. I did an extensive webinar on dividend stocks , if you weren't able to attend live you should catch the replay. From how to pick stocks, where to buy and sell them, and how to increase your yields! I also discussed MLPs. Today lets break down Master Limited Partnership's just a little bit more. 1.       What is an MLP, how does it differ from a normal stock?   MLP’s trade under a stock ticker but they are not structured like a typical company on the stock exchange. They often focus on energy infrastructure assets like pipelines oil, gas, coal, timber,  and storage facilities. Their structure leads us into the next consideration, and that is taxes!   2.       Tax Advantaged Investments.   MLP’s are considered a Pass-through entity, much like real estate syndications. There are General Partner’s and Limited Partners. The business is structured so that it is not subject to corporate taxation. However, the distributions to MLP shareholders are generally subject to income taxes . We are the  limited partners. This is why you see L.P. on the charts. As a limited partner be aware of the tax implication for you.   3.       K1-s take a while to arrive.   As a pass through entity, if you decide to trade these you should be aware that you will receive a K1 instead of a 1099-Div for your taxes. You likely will not receive your K1 until early April. I’m not exaggerating when I say I got a K1 on April 5th. I bring this up every time I look at EPD's chart, but I had already filed my taxes when the K1 arrived in the mail.   4.       High yields mean steady income. I have stressed why we should not chase high yielding dividend companies based solely on the dividend, did you watch the webinar ? MLP's pay consistent dividends, and when you combine a buy low, sell high strategy by waiting to buy the shares at support, MLP's help make a diversified portfolio. Everyone’s portfolio should have multiple companies in each category of stock. Adding some EPD to your PG, KO and ABBV seems like a nice combination! These are not specific stock suggestions, they are examples of stocks I happen to own.     5.       Interest Rate Sensitivity. Interest rate / Oil price risks- MLP’s are generally related to oil and gas pipelines. These companies are sensitive to changes in the interest rates, and the supply and demand can be impacted by the price of the underlying commodities. So if interest rates are already high and likely to go down perhaps these are more appealing. In low interest rate environments keep in mind this risk, although MLP's are generally still appealing because of the dividend yield the share price might offset some of your gains.   I think MLP’s have a place in portfolio’s where you are looking for a steady income through dividends, and when need some diversification outside of ‘boring’ dividend stocks.   I ’ll see you next week here at the blog. I'll see you much sooner in our discord  if you want to sign up! Happy Trading Good Kids If you enjoy this, perhaps you'd consider buying me a coffee . If you have feedback please let me know . I'm here for you! None of this is trading advice, it's for your education in hopes you can make money in the market as I have done. I’m basically just some dude on the internet who’s been trading 2 decades, and I use the stock market as my primary source of income. None of this is financial advice it’s purely educational!

We talk a lot about individual stocks in the blog, today I'm sharing 5 'secrets' on how to use sector SPDR Exchange Traded Funds (ETFs) in your portfolio! This information has made me lots of money in the stock market, it's a long post, but I can assure you that I'm giving you information other's charge lots of money to explain and I'm keeping it simple. These 11 ETF’s divide the S&P 500 (SPY) sectors. (Visit the SECTOR SPDR ETFs website for more information! A few of the graphics came from their site as well) There are pros and cons to using sector ETF's so identify you trading strategy and your narrative by asking yourself if you want broad exposure, or do you want a single stock. 1 Cons to consider about sector ETFs These ETF’s will likely not move as quickly as an individual underlying since they contain multiple companies. This isn't always a bad thing, but it can be. Let's look at XLF for a real life example of when I traded a single stock over the index. I posted this all in our discord , but I didn't explain the logic with as much detail as I am today! These are the top holdings for XLF During the "banking crisis" of 2023 I was purchasing JPM over XLF or KRE. I think JPM is best of breed in the banking sector, I didn't want exposure to other banks or financial institutions. Look at the chart below of XLF combined with the orange line which is JPM stock. JPM dipped just as much as XLF but it out performed XLF and as of today it's outperformed by almost 30%! This single decision to buy JPM made me more money than my annual salary working at a corporate job. I wasn't trading questionable banks, I wasn't buying the sector ETF because I knew best of breed outperforms! Remember this, it will happen again, perhaps a different industry, but capitalize on this! 2 Pros of Sector ETFs Here's an example of when I'd rather trade a sector over picking individual stocks! XLY is consumer discretionary stocks, the top holdings are: Consumer discretionary should drop as consumer’s start feeling the effects of rising interest rates, and possible inflation. You know the current environment we are in today! Instead of looking for individual retail, auto, hotels, apparel, etc. I wanted broad exposure to the entire sector. These two shorts in the past 2 weeks paid for a beach vacation, and paid my utility bills for the next two months. I took both of these trades in our discord , do you have a better understanding of why? This blog post explains why and how I use moving averages , so that’s how I “picked” my targets. Do you realize how easy this thesis is to make on your own? People pay thousands of dollars for the information I'm giving you today. I've made $100,000's of thousands of dollars doing what I'm showing you . No it doesn't always work, but you miss 100% of the trades you don't take. 3 Using Sector ETF's to hedge expensive stocks: If you don’t own 100 shares of a META, and earnings are coming up and you want some downside protection, consider a put vertical in XLC. Do you see how XLC’s top holding is META? This is a simple put spread on meta for earnings this week. IT would cost you 255 for a max profit of $245 This is similar protection in XLC that can make you $285. Yes, XLC will not move as much if META has a big decline, but look at your delta in both trades and the cost savings! Do you see how this is good for traders who have less than 100 shares or maybe want to speculate a bit? 4 SPDR ETs Pay Dividends: Did you expect me to write a blog post and not mention dividends? Afterall these are a key part of my trading. I have a complete series on dividend stocks . Sector ETF’s pay dividends! Just be aware there is an expense fee of .1%, but XLRE and XLE both yield over 3%. Here's a chart on XLE Side note: a possible trade idea as I think XLE is about to wave 5 higher! Maybe you could consider setting up a bull call spread! The dividend is quarterly so next dividend isn't until June, at which point you could buy some shares before the ex-div sell a call? Buy Writes are less volatile than a single underlying. That is a plus, just realize the covered calls often doesn't have as much premium as a single underlying. For every positive there is generally a negative in the market. Smart people make the markets! 5 Using SPDR's to speculate on market cycles: I’ve discussed how the market moves in cycles, so as money flows out of one sector, it generally flows into another sector. These individual ETF’s give you broad exposure to a sector, instead of all 500 companies in SPY. There are many different cycles and theories, from seasonality, economic, political, even psychological cycles that you can study. Sector ETF's give you an easy way to make an educated guess and get the exposure you think will make you money. You buy and sell (short) shares in these ETF’s but they have options! All normal strategies we discuss at Goodkidstrading for an underlying apply to the ETF, you can sell puts, trade spreads, the option aren’t always as liquid, but these are a good alternative in some situations. -- If you made it this far BRAVO! There is so much focus on individual underlying's that sometimes traders forget about the more boring ETF’s. I encourage you to build a watchlist of all 11 sector ETF’s, There are other ETF’s that should also go on this watchlist, I will cover that in a future article, so make sure you subscribe I’ll see you next week here at the blog. I'll see you much sooner in our discord if you want to sign up! Happy Trading Good Kids These blogs take hours for me to create, I'm sharing information that has taken me years of experience and expensive coaching. If you enjoy this, perhaps you'd consider buying me a coffee. If you have feedback please let me know . I'm here for you! None of this is trading advice, it's for your education in hopes you can make money in the market as I have done. I’m basically just some dude on the internet who’s been trading 2 decades, and I use the stock market as my primary source of income. None of this is financial advice it’s purely educational!

Trading without a plan can feel scary, sometimes trading with a plan is challenging for newer traders. But when you put math and the charts in your favor, trading with confidence is easier! Tastytrade does a nice job of displaying the probability of profit for options trades. Do you see the two red box below? The POP or (Probability of Profit) is the chance of your trade being profitable at expiration. The P50 is the probability of the trade hitting a 50% of it’s maximum profit before expiration. POP and P50 are calculated using a combination of historical data, mathematical models, and market analysis. I'm not going into that level of detail here, I can't even begin to try if I wanted! Lets look at the risk curve. Tastytrade also does a nice job of showing you where the share price of AMD can close for you to be profitable, and where you start losing money. The green shaded area is profits. So above if AMD closes above 133.62 you make money. Below you lose money on this put sale. If you are a more experienced trader this is all simple, you know all this. For our newer traders it might still be a little fuzzy. That's why you should ask questions in the discord thread for this blog! Not a member of our discord ? You should be! The information above is a great indicator you are making a high probability trade but I don’t stop here. I believe you can add technical analysis (looking at the charts) to add more “probability” or confidence to your trade. Do you see on the daily chart below we have a 200 moving average (the thick red line I highlighted? It's at 139.32. So selling a 135 put makes sense! Also checkout that purple box in the chart above from November to January. We have support and a moving average that should help support AMD if it suddenly drops. It looks like it could drop, the chart is a little heavy looking after all, but it's all above the 135 put we are considering selling. I always think you should zoom out! Let's look at the weekly chart. Do you notice I've highlighted two similar looking features in the chart below? We have a 50 EMA (enhanced moving average) on the weekly that at 141.41 slightly above the 200MA on the daily. This is extra confidence. I see support around 130 on this chart. Don't just look at the chart, think about liquidity and return as well! Consider the premium received the orange boxes above. Ideally I want 1% for every 30 days so the 135 put is paying more than 1.35 The option has plenty of liquidity as shown by the red box. The green box shows the bid ask spread is acceptable. You can sell a put for around 1.37 and you can buy a put for around 1.41. Of course we want the mid price... I’m willing to make accommodations for these factors based on how much I like the stock. This meets the 1%, the option is liquid and it has a nice bid ask spread! Just because this is a high probability trade, I don't want you to be mislead. This trade may not work. Even though we have built up a good thesis to why this is a high probability trade the 10% chance it doesn't hit 50% is real. But if you are selling a put you can let the put expire in the money and take shares of AMD at a discount and a nice level where there is support. You can turn this into a wheel trade . If you can’t afford to take the shares, you would want to close this if it closes below the moving averages. Remember you always need a plan for your trades. What I’ve shown you today is how I build an even higher probability trade that gives me more confidence in taking my trades. This is an example with a short put, but you can do this same thing with defined risk trades as well! Do you want to learn how I underwrite a stock trades similar to how real estate investors underwrite real estate deals. I'm hosting a webinar , Join GKT Newsletter , or if you are really serious I'll see you in discord much sooner. Happy Trading Good Kids! I provide all of this to you for free. If you enjoy this, perhaps you'd consider  buying me a coffee . If you have feedback please let me know . I'm here for you! None of this is trading advice, it's for your education in hopes you can make money in the market as I have done. I’m basically just some dude on the internet who’s been trading 2 decades, and I use the stock market as my primary source of income. None of this is financial advice it’s purely educational!

Hi Good Kids! This week I'm talking about a strategy I use when I want to earn income on my long-term stock positions without the risk of being called away. If you aren't already doing this, you should! Quick disclaimer before we get started, only do this on positions where you have 100 shares. The Challenge If you're like me, you want to hold onto your long-term shares but still generate some extra income. Theta decay is a key component of my income. Selling covered calls at resistance levels is a popular strategy I still use, but it has an obvious downside. If the stock keeps rising, you might end up having to buy back your calls at a higher price, or you have to let your long term shares go. There is nothing wrong with getting called away, but you do need to think about the tax implications and your overall investing timeline and strategy. The Solution: Bear Call Spreads A bear call spread involves selling a call option at a strike price above the current stock price and buying another call option at a higher strike price. You still collect a premium from selling the call option giving you income generation. The long call option you buy limits your risk if the stock price surges you have protection How It Works 1. Sell a Call: Choose a strike price above the current market price where you think the stock might face resistance. 2. Buy a Higher Strike Call: This call option protects you from unlimited losses if the stock price continues to rise. By using a bear call spread, you ensure that your long-term shares aren’t called away, giving you peace of mind. Benefits Reduced Risk: The bought call acts as a safety net, limiting potential losses. Cash Flow: While the premiums from bear call spreads are smaller than those from covered calls, they still provide a steady income stream. Flexibility: If the stock pulls back, you can close the spread early and potentially profit. Cons Reduced Cash flow: The long put is a debit, as mentioned this is a down side over a covered call. Assignment risk: the assignment risk is not totally gone, manage these before theta decay gets to the long call. If your short call is ITM and the long call is not, you can end up losing on this trade or losing your shares. Example Suppose you own lots of shares of Google (I know a guy who does...) GOOGL is currently trading at 175. I could sell a covered call at 185 and collect $126. Let's ignore it's a down day, you all know I don't like to sell calls on down days.. Just go with me here. This is the options chain showing the call we are selling. The 185 call, for 1.26 This is the risk graph. Notice after Google passes 186.22 our upside is capped so the 'max loss' here is infinite? We aren't losing money from our account, we are losing out on the appreciation of the shares because remember we'd be called away at 185 if google closes over 186.26 we don't get any more profits This is what it looks like on the chart Let's look at a bear call spread, this is the options chain. we are buying the 190 for debit and we sold the 185 for a bigger credit. So our total credit is $71 This is the risk curve. Do you notice our max loss went from infinite to $429! Less credit, less risk... We see this all the time. This is what it looks like on the chart. We are obligated to sell our google at 185, but we have the option to buy them back at 190 If google starts moving up to 185 obviously our short call will start losing, but the long call will appreciate in value to offset the loss. If google closes below both of these options we keep the credit we received. I generally manage these by taking them off together. If you are more advanced you can unravel them, but understand the risks if you turn a defined risk trade into an undefined risk trade! By implementing this strategy, you maintain control of your long-term shares and continue to generate income, even in a rising market. Selling bear call spreads is a nice way to keep your shares safe while still earning extra cash. It’s not as lucrative as covered calls, but it’s a smart trade-off for the security and steady income it provides for your longer term holdings Subscribe to the GKT Weekly Newsletter , or if you are really serious I'll see you in discord much sooner! Happy Trading Good Kids! I provide all of this to you for free. If you enjoy this, perhaps you'd consider  buying me a coffee . If you have feedback please let me know . I'm here for you! None of this is trading advice, it's for your education. I'm just some dude on the internet who’s been trading 2 decades, and I use the stock market as my primary source of income. None of this is financial advice. Any trades or decisions you choose to make are at your own risk, this is purely educational!

At Good Kids Trading (GKT), we approach stock trading a bit differently. Many trading groups only chase the high-flying growth stocks. GKT recognizes the often-overlooked power of ‘boring’ dividend stocks. Dividend stocks are categorized as value stocks. Value stocks have traditionally been around for more than 20 years, their growth has slowed down and they need to entice investors/traders with extra income from a dividend. Value stocks are seen as slow-moving compared to growth stocks. However, the Good Kids know that there's a valuable place for both growth and value stocks in a well-diversified portfolio. What if you get consistent guaranteed income using dividend aristocrats—companies with a long history of paying dividends AND you also get the possibility of growth by focusing on dividend stocks that are undervalued or overlooked by the market? That is cash flow and appreciation! Most traders focus only on the dividend yields, and when you look at the numbers they don’t get too impressive until you have a larger account.   Here’s a simple breakdown of a $10,000 portfolio of dividend stocks: A 2% yield provides $200 annually. A 4% yield, provides $400 annually. An 8% yield, provides $800 annually. These numbers aren’t that impressive on the surface. When you have a $100,000 portfolio and you add a zero these numbers are obviously more significant. This is why dividend stocks are more popular among older investors who have larger portfolio's. It doesn't have to be this way! Did you watch my webinar on dividend stocks? You can make money from the information I shared during this hour long video.     The GKT Mindset with Dividend Stocks: Dividends alone might seem like a slow path to wealth when you focus on the yield alone, but what if you can build a portfolio of multiple stocks that have the possibility of appreciating in share price? What does it look like when you have multiple positions that have 100 shares of each underlying and you start selling calls and increasing your yield even more?   I find opportunities by looking for dividend aristocrats that are: 1.       Buying shares when the stock is hitting weekly support 2.       Hitting daily or monthly moving averages. 3.       Selling puts in stocks that have high volatility before the ex dividend date (creating a ‘dividend’ by using the premium collected from the put sale) A wheel strategy. 4.       Looking at sectors that are under performing and buying the best of breed in the sector. 5.       Buying underlying’s in multiple sectors   Take Profits/ Have an exit plan before you enter the trade Lock in your profits using resistance on the weekly chart. If you do not have 100 shares you sell when the stock hits resistance (you can trim instead of selling all the shares). If you have 100 shares you selling covered calls when shares hit resistance.   Have an exit plan if the stock keeps dropping. You won’t always be right, and the stock market can remain irrational longer than you can stay solvent. Have a line in the sand where you cut your loss and find a new position. No one wants to be a bag holder, so don’t let ego win. Have plan for profits and losses!   Dividends are the most passive income stream available. With experience, you can find stocks that offer both dividend yields and growth potential. For those who prefer less hands-on involvement, high-yield dividend ETFs can provide substantial income, especially when dealing with larger accounts. At GKT, we emphasize the importance of a diversified portfolio that includes both growth and dividend stocks. It’s very powerful when you can take a boring dividend stock and find growth and consistent yields at the same time! Remember, trading is as much about managing emotions and expectations as it is about numbers. Make your trading mechanical by following the principles we teach! Happy Trading Good Kids! I provide all of this to you for free. If you enjoy this, perhaps you'd consider  buying me a coffee . If you have feedback please let me know . I'm here for you! None of this is trading advice, it's for your education. I'm just  some dude on the internet who’s been trading 2 decades, and I use the stock market as my primary source of income. None of this is financial advice. Any trades or decisions you choose to make are at your own risk, this is purely educational!

Success in trading is more than just having the right strategies or tools; it comes from maintaining discipline. Jocko Willink said it best: "discipline equals freedom." Though he was talking about physical training, this applies to trading as well. Emotions like fear and greed can tempt us to deviate from our plans, but discipline is important for achieving long-term success and avoiding costly mistakes. I’m sharing seven tips I use to stay disciplined in my trading routine, guiding you towards consistent and profitable trading.   1. Set Clear Goals Why are you trading? Money is not the reason. Trading for money isn't enough. If your goal is just to make more money, fear and greed will dominate your decisions. Define what the money is for—why do you want financial freedom? Your goal should be a powerful enough “why” that you treat trading as a business, executing your plan without letting emotions drive your decisions.   2. Have a Trading Plan Please do not confuse a trading plan with a list of strategies. A trading plan is process based. My plan includes steps like logging trades, writing reasons for each trade, and reading orders out loud before hitting send. My plan discusses keeping trading strategies as simple as possible, risk management, and allocation of assets for each strategy.  A good trading plan supports your goal of being a profitable trader and helps you stick to your why.   3. Keep a Journal Tracking every trade is really important. I know it’s time-consuming, but without it, you can't analyze what works and what doesn't. Use a spreadsheet. I have moved to an automated tool called Wingman Tracker to log my trades. I take a lot of trades each week so the cost makes sense to save me hours. Trade logs help you review your performance and make necessary adjustments. You need a spreadsheet to be successful over the long term.   4. Manage Risk Newer traders are all about the profits, making money clicking buttons is amazing! Focusing solely on profits can lead to disaster. Always have a standard risk amount for every trade. Keeping your risk small relative to your account size is crucial. Prioritize trades with a high probability of profit and remember, preserving your capital is as important as making money.   5. Stay Informed, but Block Out the Noise No one knows anything, it’s crazy to say but it’s true. Even if you know for sure what Jay Powell is going to do, you can’t be 100% certain you know how the market will digest the information. Look at earnings events, a company can report great numbers, but the CEO or CFO can mention something about guidance and the stock might drop 15%. Market opinions are everywhere, but no one knows for sure. Understand market cycles and focus on executing your strategies. Block out the noise and stick to your trading plan.   6. Control Your Emotions Trading is 85% controlling your emotions and 15% strategy. (I made that statistic up, but I believe it’s true) The fear of losing is everyone’s biggest enemy.  Fear and greed lead to poor decisions. Cut losers quickly and avoid holding on, hoping for a rebound. Have a plan for every trade and stick to it, regardless of market conditions. No one has made a dime panicking. Having knowledge and education, a trading plan, having a written sentence why you took a trade, and having an exit plan before entering a trade is how you control your emotions and make money in the market   7. Use Watchlists, Alerts, & GTC Orders You don’t need robots, you don’t need to pay someone $20,000 for coaching to make money in the market.  Use automated tools to make your trading more passive. Create watchlists, set alerts, and use good-till-canceled (GTC) or one-cancels-the-other (OCO) orders. This approach reduces screen time and helps you stay disciplined. Make it where you don’t have to be glued to a screen, let the trades come to you through your alerts, and let the broker take some of the temptation away for your stops and profit targets.   These seven steps will help you maintain discipline in your trading routine. Remember, discipline equals freedom. Successful trading isn’t just about making the right trades; it's about maintaining a disciplined approach. Implement these tips, and you'll be well on your way to becoming a more successful and profitable trader.   Happy Trading, Good Kids!   Justin

Selling puts are so cool, you already know this if you’ve read this blog or watch my trades in discord !  When we sell a put, we collect cash immediately with an obligation to buy a stock at a lower price. It’s a payday where you can be wrong and still make money!   There is one problem with put sales that not too many people think about, and today I want to change this because I want you get cash flow AND appreciation which is every investors dream! Lets quickly review why put sales are cool: Simple Setup and Management:   The trade setup for a put sale takes less than 5 minutes.  By combining math (probability of profit, expected range, standard deviations) with a touch of technical analysis it makes sense why put sales are my most profitable strategy over the last 10 years. Trade management is straightforward because we use a good till cancelled profit target and an alert at your puts strike price and we walk away and don’t even have to look! If the alert triggers, we either roll the put out in time for a credit, many times we can roll to a more favorable strike, or we take shares of the company at a discount. If the stock bounces, we collect 50% of the credit received and look for the next trade.   The downside of selling puts: When a put sale hits the profit target and you buy to close the put, or you let it expire worthless you received the income, but you don’t get any shares of the stock! You got the cash flow, but you have zero assets appreciating. Remember shares of stock are like assets. I talked about this in real estate mindset webinar! My shares of GOOGL, AMZN, COST, MSFT, WMT are assets just like a rental homes. If I only sold puts on these I wouldn’t have any shares today. So while many focus on the obvious risk of selling puts like market risk, capital requirements, and limited profit potential as downside of put sales. I think it’s important you realize that selling premium should only be part of your strategy. Considering using some of the premium you received from the trade to purchase shares after your put sell closes. A solution to the downside: I have a few different strategies for adding shares, but for simplicity and brevity let’s look at one strategy you can consider. Many times I sell puts on the same company over and over again as you've seen in discord . Rinsing and repeating what works! This chart shows my trades in HOOD from the last 6 months: I've sold puts 11 times in Robinhood. This is not a fabricated example, I’ve really done this. If Hood has a down day of more than 3% I consider selling a put. The put closes in a few days and I keep collecting premium. Every time 2 put sales close I buy a share of stock (for each put I sale). Depending on your account size this might be selling 1 put and buying 1 share, (or it could be 5 or 10). As your account grows, you can do a ratio where you keep some of the cashflow from the put and you buy less shares. More specifically if I sell a put for a credit of .20 and I close it at 50% I collected $10 in real dollars. Two successful trades is at least $20 real dollars, many times selling puts on down days gets us even more premium which is enough to buy a share of the stock. Assuming I only sold 1 put and bought 1 share from the 11 trades in the chart above after every two trades I have 5 shares of HOOD at a cost basis of $15.86  The stock is trading at $23.38 as I posted this blog. I’m up $37.60 on these shares, and yes it's going to take a while to get 100 shares, that's why adding capital to your trading account through savings is such a great way to compound your success!   Think about the risk of these shares, since I bought these using profits, what is my actual risk? Of course I don't want to imply you should let these go to zero because we bought them with profits, I want you to think about them a little differently than just the p/l you see in your broker. Every time we sell another put we are obligated to buy 100 shares, but the shares we buy with profits do have a different risk profile in my mind especially if I like the company and don't holding these for a longer timeframe.  Have a plan for selling the shares, but that’s an article for another day!     Summary: Keep in mind that the downside of selling puts in a bullish stock or bullish market is you don’t get the shares if the stock bounces. In real estate terms you got the cash flow, but you have no asset appreciation in terms of share price, unless you build a strategy to pickup some share from your put sale profits.   Happy Trading Good Kids! -Justin I understand the stock market can feel intimidating and complicated, if you want some extra support and guidance, I help people skip levels, schedule a free discovery call with me . Lets talk stocks and see if I can help you! Click on the image below and setup a time that works for you! This is not trading advice, it's for your education. I'm a dude on the internet who’s been trading for 2 decades, and I use the stock market as my primary source of income. None of this is financial advice. Any trades or decisions you choose to make are at your own risk, this is purely educational!

When I first heard “math-based options,” I’ll admit, I was a bit worried. In school math was not my strength or my favorite subject. It’s ironic that math-based options have become the main source of my income after ditching the corporate grind. Here’s the thing – the “math” in math-based trading? It’s really just common sense. We aren't trying to decipher a complex equation looking for x or y, there are NO imaginary numbers here! We are depending on our brokers, the Black-Scholes model, as well as the principles of probability and statistics to execute trades that are logical and make sense. Most people are either book smart or street smart, and that’s why math-based trading works for everyone. You see, I've been a math based options trader for more than a decade I just didn't know the term. Take selling puts, for example. I’ve been doing that to potentially own companies I like at a lower price. I look at the charts, I use support and moving averages to pick my strike and I made the trade. I never specifically thought about the “probability of profit” because it just made sense this was a good trade. It’s common sense that I want someone to pay me for the chance to buy a good company cheaper. Buying quality companies (the best of breed) when everyone is panicking has always made common sense to me without the actual need to check the VIX for fear levels. But knowing to check VIX is valuable. Using math to pick companies to sell options on? It just simplifies the whole process. Tracking a company’s implied volatility and understanding if the options we are trading are historically cheap or expensive gives us a valuable indicator on what strategies we should use. Buying options when they are cheap is smart, and using math here really has a real-life application and reward. So, if you’re not a math whiz, don’t sweat the term “math-based trader.” Think of it as a structured way to approach trades, giving you confidence and a safety net if things don’t go as planned. Remember, trading success is mostly about mindset. Even if you didn’t like math in school, learning about math based options trading makes common sense and you get paid money as your reward! I'll catch you here next, I'll see you much sooner if you join our free discord community. Happy Trading Good Kids! Justin I understand the stock market can feel intimidating and complicated, if you want some extra support and guidance, I help people skip levels, schedule a free discovery call with me. Lets talk stocks and see if I can help you! Click on the image below and setup a time that works for you! This is not trading advice, it's for your education. I'm a dude on the internet who’s been trading for 2 decades, and I use the stock market as my primary source of income. None of this is financial advice. Any trades or decisions you choose to make are at your own risk, this is purely educational!

Investing for the long term is relatively straightforward: you let time and compounding work in your favor, and you simply wait. As Warren Buffett famously said, "The stock market is designed to transfer money from the active to the patient." But what if you could make trading more passive? At Good Kids Trading, we emphasize having a plan that leverages a high probability of profit while using math to your advantage. Does it work every time? Absolutely not! Nothing does. However, there are some similarities in math-based options trading and longer-term investing that I just can’t ignore, and I don’t think you should either! Do you remember when you were a kid and you wanted to go outside and play, but your mom said you had to clean your room first? You’d throw all the clothes and toys under your bed, then proudly proclaim “done!” That happens with traders, too. You see the “profit porn” all over social and trading communities: bragging about doubling their accounts, talking about how well their funded accounts are working for them. But you don’t see what’s under their bed, or the pile of losses stuffed in their closet. Short-term trading can be emotionally taxing as you buy and sell on a quicker timeframe. Some traders consistently profit over the years, but many realize that buying low and selling high in the shorter timeframe isn’t quite as easy as it seems. If you invest in a company that is growing and making money, over time you’ll likely make money as the shares appreciate (and possibly collect dividends). Trading on a shorter timeframe does have the potential for more wins, but you can also incur greater losses. Every time you lose, your next trade needs to make up for the losses before you start making profits. This is why we stress looking for more than a 1:1 reward-to-risk ratio on trades. If you want to be a day trader, no problem. I've explained why day trading is not for me. But don’t hide all your losses in the closet and keep adding more money as the hole gets deeper quickly, leading you to think trading is impossible. Consider combining statistics and probabilities, aka math-based option trading, to find an edge. Selling puts is my favorite strategy because I can be wrong on a trade and still get a second chance since shares never expire. Even if the put sale goes against you, all you have done is bought a stock lower than you would have initially. As the legendary investor Charlie Munger put it, "The big money is not in the buying or selling, but in the waiting." When you have trades that benefit from theta decay, you get paid to wait! If you incorporate trades like put sales into your toolkit, you get a second chance. I believe there's a better way than solely investing for the long term, but it depends on your time horizon and your willingness to learn and execute a trading plan you believe in. To be a profitable trader, you have to avoid the trap of hiding your losses under the bed so you can go outside and play with your friends. If you're interested in learning more about math-based options trading, you’re in the right place. Good Kids Trading is focused on making trading simple and profitable for people who are busy living life! We aren’t chasing huge returns or trying to time every trade perfectly. We’re focused on trading for passive income and living our best life. If you need help reach out to me, join our community. I’ll see you here next week, hopefully I’ll catch you in our Discord much sooner than that! Happy Trading Good Kids! Disclaimer: this is NOT financial advice. I’m basically just some dude on the internet who’s been trading a while, and I use the stock market as my primary source of income. None of this is financial advice it’s purely educational!

Doji's indicate indecision. I look at weekly charts every weekend.. Here are some interesting weekly charts I'm watching. Not much text just some charts and a quick description. SPY- pretty weekly doji candle. are we going to break up or down? MS- look at that consolidation, some hammerish candles ending in a nice doji... Higher? I try to avoid pharmaceuticals, but this looks cute: Cloudflare doji: cute candle on Delta, is it going to breakout higher? is carnival cruise going to leave the port? I'm already in so i hope so. Cardinal health going to continue to rip higher? EBAY looks like it might continue higher XOM going to break out of this little range?

Although Good Kids Trading GKT is mainly focused on option trading using math and probabilities we differentiate ourselves because we also look at the charts. We believe there is value in technical analysis as each candlestick on the chart represents price action during that time period. Many day traders use charts for smaller timeframes however at GKT we like to look at the bigger picture. Get a higher level perspective if you will. Today is February 1st, so we have new monthly candles. I want to review some interesting charts that I'm watching. It doesn't mean I'm going to take a trade, these are not Guaranteed winners or the easiest trade ever, but they are just another input when you are working on building a trading thesis and looking for check marks on building high probability trades. The S&P500 reached all time high’s in January, yes there was some profit taking as seen in the upper wick, but we still have a pretty powerful monthly candle. As you see on my chart I like to look for Elliot Waves, although I’m not nearly perfect in following the theory GKT discord members know I post the 4 and 5 wave count before the candles appear. Not always right, but it’s just another indicator to help me build a trading hypothesis. QQQ closed the month at all time highs as well!  I zoomed out on this chart because look at the huge run we’ve seen in the tech sector. It’s very hard to call bottoms and tops, there was lots of talk of a double top on the QQQ’s but remember stocks don’t normally go straight up, so when you see a pullback and you see a possible double top forming, this doesn’t mean you change your entire bias. You just get a little more cautious until you see the trend get broken. We broke right through that bearish trend line.. Pretty bullish so far, although we still have some earnings to get through! Here are a few interesting monthly charts DKNG- The super bowl is coming up, not quite a hammer last month, but this chart looks like it could go a little higher. I would love to see it close above the blue line I have drawn which has been previous support and resistance on the daily charts. CVX- we are seeing some consolidation on the monthly chart with the 10ema acting as pretty strong resistance. I think if we can get a close above the 10 we could see a little bullish pop in CVX. CBRL- this chart looks bullish to me. January's hammer candle right on the 200 monthly moving average. Look for a nice bullish move if we can close above the 10ema TGT- you know what's cool about tiny candles, this signals consolidation. the longer and tighter the consolidation the bigger the move usually is generally speaking. Look for a close above the 50EMA to go bullish on Target. None of these are trade recommendations, they are insights into how I think about trading and setups I'm thinking about. Don't totally write off the charts thinking you have to sit and watch them minute by minute. Zoom out like me, these only update every month! If you want more information you should join the GKT discord to discuss more and connect with like minded people who trade the stock market! I hope this article was valuable to you. We want to help educate and show you trading doesn't have to be complicated, and you can do this. Happy Trading Good Kids! Disclaimer: this is NOT financial advice. I’m basically just some dude on the internet who’s been trading a while, and I use the stock market as my primary source of income. None of this is financial advice it’s purely educational!

Portfolio Margin is a power tool I use to make options trading more efficient in terms of buying power. If you are serious about using options to fund your freedom listen up because I believe Portfolio Margin should be your longer-term goal. Here at Good Kids Trading, I believe in demystifying the world of options trading, making it accessible, and empowering you to build a path to passive income. Today, I’m discussing Portfolio Margin I’ll be abbreviating it as PM going forward. All options trading begins with a margin account. If you aren’t clear what a margin account is it is essentially a line of credit from your broker. Don’t think of margin as a negative, it's the same as carrying a credit card balance. Margin is a key to unlocking trading potential because you can leverage your cash for assets. There are right and wrong ways to use margin of course. In a regular margin account, you get some buying power, but it's limited. Not many traders even realize there is a more powerful and favorable margin type available. Only more advanced traders learn about this, I want you to get a jump start to where you start thinking about Portfolio Margin. PM gives you risk-based margins similar to a market maker, without having to own a seat on the trading floor. Instead of calculating risk on fixed percentages like regular margin allows you to borrow up to 50% of marginable securities, PM uses theoretical pricing models to calculate the real time losses of a position. I realize my last few sentences might sound complicated so let me simplify it just a bit. PM gives you more power to take trades using far less buying power. In true GKT fashion I must remind you of part of our motto to trade small. Just because you can make a large amount of trades with minimal impact to your buying power it does not mean that you should! PM is definitely not suited for all traders, you are accepting the ability to take more risk, but if you use this correctly you will actually open up far more trades that you normally would not be able to take because you buying power is tied up using a set percentage that doesn’t account for probabilities and statistics.  You can take higher probability trades more often as long as you understand the worst case scenario. You might be thinking:  “sign me up right now”, all brokers have minimum capital requirements to apply for PM. Normally you need more than $150,000. Also, with great power comes great responsibility – you need to know what you're doing. Some brokers ask you to complete a test that gives you slight flashbacks to the standardized tests back in school. The broker wants to make sure you understand options because they are going to allow you to make trades that have higher risk and allow you to use more leverage. To be clear, just because PM allows you to make these trades, it doesn’t mean you have to or that you sould. In fact, that’s not why I’m urging you to make PM your longer-term goal. Simple options trades also benefit from PM. Let’s use a simple naked put as an example: Selling an Apple 165 put that expires in 42 days uses up $1,948 in a normal margin account. That same put uses $1,124 in a portfolio margin account. This is a savings of $824. Remember the amount of REAL risk is identical, if apple goes to zero you are risking 16,500-premium received. So we don’t want to over leverage by selling 2 puts instead of 1. We just want to benefit from the reduction in buying power. The less buying power you use the less interest you are paying the broker, you have that other capital to find another trade. Diversification is our friend at GKT. I can’t stress this enough, PM is a powerful tool in increasing your accounts efficiency, but the broker won't babysit you. You can set up risky and intricate trades, but if you're not sure of your game plan, you might find yourself over-leveraged. The broker won't be your safety, they may not stop you from making a trade or giving you a warning. They will margin call you if all your trades start going wrong. That is why it’s important to use PM responsibly and keep your trades small. For options traders eyeing that transition from a regular job to financial independence, Portfolio Margin is the goal. PM evaluates your actual positions and accounts for the Intricacies of your trades. If you own a stock and buy a long put, it recognizes that you have a safety net – the ability to sell your shares at the long put's strike price and updates your buying power accordingly. In the world of options trading, portfolio margin is a game-changer, a boost to elevate your options trading journey. If you're ready to explore this and other options strategies, check out Good Kids Trading for free information and real-time trades on our Discord. Let's navigate the markets together and unlock the potential of options trading. If you want more information you should join the GKT discord to discuss more and connect with like minded people who trade the stock market! I hope this article was valuable to you. We want to help educate and show you trading doesn't have to be complicated, and you can do this. Happy Trading Good Kids! Disclaimer: this is NOT financial advice. I’m basically just some dude on the internet who’s been trading a while, and I use the stock market as my primary source of income. None of this is financial advice it’s purely educational!