9:52 Product Mix 10:30 Product Diversification 14:54 Correlation 23:06 Duration 26:50 Volatility (Expected Move) 31:19 Capital Efficiency 32:21 Comparison of All Asset Classes 36:41 Using Leverage to Add Opportunity 39:38 Improving Your Basis 41:46 Improving POP 43:40 Portfolio Capital Allocation 44:10 Total Capital Used as a Percentage of Account Value 46:37 Percentage Allocation on a Per Trade and Per Underlying Basis 50:13 Using BPR as Measure of Risk 52:05 Understanding Your Portfolio’s POP 55:19 Building a Directional Case 56:00 Assessing Opportunity Based on Price Extreme and Volatility 57:14 Measuring Risk Through Beta Weighting 59:36 Understanding Limited Greeks 1:01:26 Product Indifference Regardless of Account Type or Net Liquidity
Thanks Tom! This recording is really great. It did provide answers for many important questions. After listening to it it's hard to consider if there is an open question left. Sure, we don't know the future ... wish you and all listeners all the best. Regards, Christian
Thank you Tom, wonderful and perhaps very timely video. So much important active trader information, definately a keeper to watch later. Wishing you all happy and healthy 2025.
One question Tom, one slide says 10% cash, means 90% BPR was used; later on another slide says Total capital used as percentage of account value max is 50% when vix 40+, does that mean need to keep at least 50% in cash? Thanks, love your videos, watched a lot ...
The way I saw it, you start with net liq, from there you take the % based on the vix and then you split that into the buckets he mentioned. If you make the math and assume the 10% roi with the 1500 trades you’ll get the return you are looking for in the longterm. The remainder cash you get they usually let it sit as dry powder or short term treasuries (at least that’s what I’ve heard them say over an over ) If you trade with 30% trying to get 10% back every 21dte, and the year has 220 trading days. You end up with a target of around 30% annually from your total net liq. If from that you assume 65% pop, you’ll get around 18 to 20% roi yearly thanks to the large numbers rule he discussed. Please someone correct my math if I’m not getting but for me it was the way I interpreted it
The way I understand it: 1. Start with your total account value (net liq). Decide how much of it you’ll use for trading based on the VIX. For example, let’s say you allocate 30% of your account to trades. 2. Plan for a 10% return on that 30% over 21 days. With 220 trading days in a year, this would mean about 10 trade cycles (220/21 ≈ 10). 3. Math check: • If you start with $100,000 total account value (net liq) and trade 30% ($30,000), • A 10% return on $30,000 per cycle is $3,000. Over 10 cycles, that’s $30,000. • So, you’d make 30% of your total net liq annually. 4. Adjust for probabilities: If you aim for trades with a 65% probability of profit (POP), some trades will lose. Based on the law of large numbers, you might end up with an 18-20% annual return instead of the full 30%. 5. Keep the rest of your cash as “dry powder” or put it in short-term treasuries to earn a little extra while waiting for trading opportunities. Example: • Start with $100,000 in your account. • Allocate $30,000 (30%) for trades. • Each 21-day cycle, aim for a 10% return on $30,000 = $3,000. • Repeat this 10 times in a year. By the end of the year: • Ideal case (100% success): $30,000 profit (30% ROI). • Realistic case (65% success): Around $18,000-$20,000 profit (18-20% ROI).
Tom, this is awesome! love all the insights and making it to understand by common man. Looking forward to see more stuff like this. Love you, god bless you
Thank for the great content, Tom! One thing that puzzles me: when selling CSP, you guys use the premium received / BPR as a metric to mesure your return on capital, but to me that's not accurate because most of the times you'll need more capital than the BPR when you placed the trade! If the stock goes down or the IV goes up and all the capital you have is your BPR, you'll get a margin call. So, if most of the time you need more capital than the BPR to complete the CSP, how can you mesure your ROC only based on the BPR?
Thanks! I buy Long-synthetics on some stocks for leveraging a long-term investment. I would appreciate if you can talk about how to choose the DTE for these?
Tom can you explain further on why first 24 days make more money than the last 21 days? Is it because stocks are usually trending up and by the time it gets to 21 dte, it’s so far out of money theta decay is minimal?
As the option gets closer to expiry the option price will drop or decay faster, since there is less time for the underlying price to improve and the option to end up "in the money". Also called "theta decay". ~45 DaysToExpiry is a nice time frame to get this benefit. As you go beyond 21DTE then small movements in the underlying stock's price will cause greater swings in the option price and you will have less time to recover if you get a move against you. Look up Gamma Risk. If you work within this window, you get the benefit of good Theta decay, with less Gamma risk to hurt you.
I would say, it is because of gamma risk. Lets say you are 7DTE and everything went smooth so far. Sudden move before expiration moves gamma (thus delta) very fast and you can loose much more money comparing if you are 35DTE in the same situation. The slide was about potential P&L and not about total time decay dollar potential. So when you average all the gains and losses while you hold untill expiration, most of the money are made before 21DTE because potential losses are growing with time getting shorter. Remaining theta often can not cover increasing gamma risk.
I like that you guys are continuing to work with and develop NFTs. I've been developing in DeFi since 2012 and I'm in the end stages of developing a defi derivatives platform. NFTs have gotten a lot of hate due to all of the celebrities scamming their fans, but the future of NFTs are bright. Not to deploy another monkey picture but to create a decentralized market for software licensing and account credentials.
NFTs will be the “One of a Kind“ “Unique” guarantee, of all things of value and of No value . In the future . It could certify our gold or certified that childhood pictures of your kids are real in the future. There will be a whole lot of fakeness ,in the world ,5,10,20 years from now. I got into crypto in 2015 and I’ve seen its evolution and at 56 years old. This is the most explosive thing I’ve ever seen in my life between AI and crypto smart contracts NFTs, etc. payment rails stores of value self custody. It’s a whole new world of controlling our own wealth . Sad thing is most of my generation has no clue that this even going on I believe that’s gonna be my calling in the future to be a voice for the Gen X.
@@forex_shark6042 I was thinking the same thing. They looked into the future in the 2000s and saw the need for reliability and freedom in electronic retail trading even before smart phones. Tom seems to see a blockchain future, or at least good trading vehicles eventually! They've had their finger on the pulse.
Awesome. Can some suggest a curriculum for starters? I will get started from the playlists on this channel. If anyone can advise any and all aspects, from account setup to active trading I would really appreciate it. Specially a guide for beginners with low capital start. Please and thanks 🙏
With the futures though if not using options, wouldn't you need more cash to cover the position if it goes against you? Many new futures traders forget to have that additional cushion to pay up on a negative position
It would be good to have tasty trade communicate with IRS and the Tax Courts to help define what "Trader Status" should be in the. There needs to be a better understanding of what trading and investment needs to be as a trader moves from "hobby" to "business".
If your actively managing your portfolio and your main goal is to make profits and gains overtime why would you care if it swings if over time you successfully gain profit. I see volatility reduction as a pure psychological protection. If I can learn from my mistakes and follow my trading rules and change them over time according to the mood of the market I thing volatility is my friend and may be translated to opportunity.
I really appreciate the thoughtful and interesting content shared on this channel; it genuinely motivates me to focus on personal growth. With prices rising at their highest in 40 years, I feel it's important to make the most of my savings and invest them wisely. Even though I've faced many challenges because of the unpredictable nature of the financial markets, I am determined to stay strong. It has been difficult to experience some losses, especially since my ability to invest is limited, but I know that many others understand this journey and the strength that comes from getting through tough times.
Since my retirement in 2012, I have confidently envisioned a comfortable and stable lifestyle. Back then, my monthly expenses-including rent, food, utilities, and insurance-totaled $111,600. Today, maintaining that same standard of living costs approximately $150,000 each month, clearly highlighting the significant impact of inflation. Given a 6% annual inflation rate over 11 years, my expenses should now be around $330,027. This reality reinforces the crucial importance of planning for retirement by accounting for potential annual expense increases to sustain our quality of life. While navigating these changes can be challenging, thorough preparation ensures a smooth transition and the ability to thrive.
To achieve success in the stock market, prioritize growth, blue-chip, or large-cap stocks. The real challenge is accurately predicting which sectors will take the lead in the next market trend. Given your budget, seeking advice from a financial advisor is a smart and strategic move that can provide invaluable insights for your journey.
I concentrate on growth, blue-chip, or large-cap stocks, embracing the challenge of discerning which sectors will lead the market next. Engaging with a financial advisor, SophiekathrynJones, is an essential step forward, aligning my aspirations with my budget.
I’m really looking forward to re-entering the stock market soon, especially after taking a step back during the pandemic. I’d love to hear about your approach to finding guidance for this journey and how I might connect with your advisor, SophiekathrynJones. It feels like an exciting time ahead!
Well this is not good for me. I wanted to buy an option on TSLA when it jumped all the way to 480, because I was afraid it was going to crash and I owned it. I couldn't figure it out so I sold out of my position. Why hasn't someone made an ETF that would do this if it's a solid strategy?
If you want to hedge on a stock you own all you need to do is buy puts each contract is for 100 shares. Pros: Protection if the share price drops below the strike price of the put on a given timeframe (when buying an option you decide on an expiration date) Cons: Costs you premium which should be added to the average price paid for the shares therefore increasing your average purchase
if I have No idea what options and futures are !? what about average Joe ? who wanna keep simple !? Sorry but too complicated !( anyway thanks like it for trying
He runs a brokerage. So he wants you to keep trading…What happens if you stay too long at the casino ? You loose all your winnings and then some. Stop trading.
To anyone confused about the option greeks near the end, the definition of Theta was wrong (definition for Gamma was used in the slide instead). Theta is how much daily premium decay you are collecting (assuming you're an options writer/seller)
Impressive video, thank you for your videos mate.. . Crypto education is what the world needs the most right now. I don’t think that buy and hold is a valid investment strategy anymore. Not too diluted and to a degree, follows Marnell’s trading ideas and signal tips for your portfolio growth and aggressiveness. She is a woman who has not only taught me what the cryptocurrency trading world looks like but a secret to uplift my finance. Buying crypto and waiting for the price to shoot up is not the best way to invest in the market but buying and trading is. Eugenia Eiland’s trade signal does the heavy lifting, generating competitive returns for crypto traders and investors in the form of money and peace of mind. Time in the market vs. timing the market. If you keep that mentality as an investor, you will stay calm during the storm! Within some months I was making a lot more money and have continued on that same path with Eugenia Eiland.
9:52 Product Mix
10:30 Product Diversification
14:54 Correlation
23:06 Duration
26:50 Volatility (Expected Move)
31:19 Capital Efficiency
32:21 Comparison of All Asset Classes
36:41 Using Leverage to Add Opportunity
39:38 Improving Your Basis
41:46 Improving POP
43:40 Portfolio Capital Allocation
44:10 Total Capital Used as a Percentage of Account Value
46:37 Percentage Allocation on a Per Trade and Per Underlying Basis
50:13 Using BPR as Measure of Risk
52:05 Understanding Your Portfolio’s POP
55:19 Building a Directional Case
56:00 Assessing Opportunity Based on Price Extreme and Volatility
57:14 Measuring Risk Through Beta Weighting
59:36 Understanding Limited Greeks
1:01:26 Product Indifference Regardless of Account Type or Net Liquidity
You are a superstar, thank you.
Legend 🙌
Thank you Tom for everything you are doing for retail traders….I can’t have enough of tastylive content
guy doesnt get enough deserved pub. blows cnbc clowns away,
Yup! Once you go Tasty the rest is just noise.
Has more money then them
Too lol
tom is the man
I hope Tom and Tasty someday get the recognition they deserve.
What a guy...amazing accomplishments!
Thank you, Tom, for sharing this. You are a tremendously generous person. Your TED talk changed my life.
Can’t wait for the next session! Thank you Tom.
Merry Christmas y'all!
Thanks Tom! This recording is really great. It did provide answers for many important questions. After listening to it it's hard to consider if there is an open question left. Sure, we don't know the future ... wish you and all listeners all the best. Regards, Christian
Tom at his best. Thanks Tasty!
Tom & his think tank= brilliant. Thank you.
The experience level that seeps out in every sentence is SO impressive! Legit. 💪🏼
Thank you so much for sharing your knowledge and wisdom! God bless you and your family!
Great stuff! Thanks Tom!!
Excellent presentation Tom! thank you so much
Thank you Tom, wonderful and perhaps very timely video. So much important active trader information, definately a keeper to watch later. Wishing you all happy and healthy 2025.
Good stuff! The more I hear the same info, the more it sinks in!
Pls providee the tickerlist in the description.
What is Net Lick (11:23)?
Net Liq is how much your portfolio is worth in cash if you closed out your positions and sold your stock at current market value.
Net liquidity: total value of your portfolio if you were to close it out right now.
One question Tom, one slide says 10% cash, means 90% BPR was used; later on another slide says Total capital used as percentage of account value max is 50% when vix 40+, does that mean need to keep at least 50% in cash? Thanks, love your videos, watched a lot ...
The way I saw it, you start with net liq, from there you take the % based on the vix and then you split that into the buckets he mentioned.
If you make the math and assume the 10% roi with the 1500 trades you’ll get the return you are looking for in the longterm.
The remainder cash you get they usually let it sit as dry powder or short term treasuries (at least that’s what I’ve heard them say over an over )
If you trade with 30% trying to get 10% back every 21dte, and the year has 220 trading days.
You end up with a target of around 30% annually from your total net liq.
If from that you assume 65% pop, you’ll get around 18 to 20% roi yearly thanks to the large numbers rule he discussed.
Please someone correct my math if I’m not getting but for me it was the way I interpreted it
So let say you use 30% of max net liq and you divide it into buckets it's going to be 70% of cash?
The way I understand it:
1. Start with your total account value (net liq). Decide how much of it you’ll use for trading based on the VIX. For example, let’s say you allocate 30% of your account to trades.
2. Plan for a 10% return on that 30% over 21 days. With 220 trading days in a year, this would mean about 10 trade cycles (220/21 ≈ 10).
3. Math check:
• If you start with $100,000 total account value (net liq) and trade 30% ($30,000),
• A 10% return on $30,000 per cycle is $3,000. Over 10 cycles, that’s $30,000.
• So, you’d make 30% of your total net liq annually.
4. Adjust for probabilities: If you aim for trades with a 65% probability of profit (POP), some trades will lose. Based on the law of large numbers, you might end up with an 18-20% annual return instead of the full 30%.
5. Keep the rest of your cash as “dry powder” or put it in short-term treasuries to earn a little extra while waiting for trading opportunities.
Example:
• Start with $100,000 in your account.
• Allocate $30,000 (30%) for trades.
• Each 21-day cycle, aim for a 10% return on $30,000 = $3,000.
• Repeat this 10 times in a year.
By the end of the year:
• Ideal case (100% success): $30,000 profit (30% ROI).
• Realistic case (65% success): Around $18,000-$20,000 profit (18-20% ROI).
Thanks for the comment and detailed explanation wonder if tom confirms this somewhere and it looks like what you say makes sens
This is brilliant. Thank you
So much value in this video, thank you Tom!
Great learning curve Webinar. Thank you very much.
Great to see Tom, you're the man! Love to see it!
Thanks Tom very much needed, love the way you explain things. Looking forward to part 2.
Looking good. Happy about doing this education
Awesome - thank you so much Tom
Tom, this is awesome! love all the insights and making it to understand by common man. Looking forward to see more stuff like this. Love you, god bless you
Great video! Is the buying power reduction metric (BPR) the same as your initial and maintenance margin metrics on other platforms?
Is there a summary of what it is and I can implement it?
It IS a summary. Lots of information crammed into an hour.
Tom is the best ❤
Thank for the great content, Tom!
One thing that puzzles me: when selling CSP, you guys use the premium received / BPR as a metric to mesure your return on capital, but to me that's not accurate because most of the times you'll need more capital than the BPR when you placed the trade! If the stock goes down or the IV goes up and all the capital you have is your BPR, you'll get a margin call. So, if most of the time you need more capital than the BPR to complete the CSP, how can you mesure your ROC only based on the BPR?
Thanks! I buy Long-synthetics on some stocks for leveraging a long-term investment. I would appreciate if you can talk about how to choose the DTE for these?
Thank you.
Time-saver: Jump to 10m28sec mark, for beginning of content
Tom can you explain further on why first 24 days make more money than the last 21 days? Is it because stocks are usually trending up and by the time it gets to 21 dte, it’s so far out of money theta decay is minimal?
As the option gets closer to expiry the option price will drop or decay faster, since there is less time for the underlying price to improve and the option to end up "in the money". Also called "theta decay". ~45 DaysToExpiry is a nice time frame to get this benefit.
As you go beyond 21DTE then small movements in the underlying stock's price will cause greater swings in the option price and you will have less time to recover if you get a move against you. Look up Gamma Risk.
If you work within this window, you get the benefit of good Theta decay, with less Gamma risk to hurt you.
I would say, it is because of gamma risk. Lets say you are 7DTE and everything went smooth so far. Sudden move before expiration moves gamma (thus delta) very fast and you can loose much more money comparing if you are 35DTE in the same situation. The slide was about potential P&L and not about total time decay dollar potential. So when you average all the gains and losses while you hold untill expiration, most of the money are made before 21DTE because potential losses are growing with time getting shorter. Remaining theta often can not cover increasing gamma risk.
Tom you are a legend. If possible, I would love the intern for Tasty Trade. I e emailed you my resume.
Lemme know how that works out. I would be the janitor to get in the door
12.31.2024. Have TT acct. Still cant do an option. But i will. Still listening and learning
I like that you guys are continuing to work with and develop NFTs. I've been developing in DeFi since 2012 and I'm in the end stages of developing a defi derivatives platform. NFTs have gotten a lot of hate due to all of the celebrities scamming their fans, but the future of NFTs are bright. Not to deploy another monkey picture but to create a decentralized market for software licensing and account credentials.
NFTs will be the “One of a Kind“ “Unique” guarantee, of all things of value and of No value . In the future . It could certify our gold or certified that childhood pictures of your kids are real in the future. There will be a whole lot of fakeness ,in the world ,5,10,20 years from now.
I got into crypto in 2015 and I’ve seen its evolution and at 56 years old. This is the most explosive thing I’ve ever seen in my life between AI and crypto smart contracts NFTs, etc. payment rails stores of value self custody. It’s a whole new world of controlling our own wealth . Sad thing is most of my generation has no clue that this even going on I believe that’s gonna be my calling in the future to be a voice for the Gen X.
@@forex_shark6042 I was thinking the same thing. They looked into the future in the 2000s and saw the need for reliability and freedom in electronic retail trading even before smart phones. Tom seems to see a blockchain future, or at least good trading vehicles eventually! They've had their finger on the pulse.
Awesome.
Can some suggest a curriculum for starters?
I will get started from the playlists on this channel.
If anyone can advise any and all aspects, from account setup to active trading I would really appreciate it.
Specially a guide for beginners with low capital start.
Please and thanks 🙏
Watch the YUTES series
They printed a book called the unlucky investors guide to option trading
@ thanks a ton. I appreciate it.
With the futures though if not using options, wouldn't you need more cash to cover the position if it goes against you? Many new futures traders forget to have that additional cushion to pay up on a negative position
It would be good to have tasty trade communicate with IRS and the Tax Courts to help define what "Trader Status" should be in the. There needs to be a better understanding of what trading and investment needs to be as a trader moves from "hobby" to "business".
IRS is not going to give a stricter definition. That would cause more problems than it would solve.
How can 50% of the portfolio be options, while only using 50% bpr when the vix is over 50%? I’m new to this, tia!
Your portfolio is 50% of your cash/bpr. Your options allocation is 50% of that (tbh, I'd do way more than 50% but that's subjective)
One like button is not enough for this webinar!
Respect!
Is this a recycled video? It mentions live events across the country, but the website doesn’t show any.
If your actively managing your portfolio and your main goal is to make profits and gains overtime why would you care if it swings if over time you successfully gain profit.
I see volatility reduction as a pure psychological protection.
If I can learn from my mistakes and follow my trading rules and change them over time according to the mood of the market I thing volatility is my friend and may be translated to opportunity.
this was filmed for 2024; everything still equally true today?
I really appreciate the thoughtful and interesting content shared on this channel; it genuinely motivates me to focus on personal growth. With prices rising at their highest in 40 years, I feel it's important to make the most of my savings and invest them wisely. Even though I've faced many challenges because of the unpredictable nature of the financial markets, I am determined to stay strong. It has been difficult to experience some losses, especially since my ability to invest is limited, but I know that many others understand this journey and the strength that comes from getting through tough times.
Since my retirement in 2012, I have confidently envisioned a comfortable and stable lifestyle. Back then, my monthly expenses-including rent, food, utilities, and insurance-totaled $111,600. Today, maintaining that same standard of living costs approximately $150,000 each month, clearly highlighting the significant impact of inflation. Given a 6% annual inflation rate over 11 years, my expenses should now be around $330,027. This reality reinforces the crucial importance of planning for retirement by accounting for potential annual expense increases to sustain our quality of life. While navigating these changes can be challenging, thorough preparation ensures a smooth transition and the ability to thrive.
There’s been a whirlwind of conversation around investing lately, and I’m absolutely thrilled to jump in and discover where to begin!
To achieve success in the stock market, prioritize growth, blue-chip, or large-cap stocks. The real challenge is accurately predicting which sectors will take the lead in the next market trend. Given your budget, seeking advice from a financial advisor is a smart and strategic move that can provide invaluable insights for your journey.
I concentrate on growth, blue-chip, or large-cap stocks, embracing the challenge of discerning which sectors will lead the market next. Engaging with a financial advisor, SophiekathrynJones, is an essential step forward, aligning my aspirations with my budget.
I’m really looking forward to re-entering the stock market soon, especially after taking a step back during the pandemic. I’d love to hear about your approach to finding guidance for this journey and how I might connect with your advisor, SophiekathrynJones. It feels like an exciting time ahead!
Well this is not good for me. I wanted to buy an option on TSLA when it jumped all the way to 480, because I was afraid it was going to crash and I owned it. I couldn't figure it out so I sold out of my position. Why hasn't someone made an ETF that would do this if it's a solid strategy?
If you want to hedge on a stock you own all you need to do is buy puts each contract is for 100 shares.
Pros: Protection if the share price drops below the strike price of the put on a given timeframe (when buying an option you decide on an expiration date)
Cons: Costs you premium which should be added to the average price paid for the shares therefore increasing your average purchase
if I have No idea what options and futures are !? what about average Joe ? who wanna keep simple !? Sorry but too complicated !( anyway thanks like it for trying
💯
You rock, Tom! Thanks so much for all you have done! I know 75% of what I know about trading due to you and your team.
He runs a brokerage. So he wants you to keep trading…What happens if you stay too long at the casino ? You loose all your winnings and then some. Stop trading.
To anyone confused about the option greeks near the end, the definition of Theta was wrong (definition for Gamma was used in the slide instead). Theta is how much daily premium decay you are collecting (assuming you're an options writer/seller)
so what's your CAGR in last 20 years?
Great question.
Probably -100%
@@NQ1284 lol. Anyone with a cagr that high over 20 years would be worth 10s of billions of dollars.
@cyberft I wrote minus 100%, not +100%. He clearly doesn't trade, he's just a salesman
@ oh. lol.
Impressive video, thank you for your videos mate.. . Crypto education is what the world needs the most right now. I don’t think that buy and hold is a valid investment strategy anymore. Not too diluted and to a degree, follows Marnell’s trading ideas and signal tips for your portfolio growth and aggressiveness. She is a woman who has not only taught me what the cryptocurrency trading world looks like but a secret to uplift my finance. Buying crypto and waiting for the price to shoot up is not the best way to invest in the market but buying and trading is. Eugenia Eiland’s trade signal does the heavy lifting, generating competitive returns for crypto traders and investors in the form of money and peace of mind. Time in the market vs. timing the market. If you keep that mentality as an investor, you will stay calm during the storm! Within some months I was making a lot more money and have continued on that same path with Eugenia Eiland.