Hello Option Traders,

This is the last Blog entry from me for the year of 2008. It was a great year with an incredible amount of activity. Wizetrade has learned several lessons through out the years, but I feel the clients we support on a regular basis have found the value this company produces. I can say that I have not worked with such a dedicated group of individuals at any other time in my life. These last five years have been wonderful and I am very thankful of the opportunity. I look forward to starting 2009 off with a 'bang.' 

Some items to remember as the New Year approaches:

• Wizefeed is here and there will not be a debacle like last year ;) (yay!)
• Earnings will hit us hard and heavy in January through February.
• Wizetrade Options 3 Day class is fast approaching. If you have not registered, we'd love to have you here in Dallas. If you have registered, you're going to learn more than many others.
• Be safe through the holiday celebrations, I want to hear from you next year.

Hello Option Traders,

Introduction

            Good morning traders and welcome to another day of antics from your favorite United States based market. There are a couple of items I’d like to share before we tackle today’s topic.

• Option Hunter update is now available.
  • Option Hunter now has a largely expanded search library.
  • I have been using it for the last month internally and I return some fantastic results and ‘something’ usually comes back on just about every scan in any market condition.
  • New scans like The Thompson Trade, Front Month Spreads, and more are now predefined strategies that come bundled with the software.
  • Try it out and you will be pleasantly surprised by the opportunities.
  • If you are a current Option Hunter client, make sure you’re taking advantage of the annual subscription and save $200 per year or become a member of the Founder’s Club and save even more.
• It’s cold in Texas…that’s all.

That Trade Plan Thing

            Monday, I discussed, rather intensively, the Trade Plan concept and even devised a sample one for you to modify and see what components need to be addressed when creating one. The Trade Plan is one of the most important aspects to trading. I will say this stuff over and over until every Wizetrade client is banging on my desk telling me “that’s enough.”

            Let’s take a hypothetical example, shall we?

            Example:

            A recently retired business owner has about $250,000 saved up so he/she can now invest full-time in the market. He/she creates an account with a broker (doesn’t matter which) and funds the account. There is now $250,000 available to trade into the market and this person is getting antsy. Common sense would dictate that if this person was a business owner and now is not, this trader would know how to manage his/her money.

            In reality, I have spent five (5) years with this company and when I started, I knew nothing of the market. I made every single rookie mistake possible. I’m good with money, but as soon as I started learning something I have never been a part of in my life, all common sense of money management flew out the window. Of all the clients I have spoken to at this company, only about 1% has a clue how to manage their account and treat it like a business. 

            Back to the example; the recent retiree has Wizetrade (insert market specialty) and is learning an investment market for the first time. A few instances will happen:

1. He/she will follow the instructions of the Wizetrade support coach that calls once per week. In addition, he/she will follow the path to Progress and learn the application and market specifics during the current 30 day trial.
2. He/she will listen to their ‘market specialist’ buddy and trade whatever they tell him/her blindly, make/lose money, and not know why or how to invest on their own. He/she will cancel Wizetrade after the 30 day trial and go on to something else.
3. The new trader will install the software for a little bit, use it, not understand what the charts tell him/her, find ‘free’ charts online, learn a little about the market, and invest based on some sort of fundamental data, and then cancel the Wizetrade subscription. These traders are usually ‘buy and hold’ investors.

The new trader may be successful in all three (3) situations. The real kicker during these turn of events is that the new trader will not sit down and develop money management guidelines until they experience massive losses or blow up an account completely. By this time, the damage is done and hard to recover.

            No one will care about your money more than you do!

Other Considerations

            If you are scared of creating a trade plan, I urge you to consider a few simple concepts, form them into questions, and answer them honestly to your monetary considerations.

• A Trade Plan is merely a set of rules.
• For every profit made, there is a risk tolerance for every trader; find it. Find the loss point that makes you cringe and do not risk any more beyond that point.
• Trade (and paper trade) within the monetary boundaries of your account. Do Not Stray! If new to trading, avoid margin in the stock market and trade purely cash.
• Invest in small increments at the beginning and work your way up as confidence builds.

Start with these concepts and questions developed should lead you down other avenues to identify. The only person you stand to hurt from not doing this is you.

Conclusion

            I cannot stress enough the importance of being able to hold on to a trade account value. If you ‘know’ you’re putting too much on the line, reduce it. Trust your gut instinct and educate yourself. Ask questions and participate with trainers. The more involved you are and the more you engross yourself with the market, the more you will learn and apply. There are no excuses; it either works or it does not. If it works, don’t fix it. If it does not work, fix it. Simplicity is wonderful.

Tim Truelove

National Trainer II, Wizetrade Options

Hello Option Traders,

Introduction

            Good morning traders and welcome to another day of antics from your favorite United States based market. There are a couple of items I’d like to share before we tackle today’s topic.

• Option Hunter update is now available.
  • Option Hunter now has a largely expanded search library.
  • I have been using it for the last month internally and I return some fantastic results and ‘something’ usually comes back on just about every scan in any market condition.
  • New scans like The Thompson Trade, Front Month Spreads, and more are now predefined strategies that come bundled with the software.
  • Try it out and you will be pleasantly surprised by the opportunities.
  • If you are a current Option Hunter client, make sure you’re taking advantage of the annual subscription and save $200 per year or become a member of the Founder’s Club and save even more.
• It’s cold in Texas…that’s all.

That Trade Plan Thing

            Monday, I discussed, rather intensively, the Trade Plan concept and even devised a sample one for you to modify and see what components need to be addressed when creating one. The Trade Plan is one of the most important aspects to trading. I will say this stuff over and over until every Wizetrade client is banging on my desk telling me “that’s enough.”

            Let’s take a hypothetical example, shall we?

            Example:

            A recently retired business owner has about $250,000 saved up so he/she can now invest full-time in the market. He/she creates an account with a broker (doesn’t matter which) and funds the account. There is now $250,000 available to trade into the market and this person is getting antsy. Common sense would dictate that if this person was a business owner and now is not, this trader would know how to manage his/her money.

            In reality, I have spent five (5) years with this company and when I started, I knew nothing of the market. I made every single rookie mistake possible. I’m good with money, but as soon as I started learning something I have never been a part of in my life, all common sense of money management flew out the window. Of all the clients I have spoken to at this company, only about 1% has a clue how to manage their account and treat it like a business. 

            Back to the example; the recent retiree has Wizetrade (insert market specialty) and is learning an investment market for the first time. A few instances will happen:

1. He/she will follow the instructions of the Wizetrade support coach that calls once per week. In addition, he/she will follow the path to Progress and learn the application and market specifics during the current 30 day trial.
2. He/she will listen to their ‘market specialist’ buddy and trade whatever they tell him/her blindly, make/lose money, and not know why or how to invest on their own. He/she will cancel Wizetrade after the 30 day trial and go on to something else.
3. The new trader will install the software for a little bit, use it, not understand what the charts tell him/her, find ‘free’ charts online, learn a little about the market, and invest based on some sort of fundamental data, and then cancel the Wizetrade subscription. These traders are usually ‘buy and hold’ investors.

The new trader may be successful in all three (3) situations. The real kicker during these turn of events is that the new trader will not sit down and develop money management guidelines until they experience massive losses or blow up an account completely. By this time, the damage is done and hard to recover.

            No one will care about your money more than you do!

Other Considerations

            If you are scared of creating a trade plan, I urge you to consider a few simple concepts, form them into questions, and answer them honestly to your monetary considerations.

• A Trade Plan is merely a set of rules.
• For every profit made, there is a risk tolerance for every trader; find it. Find the loss point that makes you cringe and do not risk any more beyond that point.
• Trade (and paper trade) within the monetary boundaries of your account. Do Not Stray! If new to trading, avoid margin in the stock market and trade purely cash.
• Invest in small increments at the beginning and work your way up as confidence builds.

Start with these concepts and questions developed should lead you down other avenues to identify. The only person you stand to hurt from not doing this is you.

Conclusion

            I cannot stress enough the importance of being able to hold on to a trade account value. If you ‘know’ you’re putting too much on the line, reduce it. Trust your gut instinct and educate yourself. Ask questions and participate with trainers. The more involved you are and the more you engross yourself with the market, the more you will learn and apply. There are no excuses; it either works or it does not. If it works, don’t fix it. If it does not work, fix it. Simplicity is wonderful.

Tim Truelove

National Trainer II, Wizetrade Options

Hello Option Traders,

Introduction

            Traders out there that have not had an opportunity to be grilled by me may not know how much of a money management advocate I am. Today’s topic is an attempt to ‘hammer home’ the importance of trade plans and show what they can do for your trading ability. My view is that no cares about your hard-earned money more so than you do. Protect it and know exactly how to allocate funds appropriately.

Trade Plan

            “Blah, blah, blah Tim; seriously, this is enough of your jibber-jabber about Trade Plans. All I’ve heard lately is ‘Trade Plan this’ and ‘Trade Plan that,’ well I’m sick of it.”

            That’s just too bad anonymous voice interrupting my blog.

            Let’s get one thing straight; we trade to make money. Pure and simple, this is the absolute easiest answer to relate to anyone. The reasons may be different, but it all comes back to money.

            Creating a trade plan is the single largest task most traders do not perform. If you have no idea what I’m talking about, refer back to the blog ‘5 Stages of a Wizetrader.’ Why do people abandon this task you ask? Well, for one, it requires work. Yes, that’s right; traders would rather spend hours trying to figure out why a market order filled 2 cents higher or lower than their entry, but will not spend 15 minutes developing a plan for the future.

            According to the RCS (Retirement Confidence Survey 2004), 30% of middle aged to close retiree workers in the United States has a total savings of less than $25,000. Hopefully you read that and did not just skim over it; 30% < $25,000 in Savings! Only 9% of workers in the same age bracket (age 45-64) have a total savings of $25,000-$49,000.

(Source: TIAA-CREFInstitute.org)

            Trading has become an outlet for people in this major age bracket (or older) to become financially independent. In order for that to occur, you have to know how to travel from ‘point a’ to ‘point b’ without losing an account.

Application

            There are many training resources on the Web Community and WizetradeTV that deal with steps to take to create the trade plan. I’m going to assume all my readers understand the basic concepts or know how to search for information so the basics will not be discussed during this article. The purpose of this Blog post is to show application of a hypothetical plan designed for a particular purpose; to make money (for the individual who created it; create you own to apply.)

Conclusion

            This trade plan is not all inclusive. As a matter of fact, due to my personal time constraints, I could not include everything I felt necessary for the plan to be 90% useful. There is still the matter of a contingency plan, emergency plan, identifying individual stocks and currencies that match the criteria, and much more. This is just a shell to help you get started.

            If any readers viewing this post feel this information is important, please send the link to others. You can find my Account Goals Calculator in this thread to help you get started. Thanks for reading; I hope this helps someone out there. Feel free to contact me if you run into questions: ttruelove@wizetrade.com.

Tim Truelove

National Trainer II, Wizetrade Options

Hello Option Traders,

Introduction

            Traders out there that have not had an opportunity to be grilled by me may not know how much of a money management advocate I am. Today’s topic is an attempt to ‘hammer home’ the importance of trade plans and show what they can do for your trading ability. My view is that no cares about your hard-earned money more so than you do. Protect it and know exactly how to allocate funds appropriately.

Trade Plan

            “Blah, blah, blah Tim; seriously, this is enough of your jibber-jabber about Trade Plans. All I’ve heard lately is ‘Trade Plan this’ and ‘Trade Plan that,’ well I’m sick of it.”

            That’s just too bad anonymous voice interrupting my blog.

            Let’s get one thing straight; we trade to make money. Pure and simple, this is the absolute easiest answer to relate to anyone. The reasons may be different, but it all comes back to money.

            Creating a trade plan is the single largest task most traders do not perform. If you have no idea what I’m talking about, refer back to the blog ‘5 Stages of a Wizetrader.’ Why do people abandon this task you ask? Well, for one, it requires work. Yes, that’s right; traders would rather spend hours trying to figure out why a market order filled 2 cents higher or lower than their entry, but will not spend 15 minutes developing a plan for the future.

            According to the RCS (Retirement Confidence Survey 2004), 30% of middle aged to close retiree workers in the United States has a total savings of less than $25,000. Hopefully you read that and did not just skim over it; 30% < $25,000 in Savings! Only 9% of workers in the same age bracket (age 45-64) have a total savings of $25,000-$49,000.

(Source: TIAA-CREFInstitute.org)

            Trading has become an outlet for people in this major age bracket (or older) to become financially independent. In order for that to occur, you have to know how to travel from ‘point a’ to ‘point b’ without losing an account.

Application

            There are many training resources on the Web Community and WizetradeTV that deal with steps to take to create the trade plan. I’m going to assume all my readers understand the basic concepts or know how to search for information so the basics will not be discussed during this article. The purpose of this Blog post is to show application of a hypothetical plan designed for a particular purpose; to make money (for the individual who created it; create you own to apply.)

Conclusion

            This trade plan is not all inclusive. As a matter of fact, due to my personal time constraints, I could not include everything I felt necessary for the plan to be 90% useful. There is still the matter of a contingency plan, emergency plan, identifying individual stocks and currencies that match the criteria, and much more. This is just a shell to help you get started.

            If any readers viewing this post feel this information is important, please send the link to others. You can find my Account Goals Calculator in this thread to help you get started. Thanks for reading; I hope this helps someone out there. Feel free to contact me if you run into questions: ttruelove@wizetrade.com.

Tim Truelove

National Trainer II, Wizetrade Options

Hello Option Traders,

Introduction

            Good morning traders; it seems today is another day to deal with a wacky market. The biggest issue on the plate of America is the Auto Industry bailout and how the House and the Senate will vote for this new legislation. The next part of that is restructuring of the companies at the top. Rick Wagner will more than likely be offered on the sacrificial plate and a CEO change will occur at GM. Makes me wonder why all the mandatory restrictions and reconstruction of personnel is required for the auto industry to acquire $15 billion and we just gave the Financial Industry close to a trillion without question. Makes me wonder…

You’ll Tide

            In the spirit of the holiday, I have prepared a statement written in such a way that maybe, just maybe, it might spark some humor in your day.

Merry-Mint

The stockings hung by the fire

Mom and Dad were sipping wine,

The kids both looked at each other

Knowing everything was fine.

Anticipation grew while they stared at the tree

All lit in blue and red,

“Dad, tell us a story,”

“Alright,” he said as he tucked them into bed.

“The story is about a new land

Ready to fight to be free,

Britain did not want to give us up,

All we needed was the fee.”

“The powers that be were sent far and wide

To drum up support for the pending fight,

Farmers were asked for their stock,

They never expected such a bite.”

“Money was hard to find,

The experimental new government was broke

Stock and food was removed from the farmers of the land

They felt the pressure to choke.”

“For their patriotic deeds,

The poor farmers were given a slip,

The slip read ‘IOU,’

What they wouldn’t give for a single PIP.”

“This bond meant nothing to them,

How were they going to survive?

Then along comes men with money,

Bought the bond so farmers can stay alive.”

“The men with money had a plan

To create a market of misery and bonds,

The IOUs meant little to those that were given,

But then time came to respond.”

“The Americans won the War,

The bonds will be repaid,

Sorrow filled the hearts of farmers

Who now felt betrayed.”

“You see, the farmers needed their stock now,

To provide for the families they had,

An IOU would not do,

For having to wait for repayment would be bad.”

“However, life was good to the men with money,

Speculation of a war won did them right,

For they rolled in the money,

The government paid back another night.”

“The rich became richer,

Since the farmers sold a ticket of gold,

A fraction of the value was paid,

They will continue to be poor and old.”

“The lesson to learn,

Is about markets in this land,

Speculation runs rampant,

All things seem built upon sand.”

“Nothing is the value it seems,

Since you kids are quite young,

You may not understand what this story has to say,

And it is late so hold your tongue.”

“Santa’s coming so don’t be of worry,

He’ll have presents, you’ll see,

The stockings will be full of worthless stock certificates

My broker gave me for almost free.”

“Now close your eyes and dream of fun,

Time with your trucks, cars, and dolls,

For Christmas morning is a few hours away,

If we see you leave this room too early, you’ll be hit with snowballs.”

“Sweet dreams, kiddos; here’s a 100 shares of GM to last you through the night. Use ‘em to keep the fire going since we can’t pay the electric. See you tomorrow!”

Conclusion

            Thanks for reading everyone.

Tim Truelove

National Trainer II, Wizetrade Options.

Hello Option Traders,

Introduction

            Good morning traders; it seems today is another day to deal with a wacky market. The biggest issue on the plate of America is the Auto Industry bailout and how the House and the Senate will vote for this new legislation. The next part of that is restructuring of the companies at the top. Rick Wagner will more than likely be offered on the sacrificial plate and a CEO change will occur at GM. Makes me wonder why all the mandatory restrictions and reconstruction of personnel is required for the auto industry to acquire $15 billion and we just gave the Financial Industry close to a trillion without question. Makes me wonder…

You’ll Tide

            In the spirit of the holiday, I have prepared a statement written in such a way that maybe, just maybe, it might spark some humor in your day.

Merry-Mint

The stockings hung by the fire

Mom and Dad were sipping wine,

The kids both looked at each other

Knowing everything was fine.

Anticipation grew while they stared at the tree

All lit in blue and red,

“Dad, tell us a story,”

“Alright,” he said as he tucked them into bed.

“The story is about a new land

Ready to fight to be free,

Britain did not want to give us up,

All we needed was the fee.”

“The powers that be were sent far and wide

To drum up support for the pending fight,

Farmers were asked for their stock,

They never expected such a bite.”

“Money was hard to find,

The experimental new government was broke

Stock and food was removed from the farmers of the land

They felt the pressure to choke.”

“For their patriotic deeds,

The poor farmers were given a slip,

The slip read ‘IOU,’

What they wouldn’t give for a single PIP.”

“This bond meant nothing to them,

How were they going to survive?

Then along comes men with money,

Bought the bond so farmers can stay alive.”

“The men with money had a plan

To create a market of misery and bonds,

The IOUs meant little to those that were given,

But then time came to respond.”

“The Americans won the War,

The bonds will be repaid,

Sorrow filled the hearts of farmers

Who now felt betrayed.”

“You see, the farmers needed their stock now,

To provide for the families they had,

An IOU would not do,

For having to wait for repayment would be bad.”

“However, life was good to the men with money,

Speculation of a war won did them right,

For they rolled in the money,

The government paid back another night.”

“The rich became richer,

Since the farmers sold a ticket of gold,

A fraction of the value was paid,

They will continue to be poor and old.”

“The lesson to learn,

Is about markets in this land,

Speculation runs rampant,

All things seem built upon sand.”

“Nothing is the value it seems,

Since you kids are quite young,

You may not understand what this story has to say,

And it is late so hold your tongue.”

“Santa’s coming so don’t be of worry,

He’ll have presents, you’ll see,

The stockings will be full of worthless stock certificates

My broker gave me for almost free.”

“Now close your eyes and dream of fun,

Time with your trucks, cars, and dolls,

For Christmas morning is a few hours away,

If we see you leave this room too early, you’ll be hit with snowballs.”

“Sweet dreams, kiddos; here’s a 100 shares of GM to last you through the night. Use ‘em to keep the fire going since we can’t pay the electric. See you tomorrow!”

Conclusion

            Thanks for reading everyone.

Tim Truelove

National Trainer II, Wizetrade Options.

Hello Option Traders,

Introduction

            Date check; December 8^th, 2008. A little over a year ago, there was some resolution we told ourselves we would meet sometime this year. These New Year Resolutions are often brushed aside by our everyday work, hobbies, and duties. The remembrance of exuberant ideas flowing through our minds during times of merriment and egg nog ring bells from time to time. The resolution set 6 months earlier or more approaches the front of our minds and then disappears once the mist dissipates.

            This morning, I will be sharing some personal goals set over 2 years ago and I will discuss planning the year ahead and what it means to our trading.

Personal Goals

            The story I’m about to tell all those who are interested in reading is very personal. I feel it is an important aspect of being an educator to express personal interests to all students as well as aspirations for the future. Personal goals should be particularly important to every trader and goals can be applied to all aspects of life.  

My Goal

            The hot Texas sun beat down as if attempting to boil water in a pot that wasn’t there. Strolling down a cracked and broken sidewalk, I glanced from left to right convinced I could see the steam rising off other trekkers venturing out during the summer of 2006.

            The memory haunts me as much now as it did during that summer. I took my wife Christina shopping that day. Retailer after retailer we strolled carrying few bags but mostly gendering through shop windows at items we could not afford. One window, in particular, caught my attention. There were no items of interest, artifacts I could not afford, nor pleasing clothing items that would create the ‘vision of loveliness’ when draped around my wife’s body. No, this was something more to me. I observed a self reflection in an almost crystal clear observation of how the world views me. I stopped; dead in my tracks. Entranced, I must have stared at the reflection for several minutes. Christina looked a little perplexed as she tried to put together the pieces she could to understand what has caught my eye.

            The scale that morning would have cried out in agony as it struggled to display the numeric value I was gloomily awaiting. My head sank a little as the disappointment of gaining yet another few pounds entered the front of my mind and quickly sank back when I said to myself, “Oh, well…” The number seemed typical now, but very disheartening. Two hundred and sixty-eight pounds (268lbs) is a hefty number when a man only stands about six feet from the ground. I searched through the closet for the largest t-shirt (XXL) I had as well as a comfortable pair of jeans (40” waist) to attempt to enjoy the Saturday with my wife. I wasn’t going to let this disappointment bring down my weekend. I had a hard week prior and I deserved to relax and enjoy myself. At least, that’s the conversation I had internally with my brain.

            The number, for some reason, stuck with me during the majority of the day. Even when I sat down to eat at Panda Express (Chinese fast food), I couldn’t shake the number 268 from my mind. Like always when I eat at ‘Panda,’ the plate was finished in no-time. After all that food, I still felt hungry; at least that’s what I thought. Reluctantly, I asked Christina if she was ready to shop and not go back for seconds. ‘Oh, but I want another eggroll…’ The eggroll now took the place of the particular 268 number as the Panda Express door closed behind me on exit. 268 did not enter my mind again that day until I stood there, staring at my reflection.

            I didn’t do anything about the number 268 until the Tuesday after shopping that weekend. I didn’t inform Christina about my apprehensions of my weight nor the weight gain I noticed on her since the time we met either. The ‘date weight’ definitely sunk in and we were starting our ‘married weight’ accumulation until I made a very important decision. Starting today, June 13^th 2006, things are going to change. It was time for something to be done. This thought scared me initially. I made the same statement sipping champagne on the eve of the 2006 New Year as well as the 2005 New Year. I was afraid of failing myself again; similar to the times before.

            I now had this goal and I knew that it was going to take time to achieve it. Not only that, but I needed help. If this weight loss goal was going to work, I had to be mentally prepared for everything involved; including getting my wife to do it with me. I had no idea where to start so I made the decision many people in my case would make; I consulted the internet search behemoth, Google. I searched through pages and pages of solicitations, get skinny quick schemes, suggestions and help topics, and government food pyramid websites. I conducted my research on the topic and made sure I understood what I needed to do in order to meet my long term goal now set for myself. I remember being very excited for what lied in the future and I called Christina and informed her of the plan.

            I arrived home from work that afternoon and started phase 1 of my plan.

            Phase 1: Remove all food from the house that was high in fat.

            I remember going through my pantry and pulling out anything that could be considered fattening. Bags of chips were thrown into a box along with candy and dips. Once done sifting through the pantry, I now had a full box of food and a bare closet once filled with food. I invited a friend over and told him to take the box of food if he wanted it as well as anything in the freezer that was fattening. He took sacks full of frozen pizza, frozen desserts, frozen burritos and French fries. Once he left, the freezer that held so much delicious, quick food was now bare. Surprisingly, the refrigerator housed very few items that one would consider ‘bad’ for you. The items I did find were thrown away. I was now starting on a blank canvas ready for new paint.

            Phase 2: Keep fat intake less than 50 grams per day.

            This meant I needed to go to the store and consciously buy healthy food. I started easy by going the sandwich route. I began with 7-grain bread and sliced ham and turkey. I started buying more vegetables such as lettuce, cucumber, and peppers. I later made it a habit to put some vegetable on every meal I made. Apples became a daily part of my diet. I started eating one per day and moved on later to two per day. I made it a point to not drink sodas until I started losing weight. I replaced sodas with water. I ended up drinking more than 1 gallon of water per day. The process of making bad habits into good ones is hard to do. The only thing that kept me going, at first, was the education. I didn’t like the idea I was calorie counting though. The best way I knew to create a positive habit with eating healthy food was to remember a new number, 50. 50 grams of fat was my daily goal. If I stayed under that number, I would lose weight. The calories were not going to be an issue right now.

            Phase 1 and 2 were the hardest decisions I ever had to make. They ranked up there with breaking up (or getting heart-broken) from a first love. The decision of throwing out all my food was the start of my new life. I knew the hardest part was just starting. I was committed to not eating yummy DiGiorno pizzas, Patio brand taquitos, or Blue Bell ice cream for a long time. Eating out at Taco Bell became a thing of the past. I made it through by my wife and my personal date night every Friday night. We decided to eat ‘out’ once per month and the place we went had to count. The excitement of being able to eat at a nice restaurant was something we both looked forward to and made the weeks in-between roll along. We eventually got to the point where we could go out for dinner once per week, but that didn’t come until about a year into the new lifestyle change.

            More phases came along as did daily goals. My fat intake goal went from 50 to 30. Many daily calories were replaced with even more fruit. I started allowing myself tea and diet soft drinks. By Christmas of 2006, my weight dropped from 268 to 240. I was down 28 lbs in about 6 months. Of course, my weight fluctuated by about 5 lbs between weigh-ins.

            Two hundred and forty pounds was a good start, but I could still remember the days I would weigh 180 lbs soaking wet. The last time I could recall weighing 180 was graduation day at Lake Dallas High School in 1998. I still had a long way to go.

            The months were long and I did slip up from time to time. There were certain opportunities that presented themselves where my mental control broke and I would indulge. Since my diet was considerable healthier than previous, the weight ended up stable and would not drop. I knew there was another part of the puzzle I was missing. Cutting the fat intake put me on the right track, but more education was needed. I started reading and researching again. I learned for a man between the ages of 25-35, he needed to keep the caloric intake between 1800 and 2000 per day. I also learned about nutrition and what could help my body lose weight through the foods I ate. I started buying breads and some cereal bars high in fiber. The fiber goal per day needed to be at least 15 grams. I also found protein goals, calcium goals, sodium goals, sugar goals, and many more. I learned the difference between simple and complex carbohydrates and what they meant to my body. Metabolic rate became a topic of discussion with my doctor as well as reviewing my food plans. The process was building as the education gained. I learned what needed to be accomplished and built upon the original plan over time. I began to eat a lot of grilled fish, baked potatoes with fat free sour cream and low fat margarine, frozen yogurt, high fiber sandwiches, and many other combinations that made the low fat process easier.

            There are far too many things to list in this article about my weight loss than I can possibly fit, but unfortunately, this is article is not meant to be about weight loss tips. This is more of a description of the goals personally set and the steps taken to achieve them. What I can say is what I ended up accomplishing and learning changed my life forever. I now don’t miss those fattening foods that were such a big part of my life. I learned to spend a little extra money for the healthy foods in the supermarket and not buy what’s cheap or necessarily on sale. I learned that losing weight is a battle between the brain and the stomach. Weight loss is a simple mathematical calculation that results in a caloric deficit; that’s all!

            Two and a half years have gone by and it seems that just yesterday I was scared of throwing out all the food in my fridge. The scales pleasantly recorded my weight Sunday morning at two-hundred and eighteen pounds (218 lbs). My long-term goal is currently 210 pounds. Looking back, I never thought I could get close to achieving that goal. When I started at 268, 210 lbs was a long ways away. Reaching that goal meant losing a total of at least 58 pounds. ‘That’s half a cheerleader!’ I thought to myself. In order to accomplish this goal, I knew that I would have to break the total into daily, weekly, and monthly goals. It is much easier to hit small goals daily than to keep a large goal hounding you during the process.

            Personal goals of any kind are no different.

What’s Your Goal?

            I am a very technical and logical person. This concept really shines during my trading as well. Structure, cause and effect, as well as concepts of ‘time and place for everything’ are shown all over my trade plan. I understand that there is a reason of everything and if I can attempt to learn why an occurrence happened, I will be able to learn from it in case history was to present the same issue again later.

            So, I ask you, what’s your goal? Since this is a trading blog, let’s start with personal trading goals. Look at your trade plan and see if you have an ‘end game’ as well as ‘interim goals’ in-between.

Long Term (End Game) Goal: State a monetary level of your trade account you would like to see. Now, place a number next to it. The number represents the amount of years it will take to reach that goal.

Example: $100,000 End Game within 5 years. (This may not be the actual ‘end,’ but if we do not have a destination, it makes achieving goals extremely difficult.) The number should be realistic with the time frame allotted.

Interim Goals: Now, break down the ‘End Game’ into interim goals based on months, weeks, and/or days. Break down the number into manageable smaller term goals so they are easier to achieve.

Example: $8,333 per month. Breaking down the huge $100,000 End Game into monthly pieces, I put the goal into perspective.

Conclusion

            The process continues until you reach a point where the goals are attainable for your trade style and money management guidelines. Feel free to use the Account Goals Calculator I created to help out with your financial goals. There are many other aspects to trade plans that are not discussed here, but if you have questions, I am just an email away.

Hello Option Traders,

Introduction

            Date check; December 8^th, 2008. A little over a year ago, there was some resolution we told ourselves we would meet sometime this year. These New Year Resolutions are often brushed aside by our everyday work, hobbies, and duties. The remembrance of exuberant ideas flowing through our minds during times of merriment and egg nog ring bells from time to time. The resolution set 6 months earlier or more approaches the front of our minds and then disappears once the mist dissipates.

            This morning, I will be sharing some personal goals set over 2 years ago and I will discuss planning the year ahead and what it means to our trading.

Personal Goals

            The story I’m about to tell all those who are interested in reading is very personal. I feel it is an important aspect of being an educator to express personal interests to all students as well as aspirations for the future. Personal goals should be particularly important to every trader and goals can be applied to all aspects of life.  

My Goal

            The hot Texas sun beat down as if attempting to boil water in a pot that wasn’t there. Strolling down a cracked and broken sidewalk, I glanced from left to right convinced I could see the steam rising off other trekkers venturing out during the summer of 2006.

            The memory haunts me as much now as it did during that summer. I took my wife Christina shopping that day. Retailer after retailer we strolled carrying few bags but mostly gendering through shop windows at items we could not afford. One window, in particular, caught my attention. There were no items of interest, artifacts I could not afford, nor pleasing clothing items that would create the ‘vision of loveliness’ when draped around my wife’s body. No, this was something more to me. I observed a self reflection in an almost crystal clear observation of how the world views me. I stopped; dead in my tracks. Entranced, I must have stared at the reflection for several minutes. Christina looked a little perplexed as she tried to put together the pieces she could to understand what has caught my eye.

            The scale that morning would have cried out in agony as it struggled to display the numeric value I was gloomily awaiting. My head sank a little as the disappointment of gaining yet another few pounds entered the front of my mind and quickly sank back when I said to myself, “Oh, well…” The number seemed typical now, but very disheartening. Two hundred and sixty-eight pounds (268lbs) is a hefty number when a man only stands about six feet from the ground. I searched through the closet for the largest t-shirt (XXL) I had as well as a comfortable pair of jeans (40” waist) to attempt to enjoy the Saturday with my wife. I wasn’t going to let this disappointment bring down my weekend. I had a hard week prior and I deserved to relax and enjoy myself. At least, that’s the conversation I had internally with my brain.

            The number, for some reason, stuck with me during the majority of the day. Even when I sat down to eat at Panda Express (Chinese fast food), I couldn’t shake the number 268 from my mind. Like always when I eat at ‘Panda,’ the plate was finished in no-time. After all that food, I still felt hungry; at least that’s what I thought. Reluctantly, I asked Christina if she was ready to shop and not go back for seconds. ‘Oh, but I want another eggroll…’ The eggroll now took the place of the particular 268 number as the Panda Express door closed behind me on exit. 268 did not enter my mind again that day until I stood there, staring at my reflection.

            I didn’t do anything about the number 268 until the Tuesday after shopping that weekend. I didn’t inform Christina about my apprehensions of my weight nor the weight gain I noticed on her since the time we met either. The ‘date weight’ definitely sunk in and we were starting our ‘married weight’ accumulation until I made a very important decision. Starting today, June 13^th 2006, things are going to change. It was time for something to be done. This thought scared me initially. I made the same statement sipping champagne on the eve of the 2006 New Year as well as the 2005 New Year. I was afraid of failing myself again; similar to the times before.

            I now had this goal and I knew that it was going to take time to achieve it. Not only that, but I needed help. If this weight loss goal was going to work, I had to be mentally prepared for everything involved; including getting my wife to do it with me. I had no idea where to start so I made the decision many people in my case would make; I consulted the internet search behemoth, Google. I searched through pages and pages of solicitations, get skinny quick schemes, suggestions and help topics, and government food pyramid websites. I conducted my research on the topic and made sure I understood what I needed to do in order to meet my long term goal now set for myself. I remember being very excited for what lied in the future and I called Christina and informed her of the plan.

            I arrived home from work that afternoon and started phase 1 of my plan.

            Phase 1: Remove all food from the house that was high in fat.

            I remember going through my pantry and pulling out anything that could be considered fattening. Bags of chips were thrown into a box along with candy and dips. Once done sifting through the pantry, I now had a full box of food and a bare closet once filled with food. I invited a friend over and told him to take the box of food if he wanted it as well as anything in the freezer that was fattening. He took sacks full of frozen pizza, frozen desserts, frozen burritos and French fries. Once he left, the freezer that held so much delicious, quick food was now bare. Surprisingly, the refrigerator housed very few items that one would consider ‘bad’ for you. The items I did find were thrown away. I was now starting on a blank canvas ready for new paint.

            Phase 2: Keep fat intake less than 50 grams per day.

            This meant I needed to go to the store and consciously buy healthy food. I started easy by going the sandwich route. I began with 7-grain bread and sliced ham and turkey. I started buying more vegetables such as lettuce, cucumber, and peppers. I later made it a habit to put some vegetable on every meal I made. Apples became a daily part of my diet. I started eating one per day and moved on later to two per day. I made it a point to not drink sodas until I started losing weight. I replaced sodas with water. I ended up drinking more than 1 gallon of water per day. The process of making bad habits into good ones is hard to do. The only thing that kept me going, at first, was the education. I didn’t like the idea I was calorie counting though. The best way I knew to create a positive habit with eating healthy food was to remember a new number, 50. 50 grams of fat was my daily goal. If I stayed under that number, I would lose weight. The calories were not going to be an issue right now.

            Phase 1 and 2 were the hardest decisions I ever had to make. They ranked up there with breaking up (or getting heart-broken) from a first love. The decision of throwing out all my food was the start of my new life. I knew the hardest part was just starting. I was committed to not eating yummy DiGiorno pizzas, Patio brand taquitos, or Blue Bell ice cream for a long time. Eating out at Taco Bell became a thing of the past. I made it through by my wife and my personal date night every Friday night. We decided to eat ‘out’ once per month and the place we went had to count. The excitement of being able to eat at a nice restaurant was something we both looked forward to and made the weeks in-between roll along. We eventually got to the point where we could go out for dinner once per week, but that didn’t come until about a year into the new lifestyle change.

            More phases came along as did daily goals. My fat intake goal went from 50 to 30. Many daily calories were replaced with even more fruit. I started allowing myself tea and diet soft drinks. By Christmas of 2006, my weight dropped from 268 to 240. I was down 28 lbs in about 6 months. Of course, my weight fluctuated by about 5 lbs between weigh-ins.

            Two hundred and forty pounds was a good start, but I could still remember the days I would weigh 180 lbs soaking wet. The last time I could recall weighing 180 was graduation day at Lake Dallas High School in 1998. I still had a long way to go.

            The months were long and I did slip up from time to time. There were certain opportunities that presented themselves where my mental control broke and I would indulge. Since my diet was considerable healthier than previous, the weight ended up stable and would not drop. I knew there was another part of the puzzle I was missing. Cutting the fat intake put me on the right track, but more education was needed. I started reading and researching again. I learned for a man between the ages of 25-35, he needed to keep the caloric intake between 1800 and 2000 per day. I also learned about nutrition and what could help my body lose weight through the foods I ate. I started buying breads and some cereal bars high in fiber. The fiber goal per day needed to be at least 15 grams. I also found protein goals, calcium goals, sodium goals, sugar goals, and many more. I learned the difference between simple and complex carbohydrates and what they meant to my body. Metabolic rate became a topic of discussion with my doctor as well as reviewing my food plans. The process was building as the education gained. I learned what needed to be accomplished and built upon the original plan over time. I began to eat a lot of grilled fish, baked potatoes with fat free sour cream and low fat margarine, frozen yogurt, high fiber sandwiches, and many other combinations that made the low fat process easier.

            There are far too many things to list in this article about my weight loss than I can possibly fit, but unfortunately, this is article is not meant to be about weight loss tips. This is more of a description of the goals personally set and the steps taken to achieve them. What I can say is what I ended up accomplishing and learning changed my life forever. I now don’t miss those fattening foods that were such a big part of my life. I learned to spend a little extra money for the healthy foods in the supermarket and not buy what’s cheap or necessarily on sale. I learned that losing weight is a battle between the brain and the stomach. Weight loss is a simple mathematical calculation that results in a caloric deficit; that’s all!

            Two and a half years have gone by and it seems that just yesterday I was scared of throwing out all the food in my fridge. The scales pleasantly recorded my weight Sunday morning at two-hundred and eighteen pounds (218 lbs). My long-term goal is currently 210 pounds. Looking back, I never thought I could get close to achieving that goal. When I started at 268, 210 lbs was a long ways away. Reaching that goal meant losing a total of at least 58 pounds. ‘That’s half a cheerleader!’ I thought to myself. In order to accomplish this goal, I knew that I would have to break the total into daily, weekly, and monthly goals. It is much easier to hit small goals daily than to keep a large goal hounding you during the process.

            Personal goals of any kind are no different.

What’s Your Goal?

            I am a very technical and logical person. This concept really shines during my trading as well. Structure, cause and effect, as well as concepts of ‘time and place for everything’ are shown all over my trade plan. I understand that there is a reason of everything and if I can attempt to learn why an occurrence happened, I will be able to learn from it in case history was to present the same issue again later.

            So, I ask you, what’s your goal? Since this is a trading blog, let’s start with personal trading goals. Look at your trade plan and see if you have an ‘end game’ as well as ‘interim goals’ in-between.

Long Term (End Game) Goal: State a monetary level of your trade account you would like to see. Now, place a number next to it. The number represents the amount of years it will take to reach that goal.

Example: $100,000 End Game within 5 years. (This may not be the actual ‘end,’ but if we do not have a destination, it makes achieving goals extremely difficult.) The number should be realistic with the time frame allotted.

Interim Goals: Now, break down the ‘End Game’ into interim goals based on months, weeks, and/or days. Break down the number into manageable smaller term goals so they are easier to achieve.

Example: $8,333 per month. Breaking down the huge $100,000 End Game into monthly pieces, I put the goal into perspective.

Conclusion

            The process continues until you reach a point where the goals are attainable for your trade style and money management guidelines. Feel free to use the Account Goals Calculator I created to help out with your financial goals. There are many other aspects to trade plans that are not discussed here, but if you have questions, I am just an email away.

Hello Option Traders,

I enjoy receiving questions from clients regarding aspects of training. Questions remind me of the learning process when I knew very little about the markets in general. I wish someone took the time to explain my questions thoroughly and completely as I hope to answer yours. I am a very technical person and I need to know all the 'what if' scenarios possible. I don't need need to know what to do to make a trade work, I also need to know what not to do and what is the maximum profit/loss ability. Throw inprobabilities and you have a trade sandwich; pass the mustard.

Several clients have accused me of making a simple strategy or concept into a complex and difficult explanation. I'll admit that I tend to get wordy and sometimes over-explain myself (browse through the blog posts and I'm sure you'll find a few0, but I like to cover as many angles as I can. I want to have a preemtive answer ready for when someone has the question. Some of you will find my answers satisfactory, others will be overwhelmed by all the information I throw out. Anyway, on to the question.

I received the following question via email from a Wizetrade Options client:

Question:

"Tim, welcome back and I hope you are feeling better.  I have a quick question maybe you can help me out with. I’m not asking for a buy sell hold recommendation but rather making sure I’m interpreting something correctly. I continue to hear about renting out real estate for stock positions that are held long and would like to know how to do this. I’m long in PLD in at 9.68 for 200 shares.  It is currently trading around $3.15. Since I’m holding on to this I’m thinking of selling some short calls (I believe this is the term). And I need to know how this would works. Lets say I traded option PLD LC December $15 and since I own 200 shares, I can cover 200 shares thus could purchase 2 lots. The current ask price for this option is $0.10. Since the premium is the same for the December $20 short call, is there any down side for trading this one? I guess my question is what happens when the option expires…Does it just disappear and I collect the premium. Do I collect the premium at the time I purchase the option and do I have to do anything with this at a later date? If for some reason, the stock rose to $16.00 and I was called out, how does this transaction work. I’m sure I’m missing many questions but I think this will serve as a good start.

Thanks in advance"

This is a fantastic question and I hope my answer(s) below will prove beneficial.

Answer: 

Renting out the stock is the same as doing a ‘Covered Call’ or ‘writing Calls against a Position.’ All these terms are synonymous. You are correct about investors looking at purchasing real estate equities right now. The markets are lower than they have been in years, the housing boom has popped and is starting to recover, and finally, the real estate market will be one of the sure-fire signs that the economy will return to track. However, since no one can foresee the future, it’s all a speculation game. Right now, large institutions are buying up stocks by the truckload because they are at such a huge deficit from their 52 week highs. However, they may end up holding these equities for a decade or more. That’s not very realistic, but definitely feasible. Most economic down cycles last between 5-10 years according to history. So, if you have the time and flexibility in your trading account, buying for a long term may not be so bad. Expect the stock to drift lower over this time, but keep your eyes on the ‘prize.’

            You sent the example of PLD for your Covered Call question. Here’s how your situation would work:

·         When you are ‘long’ an equity, you own the underlying stock. This means you are now able to become an option writer (short seller) without the penalty of being ‘obligated’ to deliver the stock; you already have it.

·         A Short Call, inherently, is the obligation to buy the underlying equity. This is opposite of a Long Call where you have the ‘right’ to purchase the stock. Both situations revolve around the Strike Price. The Strike is the price in which the deal is ‘struck.’

·         To help put this into context, if you were to purchase a Long Call on PLD, you would look for an option with long enough DTE, strong Delta, and eventually purchase the option at the Ask price. You would pay a fraction of the price and be able to ‘control’ 100 shares per 1 contract purchased. The trade is a debit trade and you cannot lose more than what you purchased the option for, correct? This is all basic Long Call information. You have the ‘right’ to buy that stock at the Strike Price if you choose to do so. As a matter of fact, you have the opportunity to ‘exercise’ the option at any time during the life of the option, but when the option expires, the ability to exercise the option is unavailable *unless* the option expires ‘in-the-money.’

o        For a Long Call, if the option expires in-the-money (meaning it has intrinsic value at expiration), you had the right to sell the option at any time during the DTE of the option contract. Since the option expired with ‘worth,’ the option would automatically exercise and 100 shares x ‘X Amount’ contracts would be Long in your trading account. Basically, if the option had value at expiration and you chose not to sell the call and let is expire, you would become an owner of the stock and no longer an option holder.

·         Covered Calls kind of work in reverse. Since you own the stock, you are selling the right for someone else to buy the stock from you. This process of ‘renting’ is when options are sold out-of-the-money against the stock and you believe the stock will not close *above* the sell strike by expiration. Most Covered Call traders will sell front month options (<30 DTE) since time decay works in favor for you. Selling out-of-the-money options is like selling ‘time value.’ Time value depreciates over time so, theoretically, you would look to have to exercise the short call (cover) at an Ask price of 0.00 which would be worthless. You would then keep the credit received from the short call when you sold it to the market and then still keep the stock.

I know it’s a lot to consider, so I hope this example helps J

            Example:

            XYZ stock is trade @ 49.95 bid & 50.00 ask.

            You purchase 100 shares (50.00 ask x 100 = $5,000)

            --Total debit from the trading account is $5,000 (plus commissions)

            --Current worth of the trade is $4,995 (bid) for a current loss of $5.00 (spread)

            You now want to ‘cover’ or ‘hedge’ this position.

            You look through the option chain and locate an option you would like to short to the market.

            55 Call (30 DTE) @ 4.95 bid & 5.00 ask.

--In order to cover you long stock trade, you must *sell* the option at the bid price. This is a Short Call trade and a credit is received from the transaction. Since a Short Call is an *obligation to buy,* you already own the stock. In the situation of exercise, you would just sell the stock at the strike price of the short call. I’ll get into this later.

--Short Call @ 4.95 bid (1 contract since all you purchased was 100 shares) for a total Credit of *$495.*

--Current worth of the trade is $500 (Ask) for a loss of $5 (spread).

            You now have a Covered Call in play. You own the stock and have obligated yourself to sell your shares if the stock closes above 55 in 30 days.

In the “Setup,’ we see where we entered the trade and mapped out what lies ahead in the future. If the stock closes above 55 (55 sell strike) at expiration, we must sell the stock at $55.

“15 Days Later” we see the stock fell in value a little bit and we currently have a loss of $50. However, since time decay is work *for* us for the sold option, we are now able to buy the option back at a lower value. We sold the option for 4.95 and have the ability to buy it back at the current value of $3.00. This would result in a 1.95 ($195/contract) profit if realized. You have the ability to close this position now and realize that profit if you wanted to. This situation can only end in two ways; stock closes above the sell strike or the stock closes below the sell strike. Here are both examples:

.

This example at expiration is the best case scenario. Stock went up, but did not close above the sell strike. This means the option expired without any intrinsic value or ‘worth.’ We were able to ‘buy’ the option back at 0.00 and since that’s not possible, the option expires ‘worthless.’ We made money on the short call and on the equity. Net return in this example would be: $450 (equity) + $495 (short call) = $945.00 in 30 Days.

The cost basis of this trade is: Long Equity ($5,000) – Credit Received ($495) = $4505.

Return Percentage would be: $945 / $4505 = 21% in 30 days. This is an extreme example and might happen once per year ;) A realistic example would be 6-12% per month.

Traders will use this idea and sell options every month out of the money to ‘rent’ the stock out. If the stock is bullish, the next strike would continue being sold as the stock approached the previous strike sold. If the stock is neutral, the same strike/different months can be sold.

This situation can get a little tricky so I hope I don’t lose you. We were obligated to sell that stock at 55 if the stock closes above 55 at expiration. That’s what the Short Call did for us. Since we were long the stock at $50 and sold at $55, the profit from the stock is $5.00/share or $500. However, we received a credit to lower the cost basis from the Short Call of 4.95/share or $495. The movement the stock made pretty much cancelled out the credit we received since we needed to buy that option back at a cheaper price. Instead, we had to exercise the option and in-turn, lose the stock. $500 – 495 = $5 total profit. Take any commissions from that and we have a net loss and no more stock. We start from scratch with a new trade.

In reality, this last situation would have worked out better if we bought back the short call. We might have paid $1-2/share out of our credit, but we would have made money on the short call and got to keep the stock with its profit.

-------------------------------------------------------------------------------------------------------------------------

Taking this information and applying it to PLD, it would look something like this:

• Long 200 shares at 3.43 ($686 Long Equity)
• Short Call (PAD LA) 5.00 Strike (15 DTE) .20 bid/.35 ask
  • Sell to Open at .20 (2 contracts) Credit received $40.
• Reduced cost basis to: $646.

Situation 1: Keep the stock and keep the $40 credit

• Stock must close below $5.00 in 15 DTE (on 12/19/08)
• Equity value will fluctuate and profit from the stock if above entry value (3.43)
• Option expires worthless and credit realized ($40.00 Profit) minus entry commission/not exit. Exit commissions do not apply to worthless options.
• Cost basis: $646
• Profit Realized: $40
• Percent Return: $40 / 646 = 6%
• The value from the stock is not calculated since stock price is a variable and not realized.

Situation 2: Sell the stock and exercise option. (This should only be used if you no longer want to hold the equity.)

• Stock closes above $5.00 by at least .05-.10.
• Short option exercised.
• Long at 3.43, sold at $5.00 Total stock profit: $1.57/share (200 shares)      ($314)
• Credit Received .20 (2 contracts) $40 (subtract from stock) $314-40 = $244 (minus any commissions)
• Cost Basis: $646 (% return =profit/loss / cost basis)
• Percent Return *if called out* = 244/646 = 38% (rounded)

Both examples are excellent for 15 days in trade. Situation 1 is more realistic given the stock is bearish. If the stock continues to drop, the short calls each month will probably just cover loss in stock value and not really apply to profit. Eventually, if you sell enough calls, you will ‘pay for’ the cost of the stock. If you were to sell options against the stock and always receive $40 credit (assuming the stock never closed above your sell strike), you would have to overcome the max loss amount which is the cost of the stock position. It cost $686 to enter this trade. If you received $40 per month (assuming 30 days), it would take you 17 months to completely ‘pay’ for the stock. At that point anything the stock makes above 0 is profit. Preferably, the stock will be above your entry value and you will have nothing but profit for as long as you want it.

This is why people trade Covered Calls. The math adds up and if you buy a stock cheap enough and cover it long enough, it won’t matter what that stock does since the investment is paid for.

I hope these examples and explanations help you understand this situation a bit better. I know it’s lengthy, but I appreciate a good question.