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Prepared by and Scott
Writing under the nom de plume of J.L. LORD

Monday | April 13, 2020

Hello Eizell.




What it all comes down to
Is that everything's gonna be fine, fine, fine
'Cause I've got one hand in my pocket
And the other one is giving a high five

—Alanis Morissette

From MORNING REPORT on March 20, 2020


I hope everyone enjoyed their long Good Friday/Easter weekend.

The markets were closed on Friday. Thursday was a crazy day where the markets once again ran higher with the SPX hitting a high of 2818.57 (+68.59) before falling off the highs.

The highs were reached at about 12:30pm Chicago time. The major event of the day was the anticipated outcome of talks between Saudi Arabia, Russia and the US. We went into the day expecting everyone to cut production by 10 million b/p/d. There were rumors circulating, however, that everyone was possibly going to agree to twice that – or 20 million b/p/d. This sent oil up $2.50 and the SPX and other indexes with it higher.

By 12:30pm, though, it was apparent that things were not going as well as planned as oil started to fall from positive +$2.50 to negative -$1.50 on the day. This dragged on the stock market as well with the SPX falling and unable to hold on to the gains above 2800.

Stocks for the most part were modestly higher across the board as a tangible decline in real volatility became evident.


TODAY: April 13

The day ended Thursday with the SPX closing up 39.84 (1.45%), which is about the half market from the high to the lows. I expected to see all the technical guys making all sorts of conflicting predictions now. This should bring on a day of selling on the open.

Now that the market is not falling 5-7% every day, I can probably take down the Christopher Robin quote about being brave. It was 2 weeks ago that the SPX hit 2200 and people were rattled. Fear pervaded in the media and with students as I was buying more shares in AAL at $10 and getting long deltas – having people think I lost my mind.

Above, you can see for the last time my quote from March 20th. I stated that the market was all over the place but not going anywhere, and this was probably near a bottom. Thank God I got on call right this year. LOL

S&P 500 Price Limits

From 8:30 a.m. to 2:25 p.m. CST, there are successive price limits corresponding to 7%, 13%, and 20% declines below the previous trading day’s reference price.

From 2:25 p.m. until the 3:00 p.m. CST close of the cash equity market, only the 20% price limit will be applicable.

You’re braver than you believe, stronger than you seem and smarter than you think”.
—Christopher Robin, Winnie the Pooh

Average year with lots of inter42mittent volatility
(-13.65% so far)

POT Logo

In example 70, we had on a Risk Reversal that we hedged off twice. It had a profit range that can only be described as HUGE. When the market was at 2480 (SPX) a week ago, I felt 2800 was safe. When it was threatened on Wednesday and Thursday, we adjusted and got fancy. This showed a way to not only extend the range, but make $1,000 more than we would have. It was the Lesson of the Week.

The other thing is the start of the 5-YEAR MILLIONAIRE spread. You will get details of this tomorrow.



Up and Running for POT students (so far).

Really quickly...

To help in your quest for the best possible options trading outcomes, we would like to know what level of options trading knowledge and skills you currently have. Please click the button below to indicate what level of trader you are? Please skip if you already responded. Thank you for participating.

P.O.T. Schedule to come.


Trading is a tough job on a stomach void of coffee and humor.
You provide the coffee and we will take care of the rest.



For education purposes ONLY. Please read the disclaimer below. We do not care if you agree or disagree with it—that is the rule. ​​​Stratagem Trading (Stratagem: “,” “Stratagem”), and any of its possible affiliates, respective independent contractors, employees, officers, or agents are not acting as licensed financial advisers, registered broker-dealers,tax advisers, etc. (although some individuals may or may not hold a license). Furthermore, they do not provide financial advice, make recommendations, or conduct business by transacting trades. Stratagem Trading adamantly states that nothing in this communication constitutes a solicitation, promotion, endorsement, offer or recommendation to buy or sell any investment, mutual fund, debt instrument, commodity, derivative product or security as described herein.

Stratagem does NOT offer auto-trades. Case studies being provided are historical examples illustrating how a particular commodity, equity, index and/or option strategy could have been implemented. Stratagem Trading is not providing students with real time trading opportunities, nor giving advice. We strongly recommend that you consult with a licensed financial professional for all your financial matters.

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