297 · Cody Yeh - Slow, Medium, and Fast Money Strategies

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screw those 75% within the day, right? The moment it started getting closer to to your your your stop price or your strike price, all of a sudden Delta is like, oh my God, like Cody, like it dropped really fast. And then when below is like, okay, Cody, now it's one to one now. Like what's going on? Right. So like I don't think probability could be looked that way, but there's no

formula you can calculate a black short is just a a very rigid formula that kind of tells you, but that's not the real probability. That's why our team are always looking at how do we dodge some of the event where okay leaving a little bit of money on the table. We look at, for example, the Liberation Day. I was telling my team, liberation day, okay, more upside with downside. Everyone's like downside. Exactly.

So if we have bullpoint spread, can we close some of it? Only leave 25%. You're like, yeah, it kind of makes sense. Because what's the chance that will go up? Is Donald Trump gonna say, I have mercy for you guys, but he's like gonna do something innovative that shock everyone anyway.

Right. So the chance of the upside we're even staying still, it's so low. So we actually should have some bigger call spread, more bearish position, not too much, more neutral and less bullish position. So that's the way we position. Right, we have a little bit of bias just based on, not just based on technical, not based on just delta, be like based on what Donald Trump is gonna do and how people is gonna think, react to it. Right. So that's kind of like how do you quantify it?

And I happen to also be a developing trader like some of you, working diligently every day on my trading. My trading journey has been rocky for a long time, but I have to say for the past year now. I have been intentionally learning, gaining experience from every trade so that I can accelerate my trading progress. What about you? How's your trading going overall? Are you happy with your progress? What do you think you're missing and how can you make your trading simpler if possible?

Those are the two exact questions I ask myself a lot now to help me focus and refine and improve my system and process. I just thought I'd share every so often with you a little bit from my trading journey and hey, feel free to share yours. We may end up reading what you're willing to share on the podcast just like they used to do back on the radio, remember? Well, for those of you who do remember. What do you think of that idea? Okay, hold that thought.

While I get us back to the main part of this episode with my co-host Ian Cox, who had the opportunity to chat with Cody Yan.

The practicality of it all is actually quite remarkable. Building his edge through teamwork, structure, clear rules, and consistency. His approach to the financial market is all about trading less. But earning more. Is that possible? How does he do it? Well, let's dive into the conversation now.

Ladies and gentlemen, we're so pleased to introduce Cody Yi from our respected neighbor to the north, Toronto, Canada.

Some of the stocks did reach almost reach that point. So I have some limiting order to buy. But in terms of option, it's very tricky. Um, because this drop um, you know, sends the height of uh all-time height of of January, we haven't really seen any rebound. And that's usually, you know, for the last two or three drop like

It's it's been kinda like this. Usually you kinda drop and a rebound and a drop more, but last few times it was just pure drop, right? So it's kind of scary, definitely. And at the same time, you know, my team and myself, this is you know. We've seen different scenarios, but every time is kind of different. So we just had a meeting yesterday for about an hour to say, hey, how do we, you know, always learn from mistake and moving forward, but we don't really uh see a bottom yet.

Right. I would say the bottom will be when when um when all the corporation come out and announce that a recession is really here. And I think that'll be another one to two months. So I don't have to crystal ball, but uh I'll hang tight and don't over trade because who knows? It can drop to fifty two hundred S P five hundred really. Right. I don't hope we'll go there, but you know, um it's very unpredictable. So definitely tone down your your account size and don't do crazy things at this time.

You know, there's a saying in Chinese that you're you're very uh agile, you're nymphs, but you know, you're not very developed on your brain, you know, sort of saying. So I thought it was that person. So a very easygoing, grew up in Taiwan. And, you know, at that time, you know, my family's, you know, my dad has a really good job, but he's not very good with finance. So I think growing up I have a um I was inject a lot of scarcity myself from my mom.

Um, because you know, um there's a few calls where there's margin calls. Uh call my mom and my dad need multiple six figure USD in 15 minutes. So I think my mom was very shocked by it. And I think You know, that really kinda planned the seats in a lot of what I do, try to have financial freedom, independence before I come to Canada, uh, at the age of eighteen. So yeah. Mm-hmm.

And then we all kind of know that's not the truth, right? You don't have any critical thinking. But really, when I came to Canada is when everything just kind of hit me in the face. I remember my first day. when I go uh when I went to no UFT, so University of Toronto, considered one of the best school in Canada. I went to engineering school. I remember first night I sat in my dorm, you know, I have a roommate.

Um, he's not arrived yet. I don't have I I never live on my own really. Um I don't have any pillow or bet she, so I literally just slept on the bed without any bet she. And I was thinking, but oh my God, this is for real. So if I get kicked out, I will be that kid, came from Taiwan and and spent all the parents' money and I'll crawl back there with tails between my legs. So I'm like, oh my God, I better not do that. Right. So that was like when reality really sets in for me. Right.

first coming to Canada and I couldn't read a math 12 questions. So I chose engineer. And I was like, okay, engineer, if I graduated, I will get a decent job, maybe pay me 60K, maybe 80K per year. But I know that's not going to get me rich, but I'll I'll be independent. So I might, I'm trying to start learning how do people really get ahead in life, especially when they start kind of from middle class or nothing.

Right. So that's when I'm like, okay, like Warren Buffett learned from stocks. And that's when I like open my uh broker account,$1,000,$2,000 a little, but if I put in boring stocks, the bank stocks, I'm like, this is kind of boring. This is kind of boring, but uh that's how I first learned, right? Learn how to read the financial statement, balance sheets, and you know, going through

corporate finance class, but didn't really learn much besides how to derive, how does a formula of a black short formula for option work. But now that we all have computer, but back then I was the engineer, we have to derive everything. But you know, kinda help my math skills, but doesn't really help in the grand scheme of things, right?

You know, uh I I'd doing that for three years, but it's it's very boring, right? Banks, okay, three, four percent dividend, okay, sometimes it goes, sometimes it goes down, two thousand dollars, not gonna be Changing your life. Right. So really I was like trying to learn all these stuff, reading the technical, just like you know, most people who started reading these books.

And and and have all these books in in Chinese actually, not English at that time, because I was introduced to a friend. This friend uh works at the broker, one of the biggest broker in Taiwan. And You know, in Taiwan there's some room, you know, back then twenty fifteen, there's like these VIP rooms where a lot of people trade a lot of volume. They get to be in the VIP room and they can negotiate their rate. So they introduced me to this young lady, 24 years old.

Um, I I really don't know her. Uh she doesn't have a YouTube channel or anything. But then was introduced to her and she said, Well, do you wanna invest money with me? I I'm I'm kinda managing money. I might know I don't have much money, but can I learn from you? Can I pay you? And she's like, I don't take student. I mean, I don't have no time for that. But if you want to shadow me, shadow me. Right. So I was shadowing her.

Like for two years, and that's how I got dragged into day trading or really scalping the future options.

of Taiwan, right? Kind of like the Nasdaq, so kind of like the NQ, kind of the SPX of Taiwan, right? I didn't know much what I was doing. I was purely doing technical And I was trading from from Canada. And the reason why I was doing Taiwan is because there's a 12 hour difference so that I can do it at night while holding a full-time job as a project manager. So that's how we get started for two years.

And yeah, I mean if you really wanna hear about the the sweat and tears then we can get into it but

But I'm like, why are you making money why I'm not why am I not making money? Because I spend the same amount of time as you. Pre-market two hours, trade for two hours, I write report for two hours. She said, Well, you don't have the experience and and you know, like starting the first four months, she was losing.

Right. So, you know, back then I was just I thought I have a system. I thought technical was everything, but I didn't know how to digest all the news as of yet because I was so young, right? I was like twenty four or twenty five. I didn't know.

I don't have a life experience of when someone says something like Donald Trump right now, it might not be real. It might not be a negotiating term. Whenever they say something might actually be the opposite. They're trying to save themselves, right? So I didn't have those. wisdom back then. So I was literally just looking at technical analysis and, you know, I paid the price for it. Uh second year was a lot better. You know, uh we make 66%, but you know,$10,000, 66%. I mean

It's not life changing, right? And then I I found that as atmosphere very hard to scale. Um so you know, that kind of got me thinking is that can I do this for my whole life? Uh,'cause I was giving away a lot of my uh weekday nights, a lot of my weekends studying and you know, I had a girlfriend at that time, now my wife, but uh thank God is she's still with me, but

I just wasn't sure if I can do that for ten years, twenty, thirty until I'm eighty, right? Having that mindset of always need to be a tough athlete, kind of like driving a uh cockpit all the time, uh having eight screen. I only have two at that time, but I just don't think that's the way I want to go with my life.

uh um per year and you know I started looking into oh Warren Buffett actually you know sold some option put options on the SPX back in 2009 and he make a lot of money on it. So I'm like, what is that? Like seems like he's on the winning side of it. And that's really when I start going to like options, you know, what is option? You know, it's a little bit more complicated than than stocks. It takes a little bit more time.

But there's more variable, but you can have more control if you know what you're doing, right? That's when I start looking to how can I spend less time. And then yield the same result, even with less results, the return, the ROI on time and stress is a lot more worth it, worth it and a lot more sustainable. Right. So that's when I start getting into options.

And to even come back to the$100, you need to make 100% now. So I'm like, the math doesn't work that way. It's not all always about go, go, go. And you know, I start seeing a lot of people, you know, kind of having a quick success with blow up their account because they have that gambling mentality.

All right. So early on I keep telling myself and reading all these books is like these rich people don't really buy options. They actually sell options. A lot of them, whether that's scalping, whether that's wanting to own something they want to own for a cheaper price. or just getting into something they want for the for a cheaper price, right? So

That's what I'd drawn to. And you know, most of the time when I buy calls, right? I bought some leaps, you know, uh in twenty twenty one as well. Um those were actually I thought it was

You know what? I what could be wrong in two, three years? And guess what? This and all the stocks, most of the stocks I bought literally went down in twenty twenty one and come back in twenty twenty three. So And you know, definitely, you know, uh a lot of wounds there, but it's a small percentage of my account that I allocate to buy option, but most of them are more. selling and and just holding stocks for ETF and and had been doing, treating me quite well actually.

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Right. And now I can turn around and sell some cover call as a, you know, at a higher price or agree to sell a higher price. and get more um cash flow in the meantime and just wait for the stocks to to go up or some of the stocks I I've I really want to hold for long term. I never want to give it away then I just Hold on to it. Right. And because the whole idea is that I gotta have for me is I call it the fast, medium, and slow money.

I talk about the T D bank interview as well, is that, you know, there's inherently different strategy, differ different strategy, different timeline. I want strategy with different timeline. our said and done strategy is more fast, you know, like like you know, one to two month cycle. And then, you know, our our Warren Buffett um Cash flow strategy, selling options on individual stocks is more like a few months. Sometimes you can get stuck for a few years.

if the saw price keep getting depressed, right? And the buy and hole, you know, has been doing pretty well for the last two years. Usually it's kind of five, ten, maybe twenty percent. But last year was exceptionally well. And this year actually our selling option portfolio is doing a lot better because buy and holds is hurting, right? So

I always have different timeline and just allocate one third, one third, one third. So anytime I feel a lot more prepared and I feel I can maneuver the market a lot better.

Right. I have some coaches, I have some analysts, and they're my past client. I picked the best out of them, become my coaches, analysts because we're thinking about launching a hedge fund in one to two years. Right. So with the amount of resource we have. The reason why I could be more passive is because my team is doing the work for me and doing the work for my client. But if I'm doing all this on my own,

Right. Unless I have to support certain community that I trust or have a basic understanding. It's not going to be so passive. Today I was looking at my buying whole strategy because I have multiple six figure. I'm look looking at deploying. Right. I was looking at the target price. I look at a clock again, oh my God, that cost me three hours. I only analyzed five stocks, right? I was checking it, okay, history, it dropped this much. It's it's it it's not passive, right? You know.

capital I want to deploy. I've been waiting for this moment. Right. So I'm looking at okay, what are some good stocks I can buy? Right. I don't know if you want me to share some ticker. I I'm I I'm never that guy to pump and dump anything. The anything I buy, I can't pump and dump anyway. But just looking at it and mean and then looking at Is that a good investment in the long term? For example, I look at the last five years in terms of

their net income, their their return equity is that solid. Has it been only growing 20% per year, but the stop price 10x? Those are I'm like, okay, I I I need to wait a bit longer. I I rather miss out that than be part of that because there's more chance of a pullback. But if it's been growing pretty good, but then get beat up because of certain reason, then those are the companies I'm looking for. So to we through that.

Right. I don't know if AI can do those shots, but that's what cost me a lot of time and think objectively. And most of the time when I can think objectively is when I don't have too much exposure in that stock yet. And that's when you're the most objective. Right. So that's why I spend quite some time and my team do more of the the option day to day supporting a client, you know, the market dropped today. Of course, there's some client panicking.

Right. Oh my God. Right. Hey, we already have planning. Remember it draw hundred, two hundred. This is what we're gonna do. Right. Neutral strategy. They handle that side thing, but I handle more of the strategy on long-term stuff. Right. And that's that's kind of what I handle now.

All right. And he's trying to resign the first year because he wanna he keep asking the Feds to drop the rate. But the Fed says, I look at all these data. Job markets, good. Inflation's not too bad. Why do we need to drop the rate? Right. Meanwhile, you know, the president is like, we want to drop the rate. We want to drop the rate. He's like, okay, you're if you're not giving it to me, I will force.

Right. So he's kind of forcing it in my opinion. So first year is kind of like a reset of every market. And then second year will be, you know, kind of like it finally start dropping the race. So we're gonna start seeing that rebound, right? I don't think rebound be going to second year. I think first year already starts seeing the stocks going back up. But I think the second year

going to first year and the second year is of the presidency, you know, will be start dropping the rate. And in third and fourth year, he will line up perfectly for a really good rebound. He can say, you know what, guys, I told you So that was my kind of uh conviction or you can call it conspiracy theory for the next four years. So that's why I'm not very, you know.

not very worry about it. It just more manufacture. And manufacture if you look at all the other data has been doing pretty well. Yeah, there's some, you know, trading deficit from US, but that's been happening, you know, over the years. So he really in my opinion, his true agenda is really trying to reset it in every way possible. Market reset, business reset, everything reset.

And then now then he has a lot more room to grow instead of like trying to carry that no momentum, no new money at all going to the market. Right. So that's my take on it.

Right. The last trade we put on was yeah, it's actually per week. The last trade our team put on in the option, our set and done strategy, was actually two and a half weeks ago. I was on show actually on March 17. We're filming this on April the third. So, like sometimes I don't want to say it's 30 minutes for three weeks for the people, are you crazy? Are you buying holding? But a lot of time is.

When you're selling option, you have a big room for margin of error because we're, you know, we're selling option and then our strike price really far away. We have a lot of room for error and time is on our side. Every day that goes by. you know if the market don't move we're making money right so uh we have a lot of uh luxury on that side so typical day for me um to be honest since i have the team supporting they give me all the daily news giving to my client i see the same thing

Right. I like at this point with years of training, I I don't even need to see the drawing points. A lot of times I will look at okay, what's a first standard deviation, second standard deviation, things like that. I'm gonna look at it, be like, okay, we're within safety zone. Okay, cool.

I don't need to do much of it. But when the market dropped today, uh the thing is okay, is our position okay? Do we need to adjust a little bit? Or is there opportunity? Right? Because you know, anyone who has cash on a sideline today can be a good day to kind of You know, sell some put option, things like that. Right. But there there could be more downside, more neutral to bearish right now. But hey.

If if you can maneuver well even when the volatility index do crash tomorrow or after three days, you're gonna make a handsome, handsome sum if you, you know, if you use the right strategy. Right. So those are the kind of opportunity like is our position okay? Any central thesis change for the last, you know, every week have a meeting with our analyst as well. No change, okay.

I guess let Theta do his thing then. Then I go go work out and I go, you know, build my other business and and and you know talk to my property manager. And all that stuff, right? So don't don't try to overdo things. It's uh overdoing is not making you more money and it's actually

Making the brokers rich, right? So, you know, um, so that that just my years of learning and and pain, sweat and tears. But in the beginning, yeah, of course I'm like, oh my God, okay, every day learning new things. Okay, that could happen. Right. So anyone who's coming into the market now is like, holy cow, like this is crazy. Right. But um but you still gonna, you know. Be a little bit more composed.

Right. And we know our what maximum how much we could get paid because with spreads you cap your profit, but you know the most of your downside. Right. And we're very far away in terms of You know, if people are listening to this, understand what Delta is. We're really far away with Delta. We're really far away for our stripe price. And you know, we're just targeting.

We still write because time is on our side. So we want that. So we want more safety, right? We're not targeting anything crazy, maybe 10, 20% per year. And that's kind of what we're targeting. Sometimes higher, sometimes less. But that's our Cash flow, like a true cash flow, like income replacing strategy, right? The most more active, but we don't need to pick any ticker. We don't have to do any stock analysis, really just macro news.

And what's the technical doing? And we study the institutional money and make sense and thinking when they're doing this, why are they doing this? And we track, you know, other stuff, you know, institutional level stuff, right? As much as we can get out.

And that's our set and done strategy. And then the other strategy is really I just want to hold stocks at a cheaper price. So I go sell put options on individual stocks or even on ETF, where I get paid premium up front. And I truly want to own it. But if I don't get to own it because the store price didn't drop enough, so be it. I rinse and repeat.

Right. So that's our like Warren Buffett strategy. Right. And then of course I have my buy and hold, another one third of my portfolio, which is buy and hold. And those are kind of like, you know, any gas stocks get beat up. Right. I'm watching a few stocks right now very close to my target price, then I would just start loading up on that. And I I know that sometimes selling options might not cash the movement. So I go buy with cash. I'm not selling any option. Right.

So by and hold, I don't do so much of risk management. But in terms of option, yeah, I mean for for the Warren Buffett cash flow strategy, first of all, you got to do your fundamental analysis, really make sure, you know, as for example, the P ratio is not out of whack. Or companies have only been growing 20% per year, but the last few years, the stock 10X, those are the things I'm like, I'm not even touching it. Um, you know, I like to catch it early on things so the risk is lower.

But if I catch a one of the and drop, you know, twenty, thirty percent, and like I make a mistake, yeah, I'll take losses. But then I have to balance that off, right? That doesn't happen happen very often, maybe five percent of the time. Like so, okay, I still you know, bite the bullet five percent of times okay. Now with our set and done strategy then because it's you know

There's a active more active trading of 30 minutes going on. We have to, you know, with market like this, we have to adjust it more frequently. But the market's been doing really well in 2022, 2023, 2024. We don't have to do And we actually double the return of SP 500 with 30 minutes per week. But this kind of market

It's because it's so volatile. Everything's just fly everywhere. Right. Now we're spending the most time on on our set and done strategy. And buying holders either they're already down or hey, there's cash I can buy more. I'll make sure our portfolio sizing is fine. You know, I don't put too much money in one stock, right? But I don't I don't have more than 10 stocks in my portfolio. So

Right. So for me it's more about protecting what I have. So preserving capital is the number one goal. Continue to grow it while outpacing the market is secondary, in my opinion. Right. So when we say we leave a buffer, there's many ways. For example, I don't go for stocks that like a set. 10x over the last three years, meanwhile, growth only 30. But everyone talking about okay, those are out of this out of the way, right? That's like

risk management slash buffer that we use. But once before I think about okay, actual option trade buffer, yeah, I mean, when whenever the stock or the target ticker pull back, the more it pull back, Okay, the more it pull back, the less likely it will pull back more. Whereas most people think that whenever the stock come back, oh my god, the company is going bankrupt, it's going to zero. So people usually think that way, oh, if it dropped 20%, oh my god, it would drop 40%.

but it's less likely to drop more. But you know, sometimes when we're more careful, neutral and bearish, I'm like, hey, I still keep the same buffer, for example, further away. From the money, right? From the stock price right now. But we can make the same amount of money, if not more, because of the high volatility. So To me is like same buffer or even more buffer. Now I can high instead of 10% away, I can high 15% away.

m many months uh in the future it starts to grind down again. So um what kind of timeframe are you looking at um on selling these put options for um for income or to acquire the stock at a cheaper price.

Right. And um not just, you know, we make less return and we drag out longer, but we sweat less and we're less. uh sensitive to any of the market movement. But right now it's just very move too fast. I don't wanna sell it too far out and everything change. Right. So we're we're shortening our expiration date right now because of that. If that

you know, selling option strategy and a buy and hold, you know, yeah, drag it out was a good idea, right? Even Warren Buffett did it, right? 2009, he signed a 10-year contract selling and put options on the SPX. He made tons of money and say, I bet in 10 years SPX won't be

Right. So we could do that for a more long or medium term, like selling put. I would, I don't mind doing it. But then for our more you know set and done strategy that's cash flowing, cash flowing really, I I'm hesitant to do that because of the reason I mentioned above, less adjustability. Right. And then um, yeah. Because of there's other reasons or other variables. You probably know what I'm talking about. There's other variables that will lock you in and be like, ah.

Uh, first of all, whether I could do it for you or not, I don't think the time frame is right. And I don't think your mindset is right. So I'm not the right person. I don't want to bring that stress onto my team or myself to do that because no one can promise that. But if you're like, hey, Cody have one million. Can we grow at single digit per year or at least protect my capital? Just kind of living a life you're living, traveling everywhere, right, to 12 country in 2024.

Yeah, I can help those people because there's a lot less stress and it's actually what I'm doing, right? So I'm not actually scalping in the market. I'm always trying to say, how do we dodge? all these volatility events, right? All these liberation there. Like, can we really close most of our trades before this day? Right. Like what's the next one? I'm literally literally tracking like Donald Trump's Twitter.

Anything is like, is that real? Is that not real? Did he give a day? Is there anything structured that we can dodge? If it is, close our position. few days ahead of that ride through it right nothing don't write to have any position through it right that's kind of like we have to adapt with what we have but usually when Donald Trump is not there then you know it's more

structure, right? F OMC meeting, uh CPI, PPI, this and that. But when Donald Trump comes in, he's just like, you know, swaying everything around. Mm-hmm.

You can look at four percent per month, but it's not guaranteed per month because market can go up and down. Sometimes the you know stock goes down, right? And you know, for less volatile, even just SP 500, if you go sell put, you make maybe six percent. If that every year, right? Running those strategy on it, right? So you know, anywhere between single digit to fifty percent per year. But if you go like smaller cap.

High volatility, so I can go 100% or more, but how sustainable is that? Right. The more percentage you go, the less sustainable it is just based on probability-wise. So how do you stack those probability? Right. So I hope I don't confuse people, but Really, I stick to the higher probability trade. I always focus on how do I preserve capital? How can I be less wrong? If I'm wrong, it's a small percentage of my portfolio. So it doesn't impact the overall growth.

And as long as I'm beating the market by a little bit, I'm beating 95% of the fund managers out there. But even if I am shy of a little bit in a few years, even if the market is down 10% right now, like our set-and-down strategy is actually break even. So I'm very proud already. We're break-even. My friends are like, did you dodge it? And we're like, no, we didn't dodge it. We still have 25% position going into it. But because because we're maneuvering.

Right. So we're already at break-even. Right. So you know, but for a buy and hold, yeah, of course, since all time high has down 10%, someone's down 20%. Right. That's why I'm putting in more money. Right. So there's always pros and cons, but I really think the people who are focusing on

return uh Cody, I want more than 20%, 40% return. I'm just not the guy per per year. I'm not the guy. I don't want to s sell false hope. I I don't want that kind of liability or or responsibility. But if you're like more boring person, you have bigger amount of money, multiple six figure, then you know, I could potentially, you know, be that person to help you if, you know making sure you're doing the right thing if this is what you want, right? So

But that doesn't mean anything. Right. So for the last two years, you know, it's it's been like that, right? You know, I don't have anything fancy, even if you just have Q, Q, Q, whatever, you know, it's up a little Right. But then during the flat year of like twenty twenty one, like twenty twenty one at the end and kind of dropped down to twenty twenty two to twenty twenty three is actually kind of flat going to first half of twenty twenty three.

our selling done strategy was thirty six percent. I share that with all my clients and all that per year. Right. So that's when it's shy. So flat market with a bit downward trend. Selling option strategy will work better, assuming you don't panic, do anything crazy, and you know what you're doing. But on the crazy up market, selling option strategy will last. the market will lack the benchmark because

The VIX is a lot lower and we're not we're not like chasing it. We're not like, oh my God, it's going up. So let's go closer to it. Let's go more aggressive on Delta. Like we're not, we're actually staying more away. Is that when is that drop happening? When a drop happening, that's the only time we kind of go in and be more aggressive. So on the up year, like spread like gradually up we have a chance of beating the kind of benchmarking, but on the sh more than like 30 degree.

It's hard for us to catch it. So that buy and hold will catch that. One third of our portfolio catch it, right? But I'm doing the flat or downward year, right? Or just like neutral year. That's where 60 to 70% of the time. Right. That's more like range balance slightly going up, then we'll catch that with our option strategy. So hope that answers your question.

Doubling, right? Amount of premium. It's not just double. It's actually more than double. When they go from 15 to 30 to 60, you think it's 4x, but it's actually more than 4x. Right. Because there's, you know, I don't want to bore people. There's that gamma thing going on. There's that excla acceleration.

move. So it's actually more. So that's why it gives us more chance and say, hey, either if we want to do the same expiration day st strike price or can we go more, you know, be more conservative. We can make the same amount. Right. So that's a decision and someone could

can make right so not just my observation you know but and that there's a lot more variables people are like I go to you wrong because I did this because we're talking multiple ver variable but if we're just talking about straight up vexed difference yeah that's what our observation

But a lot of time they forget to look at there's Black Swan event, there's Donald Trump event, there's FOMC event. There's a lot of variables out there that was screwed. screw those 75% within the day, right? The moment it started getting closer to to your your your stop price or your strike price, all of a sudden Delta is like, oh my God, like Cody, like it dropped really fast. And then when below is like, okay, Cody now is one to one now. Like what's going on?

Right. So like I don't think probability could be looked that way, but there's no formula you can calculate a black short is just a a very rigid formula that kind of tells you, but that's not the real probability. That's why our team are always looking at how do we Dodge some of the event. We're okay leaving a little bit of money on the table. We look at, for example, the Liberation Day. I was telling my team.

Liberation Day. Okay, more upside with downside. Everyone's like downside. Exactly. So if we have bullport spread, can we close some of it? Only leave 25%. You're like, yeah, it kind of makes sense. Because what's the chance that will go up? Is Donald Trump gonna say, I have mercy for you guys, but he's like gonna do something innovative that shock everyone anyway.

Right. So the chance of the upside we're even staying still, it's so low. So we actually should have some bigger call spread, more bearish position, not too much, more neutral and less bullish position. So that's the way we position. Right. We have a little bit of bias just based on not just based on technical, not based on just delta, be like. Based on what Donald Trump is going to do and how people is going to think, react to

Right. So that's kind of like how do you quantify that? I don't know. Like do we go from seventy-five percent now to maybe sixty-five because it's more likely to drop? I I don't know how to quantify that, but we adjust that based on our capital exposure, right? We have our limitation in any situation, but all we could do is just we just expose less. How's that? If we miss out, we miss out less. Then what's that? We miss out, fine. Everything's good now. Okay. We can put on more but

Right. So we're not trying to maximize on it, but I I can't answer that probability question. Right. The if anyone thinks the market is efficient. They shouldn't be following me. I just don't think, you know, uh if if math is a thing that you can win. All these PhD or all these AI were be dominating the market already, right? But it's it's not, right? Why is the old warm buffet still

beating everybody with his old brain, man, everything's manual and still winning. And there's gotta be, you know, more than that, right?

Who knows they're gonna raise the rate, you know, in the beginning of 2022, right? And then really shock the market that way. And my real estate, same thing. Like my real I have real estate too. So it was actually taking a hit in terms of price. I'm from Toronto, Canada. Right right now it's dropped 30% since all time high, you know, average wise across the major.

But you know, so you see a lot of that, right? So like a lot of people think, ah, Cody, what do you do to take advantage of it? I'm like, if I say I'm not gonna touch meme stuff, I'm not gonna touch meme stuff. I will continue focusing on doing the right thing, even if During certain months or a year, I lose money because I know I make money long term, but I do not adjust.

out of my rules and say, hey, I think this is a way I can pull a fast one. I can make money just for the short term. I I don't do that. I rather missed it. I get laughed at then long-term people like Cody, what do you do? Now you jump from meme stock to gold stock to crypto. I'm no, I'm I'm just a stock option guy on SP 500 blue chip. I'm that only guy. I'm boring, but that's how I seen the rich people continue to get richer.

But whereas all the other trade retail traders, you you you know, all these influencer if you look at them like this year they're talking about crypto, next year they're talking about gold, the mining stock. Then I don't know, gold e-commerce now dropshipping, like I'm like Dude, does that mean does nothing work? Right. But you have to like sit through those years that are not doing well if you have such a strong conviction about your stuff, right? Or do

Yeah, could you share a little bit of uh what are your kind of your core rules if you have them?

rule out a lot of things. So there's only a small basket of things I can touch. And a lot of time I what I like to do is uh instead of me doing research on this company thing, have a better knowledge. No, I just look at the most well-known investor. Right, Warren Buffett. Like beginning of today, before this call, I was actually the reason why I spent three hours, I was looking at um Singaporean.

uh Singapore GI C fund. They're GI C fund. So they have three funds. They're, you know, like kind of like their pension fund right like Canada pension fund us don't have one donald trump is trying to start one right their their their pension fund overall is they're making f you know three to five percent per year true return but i was trying to look at

How they break down the portfolio and what are the heaviest holding? Because if they're heaviest holding means that they have the strongest conviction. So I like to start with, like I said, Warren Buff is top 10 holding, Charlie Munger's top 10 holding, Bill Gay's top 10 holding, Jeff Bezos top 10 holding, Elon Musk's top 10 holding. And say, okay, yeah, those companies don't work. No, no, don't fit my criteria. Okay, I only have 10 left. Okay, that's only 10 I can look at.

I like to look at from that standpoint so that everyone do their work for me and I pick, I in my opinion, I pick the best out of the best to sell options. If I'm wrong, chances are a lot lower than thinking I have the resource. I have the vision that these people don't see. I'm like, what's the chance of that? Right. So I really just trying to stand on John's shoulder. And my clients stand on.

Giant shoulder, giant shoulder, right? So um I want to stack all the odds in my favor, and I don't want to do more work. I try to do less work. and if less work makes me more money and give me a better lifestyle, I'm I'm happy with it.

Right. And a lot of time it's zero to fifty percent. And with that, we're still targeting, you know, like 10, 20% per year. So I mean, what else? Cause I like I don't want to fly so close to the sun. Right. That's the way I look at it. Right. And, you know, if we take a step back, you say, Cody, I I was asking you just about selling options, your one buffet strategy, selling put options that I want uh to own a stocks I want to own at a cheaper price.

That's still, I don't. Um like the your broker will give you to use the ability to use three times of your cash money. Doesn't mean you should use it. All right. So really sit on that it's kind of like, you know, I don't I don't know how to put this, right? Like broker has a different agenda than you. They want you to trade. They want you to take action. They want you to day trade. They want you to second trade almost. Not day trade. They want you to hour trade, minute trade.

Secondary. The more transaction, the better. So how do we how do we do that? That's why in casino give you a chip. You don't feel the money. They give you a chip. They give you a credit card to try to distend yourself from that feeling of money. But that is when you it's kind of you go to a casino. Okay, I'm a billion, I'm a millionaire, but I only gonna spend$100 today. Everyone's laughing at me. I'm like, Cody, come on.

A thousand. I'm like, no, it's just a hundred. I know I gotta lose it. It's for fun. So and I can tip really well. So everyone's happy. Hey, Delay, if I make money, I'll always tip you, right? So like you gotta have those mindsets, what is that limitation? If you only have a hundred thousand dollar, that's the maximum you will use. I don't use leverage because leverage is a double-edged sword. You're laughing, you think you're genius when the market goes up.

But whenever the market turns, you're the first one to go. Right. So I was actually looking at, you know, like some wealthy people, they suggested me to look at, you know, asset baseline. Right, security baseline. For example, if I own, let's say, you know, a hundred thousand dollar Microsoft, they will go two to one to lend me fifty thousand out. But then when I re-all the fine print, they're like, oh, by the way.

It's just like margin call. If it goes down more than fifty percent, we're gonna call you better have money in one day. Or we're gonna sell it at your zero, your zero out. I'm like, hold up, Microsoft. Okay, last time I went there, holy cow, in two thousand, it took them 13 years to come back, holy cow, and drop 1 in 50%.

Okay, what's the chance of that happening? Low, but who knows? So anytime I see those kind of probability happening, I'm not looking at how much more money I can make. What's the point of doubling your$100 to$200,$200 to$400, but then all of a sudden you lose.

And I I even chat GPT asked, does Charlie Monger one buffet use security-based landing any leverage? I I asked so many times in so many different ways. The question answer is always no. That's why they never you never heard them blow up their account. Meanwhile, all these hedge funds blow up their account averaging once every four years, they blow up their account. Right. So

Uh the when they try to get their alpha, they always forget to look at the downside, right? Everyone's looking if this workout, that workout, this workout, then this. Yeah. I was like, most of the time it doesn't work out that way. So how can you say if this doesn't work out, this doesn't work out, this doesn't work out, hey, time is still on our side, stocks don't change, we still make money.

Okay, I'm like signing up for that. Right. So very different mentality than than a than a trader and yeah, gambler and all that.

That's what we I wouldn't say struggle, but we spend the most time on. Otherwise, most things like we said, more said and done. But with a wild card of a US president and we trade S P five hundred. I would say that's our biggest struggle because all the nuance of like the probability of figuring out, you know, what's the maximum capital we could use, what's the strike price, we already have those figured out, but it's that most.

Wildest car that I I can't call Donald Trump, right? And Donald Trump might tell me something that's he'll change tomorrow. So what's the point? But it's like, okay, how can we identify those events? If we dodge 90% of it, there's only 10% left, we're okay with it. Right. We we put in our best effort. That's what we struggle. I wouldn't say struggle, but spend the most time on.

And if you're interested in more like the general economical, geopolitical stuff, I open a new YouTube channel. It's only one month old with like 64 subscriber. It's called a US8 update. If you can't find it, type in Cody A behind it. The algorithm will help you find me and um yeah, you can find me there.