192 W/E 09Oct Butterfly Strangle Options Trade

That was the Week As the US Election Nears

A positive week for FTSE– though positive is now a dirty word. The VIX declined 13% and this is no surprise. The incumbents in the US will do anything to ramp up the stockmarket for the election. They cannot cure Covid, they cannot prevent evictions, they cannot creat jobs. But they can ramp up the stock market. We know the ECB and FED have been directly buying into markets, and this may be the course for a few weeks yet. September’s wobble now a memory as FTSE regains the 6000 level. Here’s an interesting graphic of 2020

Hard to argue against the dreaded Index Trackers, and as Alpesh Patel says- the money is in the US.https://www.alpeshpatel.com/go/

Meanwhile back in the UK

https://uk.investing.com/indices/uk-100-historical-data

Would you want to own a FTSE Index Tracker? That is why we trade options on FTSE, and aim to generate far better returns as the track record proves. Often we can place a monthly trade and wait for expiry week with hardly a glance at the market.

 

Distraction Trades

DAX had 3 ok entries but Monday and Friday were indecision days, and hard to know in advance of course. Big swings are self evident and those are the days to trade. Sometimes it’s better to utilise your time elsewhere when the trades are going to lose money or at best break even. Forex- this trader struggles to make sense of any of it, so limiting again to indexes. That dinosaur the DOW looks interesting and perhaps mirrors DAX

WEEKEND STRANGLER- sorry late! Nov 6200 call 63.5 Nov 5700 put 64= 127.5 premium

Legacy Trades- All good …. Again.

Trade 189 -One Trade 2 possible Routes.

We were selling 3 Oct 6200 calls at 45.5, buying 1 Nov 6200 call at 114.5

Then part 2 Delta neutrality, by selling a 5700 put for 43 and buying a 6250 call for 32.5. (Overall credit of 30 something)

So in its original form a three by one….. we had 62.5 -(12.5×3) =25. A credit of 22 to open and a lucky winning trade. Was 38+22= 60  WIN

Now: 63 CLOSE!

We then had to mess with it and  the long 6250 call was worth 8.5 but that short put was 86. Thus we had 47 credit+8.5 minus 86 which gave us 31.5 loss     Was….. Credit to open of 30 plus a new credit to close of 2.5 a WIN  

Now Total 61.5 CLOSE!

Trade 190 Puts Again but a Debit Trade

Here’s the plan…. we bought the 5800/5700 put spread 120.5-86= 34.5. We paid for it in part by selling a 5400 put for 30.5. Our risk is thus at 5300 and we make money anywhere below 5796 at expiry, and it only cost us 4 Now…. 65.5-(40.5+10.5)=14.5 Modest win  we ran it again. Now 19.5 CLOSE!

Trade 191 Revisiting the Jade Lizard

14 days to expiry so theta is savage. We sell a call spread and an OTM put. But…. the total premium must equal the short call spread (50 points). No risk therefore to the upside, downside risk (see below) max profit 50 with FTSE above the put strike  and below the lower call strike . Risk is thus the put strike plus 50, in our case therefore 5625. See below

Thus we sell the 5675 put 36, and sell the 6000/6050 call spread (47.5-32.5) =15. Total premium therefore 51

From Thursday: 25 to close- we took in 51, so let’s say we close out and take 50% of max profit. CLOSE!

Trade192 Iron Strangle Fly, Iron ratio Butterfly, Iron Fly Strangle,Got it- Flyangle!

We generally don’t like to trade so close to the expiry, Friday due to PIN risk, but here it is, and the reasons why:

It’s a short iron butterfly but we sell 2x the wings. This gives us short 2x 6100calls(18×2) ,long one 6000call(59) and long 6000put(43), short 2×5900puts(16×2). Therefore 59+43=102, minus premium taken in from those 2x short wings, 18×2, 16×2 gives us 68, so our cost 102-68=34 The logic here- our risk(±3.3%) is at 5800 and 6200, but our max profit 100-34 =66

 

 

3 Comments

    1. Where do you get your ftse 100 options quotes from?, the quotes are hard to find, I would like to start trying out some strategies that I sue for SPX.

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