204 W/e22Jan-Biden’s Options

That Was The Week We Saw 21:21:21 on 21st day of 21st Year of 21st Century

Biden moves into the  White House despite Trump sacking the usher and sending the butlers home. This caused an embarrassing delay. You couldn’t wish for a more spiteful parting gesture from that _________ person. But maybe it’s fake news from the Mainstream Media. We now live in the age of bewildering data. Covid is a fine example. Nobody can extrapolate from data that in itself is bewildering. Hats off to https://t.co/d4Cqy7h7vq?amp=1 (Prof John Hearn) He posits the question- if I have a positive Covid test and then 27 days later fall down the stairs and die, is this classed a Covid death? Short answer? ………..Yes.               However, parallels in any other data field may be hard to find, but perhaps options present such conundrums. We like Tasty Trade’s much vaunted 46 days to expiry as a point of entry. OK that’s a stretch!

A Bit (pun intended)Techie

So, tech news watchers will know Apple reports on Wednesday and their new product stream shows no signs of disappointment. This blog is written on an iMac mini which is now at the end of its Apple life, but the replacement will be £100 cheaper, faster but with a smaller hard drive( no problem). Thus it’s a winner all round for us Mac devotees. Aside from someone mislaying the house 2TB hard drive, it now makes sense to separate storage from processing, even without the cloud. However, a harsh lesson learned this week. When using a memory stick it pays to remember where you put it! Memory is now ludicrously cheap, however. I had a major issue using the Cloud as Apple do something very weird with it. Oh,and my 16Gig RAM- the new iMac mini does not allow any user upgrades

Probably no need for huge amount of RAM. I may need to upgrade to 150Mb broadband. Again crazy cheap.

 

Distraction Trades

Week 2 with NO viable trades. Yes,there were trade entries, but they were not within regular trading hours. I need an automated alarm, and the ability to wake up and place the trade correctly. 50% of that is achievable. Out of hours trading also seems to be much more momentum based, drifting in the direction of entry.

 

Legacy Trade  203 and 204 What can we come up with?

203 So, let’s have some fun with this. Future= 6679 Cash= 6735

Some strategies:

1. (risk reversal) selling the 6900 call  for 63 buying the 6400 put for 57.5 Credit 5.5, risk unknown.WIN ( Best outcome Friday poss close for credit 12)

2. , short call spread 6800/6750 ( 129.5-104)= Credit 25.5 max profit 25.5 WIN  (21.5 to close- marginal win, we run it)

3. a long put spread? 6450/6400 (66.5- 57.5) Debit 9  max profit 41 LOSER! (small loss, it’s now 8 )

4. Big Lizard- a Variation of the Jade Lizard  Sell ATM call spread and put. So for simplicity let’s use 6650 strike. Call spread 6650/6750 (189-129.5)=59.5 plus 6650 put 118.5. Total premium 178.  Therefore, our risk to the downside at 6472 upside risk 0 as the premiums exceed the 100 point width of the spread. WIN       (161.5 to close giving credit of 16.5– but would you?)

Our outfront leader for this week was thus the Big Lizard, we run all of these. How much more fun is it to have 4 potential trades instead of: long or short?

Trade204 In a Stagnant Market

Let’s look at a low risk trade- the Iron Butterfly. This means we buy the wings and sell the body: wing 6800 call 61,  body:( 6700call 108, 6700 put 128),  lower wing:6600 put 90. Thus we have 108+128= 236- (90+61)= 151. Which gives 77. Risk therefore 100-77=23 

We are short some Deltas (58+45)= 103, -(32+43) = 75. This means  short 0.28 or 28 Deltas in old money. We need expiry to land on 6700 but can of course, close out any time.

1 Comment

  1. I was hoping for some feedback- those Deltas in Trade 204
    6800 call long + 32
    5700call short -45
    5700put short +58
    5600 put long -43
    Actual Deltas +02 as you’d expect from any kind of butterfly

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