222 W/e 05 jun a Protected Strangle

That Was The Week

 FTSE up 50  but there seems to be little enthusiasm either way. Non-farms disappointed https://www.forexfactory.com/calendar . Though once upon a time these numbers would move the markets ±1.5% in a minute. Thus news is no longer news of great import. However inflation does not seem to be the bogey man, and employment is a mixed bag. We are told that the hospitality sector cannot find staff- well did they simply evaporate from pre-Covid? So, should we be worried or is this simply a case of the market finding a natural level? Personally I have little appetite for the UK coffee shops. However cinemas are always a great distraction, and it’s hoped they survive as people’s passion for Netflix etc is worn thin. I enjoy the whole ritual of going to the cinema, personally. There are many different options and policies when looking for rental car insurance, you can get  more info about this in https://www.homoq.com/rental-car-owners-guide-to-insurance-coverage/.

We try to educate on this site and encourage traders new and old to look beyond the frenzy of crypto, and all the ‘get rich quick’ stuff, but it would be churlish to ignore the new tech. Elon Musk seems to have found a new crypto to shout about, creating another frenzy. Well, understandable when trading an index can be a big yawn. We like big yawns, they make us profitable.

And this: https://twitter.com/adarsh_pratap/status/1401163070488018946?s=20 No idea if it is genuine. We try to keep up!

Distraction Trades and………

DAX- nothing to see here- no actual trade entries and an exercise in patience.

DOGE seemed to bump up from $.32 to $.40 and back again and crypto’s of all manner seem weak.

A reminder why we trade real numbers and an index that is less prone to such drivel:  https://thestonkmarket.com/jim-cramer-fires-entire-staff-after-soundboard-calls-him-a-stock-pumper/

Such indignities and excessive behaviour really have no place in a serious financial market.

Legacy Trades and 222 What to Do?

220 A New Expiry-June

Open Interest Anomoly Trade -this is fun. The OI for puts is greatest at 6200, and for calls 7300. So,let’s go long both sides and SELL at these strikes ( 12, 9.5) and BUY nearer the money, at 6400(18) and 7225 (21.5). We are creating a short iron something. (Sloppy condor?) Thus we are buying these unlikely looking spreads.

So, our debit 18 -that is our max risk.

6400 put=3.5    7225 call= 11.  ( shorts  7300 call 4,  6200 put=2.5) UGH! Terrible- LOSER

We could morph this by selling the 4 long puts at 26 and buying a July 6800/6600 put spread(55.5-32.5= 23) giving us a big put ratio spread, and enough left over to make it a low cost trade at 4.5.

221 crazy ratio calendar

We are selling 1xJuly 6600 put and buying 4(four) June 6600 puts. Debit 7.5

now 6.5×4= 26,July 6600put= 32.5  One of the worst trades ever attempted. GOOD! We won’t do this again!

222 Something more traditional…….. as if!

Summer Volatility

So, does this indicate a vol spike is coming? Let’s get busy and find way to make some coin after the 2 recent lame ducks. We hold them purely to show a real outcome.

Here’s a strangle with a protective put spread, or put another way a put spread financed by a strangle. Max profit 50, risk at 6600 and 7250-actually ∞ !

We buy the June 7050/7000 put spread 60-44=16 We sell the 6650 put and 7250 call both at 8= 16.