Trade 181 Week Ending 24July

That Was The Week – Change of Mood?

Our index down 2.65% this week but FTSE does not have the same constituents as S&P500 with FAANGs which hold it aloft. China seemed to take a hit on Friday too, as tensions increased over tit-for-tat consulate closures with the US. However it must be argued that the blatant abuse of copyright is damaging and grossly unfair. The BBC programme entitled ‘Fake Britain’ shows presenters tracking down people peddling fake stuff from China. So, are we headed for a showdown? Copyright is a tricky area but the rule of law is there to ensure innovation is rewarded. Innovators are the driving force for growth. Copyright is only part of the dispute however. Covid has done China’s veneer of credibility much harm.

Here’s a link to the esteemed John Mauldin and a great understanding of how the markets are moving. Subscribe, I urge you https://www.mauldineconomics.com/frontlinethoughts/valuation-inflation

A Little Off The Path But a Fakery Theme

A young lady with curious accent claiming to be phoning from New York called about my wife’s shareholding in a certain company. New Yorker she most certainly was not! However, she knew my wife’s details and wanted a signature on an ‘indemnity declaration’. A promise to buy these shares discretely. My smile broadened during the initial conversation as the alleged offer price for the shares was 3-4 times their current value, with an inane attempt to suggest it was a hostile takeover. Scammer as she clearly was, she offered to email this form to me. I use, and recommend, a spare and safe email address for such occasions. Scammer’s  ‘indemity’ had several spelling mistakes so obviously wrong. So, what was the scam? My wife’s shares being whisked away, with her signature it seems. Clumsy but remotely plausible to the gullible/greedy.

Googling the phone number showed it to be from Birmingham. So, FCA Scamsmart were informed and it does seem there are scams like this aiming to con shareholders out of their stock. Some of our readers may also be interested in this https://www.theregister.com/2020/07/23/carding_forum_scams/?utm_source=dlvr.it&utm_medium=facebook&fbclid=IwAR2bccO8Dd-8f1v3FgITAeA5fsa9UEcfV9j17sDH3ra4n5ozTQZF3smhIOk

Trading is hard enough without such horrible people -so stay sharp and don’t be greedy! Options traders are not prey to such things as the scammers cannot mess with us.Hackers can,however, get into any online account.

Slightly Off Track

EURUSD DAX Trading

Funny old week when the took off against the US$ 

Dax -a few good entries for 100+ 

I can reveal I use a simple moving average cross to enter but exit is discretionary- looking for 90+on a good move with a stop of 30( that has not been tested). I shall as promised, in due course reveal how these trades work out.

Legacy Trades

Last week’s Weekend strangler was  C 6450 70.5 P 5950 72= 142.5  on Monday 51.5 and 66=117.5. Winner 25 credit I am seriously trying to discredit this! 

This week    C6300 48 P5750 52  Credit 100

Trade 180 A Revisit to a Curious Trade

Based on Futures price(cash expired at 6262 this week)

Our calendar(time spread) selling near month 6000 put, buying far month 6000, but…….selling a very far OTM 5500 put. Our cost is zero(margin req’d) and theta is onside bigly. Prices (short 106 and 66)   171.5 = -0.5

Trade 181 Far OTM

Another theta play with a put ratio spread and zero cost. Selling 2×5550 put 59.5 and buying 5800put 31. Credit 2.5(Margin req’d) Logic of the trade? We are safe down to 5300 we could see a  drop in the next few weeks and the 5800 level is of interest. Zero risk to the upside and if we go nowhere we might close out for a decent credit. >10 would be fine

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About the Author: First found out about options in 1995.From the arcane magazine Exchange and Mart! First trade- a covered call on VOD in 1999. Made 10%,VOD almost doubled. That's when I realised I was not a good trader,and I was forgiven thanks to the amazing world of exchange traded options

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