269 W/e 03Jun Calendar time

That Was The Week -Truncated by Jubilee Celebrations 

So, not a lot to report on but we had to wait until the US close for VIX and an idea of how their markets are behaving. We are concerned when there is such a disconnect with the might of the US markets. Tech stocks in the US are the major factor, and the £sterling has taken a hit against the greenback. However the seems to be 85p without deviating much. Much talk of the GBP taking a hiding in due course. 

Last week we mentioned the other disconnect -the real economy. Here’s an interesting article:


I love that the author puts Reagan’s face on the chart, it makes it more fun. Seriously, the point is that Joe Average has not benefitted while the stock market, typically the preserve of the rich, has made a vertiginous climb in recent years. Can we make use of this anomaly, or is economic history of little use other than to inform?

This cropped up in Twitter: https://optionstradingiq.com/wheel-strategy/

While it’s American it is useful and there are links to numerous approaches. We believe it does no harm to see what’s ‘out there’. One key point is about technical analysis and that’s a personal thing but candlesticks can be really helpful if one has to take a shorter term directional view. Does TA work for you?

Relative to a FTSE chart there are a few formations that have helped. Mainly though, the resistance level. FTSE being a bit dreary- more of a wet Tuesday in Blackpool than a sunny Friday in Miami.

Distraction Trades

ADA Cardano $0.552

XRPUSD $0.387

It’s crypto grim!

DAX  One win 90+, one b/e +30, 3 no entry -we continue but it seems a lot of angst for little reward. Options are sooooo much nicer.

Legacy Trades 267 and 268 and 269

267 We Went Assymetric

So here we see the CME futures options calculator. However for our purposes, the future is not far from the cash. So instead of doing a simple put ratio buying one selling 2, (OK sometimes we sell 3!) We buy 2(two) and sell 3(three).

Hopefully you will see the prices make this a tiny credit trade 88.5×2 -61×3= 6. Our real point of interest is how the Greeks stack up,and this could do very well if the market carries on down. Bear in mind that to date the S&P500 is down 18.66% Nasdaq down 28.28% FTSE is flat, but since when were we immune from the US? Hence this trade to capture a gentle down market in the next few weeks. Zero upside risk, downside 6900 …. But with many possible adjustments

Prices now 24 and 15.5 so.. 48 and 46.5 We can afford to sit on this it’s a freebie-tiny credit, so it’s only costing us a modest amount of margin.

This week: 23×2 and 14.5×3 -so 46 against 43.5  Nothing to see here!

268  About 3 weeks to Expiry, Assymetric

Much to mull over and so many potential trades, let’s go with an old but quirky friend- the ‘bonkers’ calendar straddle 2×3. I have had fun trying to place this with my broker, but when it works……. so what is it?  We buy 3 near month straddles and sell 2 next month straddles. Logic of the trade, we have an extra straddle with greater gamma and delta primed for a big move. NB I have used the CME calculator in ‘straddle’ mode, rather than inputting individual legs.

What could go wrong? Time decay and inertia are our enemies. This is not a well researched strategy as the entry rules are a bit of a secret, but hey, we don’t learn unless we break stuff, right? Oh and by selling 2 and buying 3 we still get a credit 60.5  (361×2=722, 220.5 =661.5 )

You all know a straddle is: same strikes,put and call ATM or as near as.

This week: our short July straddles 334.5 x2 = 669, and our Jun long straddles 191.5×3= 574.5. So 95.5  to close, so currently losing

269 Making sense of a short week the Number 3 crops up again, we have a theme!

So due to the Jubilee we have to use Wednesday’s prices and again we are going for the racy calendar ratio –sell 3 x near month puts buy one next month put. We choose the 7200 strike


 Keen observers will note the huge theta, and gamma is not going to be kind to us but so long as we don’t go too far down, we’ll be peachy. Again, room for adjustment is excellent. It’s so rare we actually have to adjust, let’s hope the FTSE gets Feisty.