Trade 141 Week Ending 19th July

That was the Week

What Happened? Almost Nothing

Apologies I will try to source VFTSE or an equivalent to give at least a flavour of market sentiment. It requires no Nobel prize to see that the market is not volatile. However-don’t you just love it when financial commentators talk about how volatile it’s been? Faisal Islam is in the frame for business at BBC now, and he’s at least a smart cookie. Even if BBC luvvies lose their s**t when finance comes into view, we need some helpful input.

Political enemies seem to be stirring global tensions again. With Iran playing ‘sieze the boat’ with our oil tankers, and us with their oil tankers. What is really absurd,however, is shipping this stuff around the world. AND….. the Suez canal was not even in the equation. Hence the Iranian tanker going around Africa, and being siezed near to Gibraltar. Future generations will doubtless look upon us as the most ridiculous greedy infantile spoilt babies since the dawn of time. I’m not available to solve the world’s problems, but it seems we need to bang some heads together! Old school rules.

Global Warming and Mass Extinction

Deny the causes if you will but June was the hottest ever recorded-with Europe over 2ºC hotter than normal,and some freak heatwaves. We should not contribute to this negatively, but we can change the way we live, which could start to reverse the catastrophe on the near horizon. Time to invest in gold?  Since 2000 an 11.4% annual return is claimed by gold bugs. DYOR, or buy some long dated call spreads in gold miners.( I have absolutely no idea if any of them are even real- so seriously DYOR)

Those Legacy Trades

Trade 136 originally a credit 83 ( ( short7350 straddle 126+36.5)  long 7250 put and  call  (19.5+ 59.5 ). A losing trade,but in for a penny etc. Now  184-( 100) = 84  We lose 1, closed on Thursday. Now that is not a bad dealOK! It ‘s a loser

Trade140

Here’s the trade: Aug straddle 82+86.5=168.5, long x3= 505.5. Sep straddle 122+135= 257 short x2= 514.

Closed for 8.5,giving us a profit of 17 ( see message Tuesday 16th) Aug 172.5×3= 517.5, Sep 254.5×2 =509

Traders, we now have no legacy trades and a whole new month to trade.

Trade 141  Can You guess?

A one standard deviation strangle- that’s correct.

Here’s one I prepared earlier:

I don’t like naked, I don’t like strangles, but we are starved of premium. While selling in a low vol environment is not generaly a good idea it works for a lot of people who blindly sell options every month. We will also find some fun adjustments along the way. Assuming this moribund market stirs from its torpor.

We thus sell the August expiry 7225 put for 22, and sell the 7650 call for 11.5. total credit 33.5. We’d take 10 lots here and use some margin ± £20k. Risk at 7191.5 and 7683.5 

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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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