Trade 180 Week Ending 17July

 

Vix Down Markets Up

That Was The Week – FTSE Up 3.2%

The economy presented a mixed picture, with China allegedly rebounding, UK economy looking grim, job numbers hideous. Central bankers underpin this however with ‘Yuge’ bundles of wonga, and an ongoing commitment of more to come. Idiot that I am I still believe the global economy must slow down. However, here’s a view from the top: https://www.bbc.co.uk/news/business-53444823

Yikes! Quarter of a billion jobs? It’s inconceivable. So, what is the plan? More of the same may not work if so many jobs are lost due to Covid changing the game. Homeworkers, as so many are, this could see a lot of admin roles cut, and where an office had staff of 100, we could see 30 homeworkers carrying more or less the same workload. Company bosses eyeing cost savings, must be so delighted in some sectors. Should this unfair situation continue? Also, options traders, like us contribute nothing to the economy, while we make profits.  Charities are not averse to our donations, we must always put something back.

On a Lighter Note

The EURUSD and DAX journey.

I started from a position of clueless optimism. This situation persists!

So, in choosing very simple signals it seems that exit again is key.  Discretionary traders may be better suited. While the trading record is patchy, the entry signals are working. However,Thursday and Friday were not good days with only modest profits possible. EURUSD is a bit of an enigma with tiny profits though lower risk. Meanwhile DAX can run for 100 points, and gives clear entries at certain times of day. I will collate trades when numbers are sufficiently meaningful.

Quick Link To Free Education- More Good Stuff From a Proper Source

Emails again -there are always a few gems – like https://www.optionseducation.org Who graciously sent me a free E-book of options basics- And there is a ton of good stuff on the website. So this is from professionals who want us to trade, and are not selling some magic system. Basic though much of it is, a refresher is always a good idea. And so to the business:

Those Legacy Trades

Weekend Strangler

last week C 6350 62.5 P 5600 67 total 129.5  Yay! small loser 132

 

This week C 6450 70.5 P 5950 72= 142.5

Trade 178 Playing Safe

We bought a PUT butterfly. We bought 6000 put, sold 5800 x2 and bought the 5600. Cost 17 max profit 183, max loss 17

WIN– hit 37 . Running to expiry would have been a disaster.

Trade 179 No Guts No Glory

Guts -that’s actually the name of an in-the-money strangle selling the 6200 put and the 6000 call.  Risk is if the index goes beyond (6200-268) 5932, and to the call side( 6000+ 268.) 6268 However the value of the short spread is always 200 against us,so max profit is 68 Now you don’t have to wonder why it’s called a guts! Failure is not an option but this is really not a preferred trade. Laugh out loud…. at expiry it was 262 

Trade 180 A Revisit to a Curious Trade

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

You may have figured it out… it’s a calendar(time spread) selling near month, buying far month, but…….selling a very far OTM 5500 put. Our cost is now zero and theta is again onside bigly. Hard to quantify risk and adjustment, and it runs to expiry, but could partially close anytime.

 

 

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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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