Trade 60 A Double Dilemma For Expiry

Are Stockmarket Moves Secular Events? -Trade 60 Looks To Capture Profits

Expiry week is upon us once again. The 3rd Friday of the month is when we find out who’s swimming(selling premium) naked! Premium sellers can be panicked as their positions go underwater. Perhaps there is a malevolent force at work here. We like to think so! Normally it’s a sleepy event but recently there have been drops. How does that stack up for this week’s expiry? Ever flipped a coin?

How To Trade Expiry Week

I get a monthly email singing the praises of expiry week trading, on the basis that you are not paying ‘time premium’. Personally I have never seen the relevance, as we never blindly buy options in isolation, but this guy must have his reasons. You have to be right on these trades as there is no wiggle room. We like wiggle room.

Trade 60 Two Bites of The Cherry

 

 

 

 

 

 

 

 

 

 

 

 

The options chain gives us prices for the following trades:

Put Condor  using strikes: 7350/7300/7250/7200 prices:  21.5,12.5,8.5,6.5 Debit 7

The details of the trade- long 7350, short 7300,7250, and long the 7200.

Condor- buy the wings, sell the body, so the risk profile looks like a bird. A bit

Straddle 7400 prices: 35.5,  39.5 Debit 75. (ok we are buying naked longs!)

But One’s Expensive, One’s Cheap

Each to their own- you can buy a £500 car that will run for a year, or you can lease a Mercedes for £2,000 down and £300 a month. Both will get you from A to B, but the choice is personal. Even considering environmental damage. A new car produces tons of pollutants, the old’banger’ chucks out bad fumes. Good analogy?

Two Trades- Take Both, One or The Other?

Risk limited to premiums paid…….. I’m too cheap for the straddle!  For those who like to stretch their brain a little-try to’price’ a call condor.

Filed Under: InformativeStrategiesWeekly Trade Idea

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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  1. Terrapin Trader says:

    SO! Another hefty winner with the 7400 straddle- it made 180+ so you’d more than doubled your money*********,and it was limited to premium paid- no margin required.
    The condor? My weapon of choice-silly me-that has gone to almost nothing. You could have taken both trades but frankly I would not have done that as the straddle would have made coin if the condor also made money. At this time of year the volumes are wafer thin and the clowns, sorry money managers, like to ramp things up to make thewm look like they are smart.The only time we don’t get a Santa rally is when the market is hit by a dose of truth. The market NEVER drops on lies, only cold hard facts-and those are become as rare as a Blue Whale. Allegedly
    ********* see next comment- I’ll leave this obvious error

  2. Terrapin Trader says:

    Oops! Looking at wrong data- the 7400 straddle hit about 110, NOT 180 -that is the Jan figure

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