Trade 68, The Bleak Prospects,Taking a View


The Bleak Picture…………(actually it’s 2010)

The bigger picture? Well, we are talking about options Trade 68, I jest about the snow. Resistance for FTSE? 7450. And support? 7100– in my view. VIX is still a bit spicy, VFTSE not so much-what do we make of this? Not a great time to buy or sell, but as always we have to make a choice here. Thus we have a starting point rightly or wrongly (is that a word?).

Sticking With Near Month Expiry

I like the near month as it gives us a chance to roll into next month, when we feel we cannot do anything else to repair a trade.We can be right about levels, wrong in our timing. This is one of the great aspects of options, time is another dimension to our trading. Some years ago I found myself in a horrible position with futures and looking to roll is very nasty,as they expire every 3 months.


So…… What’s the Trade?

Do I have a clue about the future? My weekend sporting predictions were 200% wrong! Still hurting from Wales and England’s defeat in the Rugby 6 Nations. Can I do anything about it? I can choose the way I feel about it. Same goes for a losing trade. So, while we try to avoid loss, it’s a good thing.        To quote our uninspiring authorities, when they fail  ‘ lessons will be learned’.  Seriously?  You don’t want to hear that from your dentist. We need to learn.

The Trade

Going back to support and resistance, I like the idea of this trade…… It is partially naked, so we must be prepared to adjust. However, my bias towards ratio spreads was recently borne out, in the recent mayhem. So- call ratio spread buy the 7350 and sell 2x 7450 March calls. Put ratio spread buy 6850sell 2×6750 March puts. Calls cost 9.5puts are a credit 8. It’s cheap….like me!


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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