Trade 82 A Response to Trade 81

Trade 81 -It Was Never a Great Idea

 

Trade 81 was 7850 call calendar  2×1 for credit 14.5 , now 23. Quote: A sideways drifting market is NOT good for this trade, and we have had some price action recently. So now it is a loser, not by much, but nevertheless it is an ugly trade. Caveat- this may have made a profit intra day but data for that is not available currently. However, we can always set limit orders, it costs nothing though may ‘limit’ your profits. As previously stated the delta worked for us but nothing else. With options we can always choose to put delta, gamma, theta and vega in our favour. Having more than one metric obviously puts your trade at a better advantage.

Trade 82 Calendar But With Puts

Far be it for me to be an expert in technical analysis, but I think the FTSE has very little chance of dipping below 7200, but it is now the period when the  theta curve steepens in the near month. Therefore I am looking at selling 3 of the June  7150 puts at 6= 18. I’d buy a 7150 July put for 24. This is a debit trade for 6 therefore with some risk,and margin required. It is far from perfect, but if we are looking for winners, if nothing goes horribly astray the July 7150 put is likely to be worth much more than 6 at expiry on 15th June.

Where The Action is For UK Traders

It is noted that the spreadbet platforms seem to make massive profits. We wonder if that has occurred to their punters? You can set up a spreadbet account in minutes and get trading, or gambling as it should be termed. Betting is gambling and dressing up this form of gambling as ‘trading’ is sadly what we Brits plump for. Instead of considered risk management. Options are not popular, as they are hard to learn, and hard to execute. This clearly separates the ‘have a go’ crowd from the serious money managers who wishes to control their financial future. Our kind of people. With discipline, due diligence, and some basic maths, nothing comes close to options trading for generating monthly profits. When the stock market next plummets, and accounts are closed out losing 50-80%, we will be trading enjoying the volatility. And then some. Stay with us.

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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