Trade102- Website Issues

Cannot publish with graphics

Here’s the next trade so you can be sure it is real and not some cherry picked claim to a trade as some sites may do.

Trade 102- Let The Market Decide

Sometimes we like to leg in, when we don’t know where we are at. I might think this is the bottom of the dip and 7000 is support. Part of me thinks there is another leg down and that level would be….6700-6800. So, what about the upside? 7300-7350 – ish. I’m making a guess based on recent price- and by recent I mean this year. I note that to date FTSE is down this month 6.13%. Here’s the plan-it’s a short iron condor. The conventional wisdom says to sell spreads, we will buy them, and the strikes for Nov: buy 6850 put at 50sell 6800 put for 41, buy the 7250 call for 23.5 and sell the 7300 call for 15.5. So, here’s the math’ 50-41= 9, 23.5-15.5= 8.Total cost, therefore 9+8= 17.

Logic of The Trade

We are in for a cost of 17, we need to recoup this whenthe market lets us. Right now there is nothing to the upside-it would be folly to sell another 7300call for 15.5. On the downside? We could sell6600 put for 20. We now have risk at 6550, but a tiny credit of for the trade. Greedy me wants to wait for a bigger move, and leg in.

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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