Trade70 -This Kills Me, But Maybe It’s The Smart Move

The Trade Calculations, or Math – You Decide!

The calculator courtesy of http://www.cboe.com/framed/IVolframed.aspxcontent=http%3a%2f%2fcboe.ivolatility.com%2fcalc%2findex.j%3fcontract%3dD846C3FB-A0CA-474C-8C95-635BAACF0084&sectionName=SEC_TRADING_TOOLS&title=CBOE%20-%20IVolatility%20Services

Showing FTSE April 6900 Put @29 and &7350 Call@33.5 – so what’s the trade? Hold on to your horses here and let’s look at some key factors.

Is The Market Headed Back Up?

I don’t know where it’s going but one or two inputs that I like- up day down day count. Anyone else do this? To date in 2018 it is 26 up, 26 down. In a trading year typically we used to see 51% up days. Is such a short time period statistically relevant? No. Do I have a gut feel about the market?-Yes. How often am I right? 100% of the time – in retrospect. I am unrivalled in predicting the past. What do the key indicators tell us? Call for the chart….

Our Conundrum

We are drawn to these options but at this moment cannot decide on a strategy but we are looking a combo- sell one and buy the other.

7350 call at 33.5 6900 put at 29 – a 4.5 credit or debit.

What can we use to give us an edge? What does the chart tell us? The indicators are pointing up, but the last 5 days have been up. To be blunt I don’t want to take the trade -resistance looks close, but support has remained steadfastly above 7000. So, here’s what we are going to do.

Biting the Bullet

We will sell the put and buy the call, for a debit of 4.5. But……. and I claim author’s rights here. So we reserve the chance in the next few days to adjust.  We always aim to show the flexibility of options and we do that when trades go wrong. We don’t seem to get many wrong. This is doubtless as they are academic-yes some of them are our own real trades, but we cannot legally reveal them, and we trade during the week. We use Friday’s close and live market prices so as not to cook the books. So- light the blue touch paper….

Filed Under: StrategiesWeekly 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:

    Could have closed out this morning in the first hour for 10- but we want to have fun don’t we? When I trade these I look for a price that I might take and then look for 30% more on entry and exit. I’d take this trade for a zero debit as also could have been done today- the F has got its knickers in a twist while the DAX continues its whirling Dervish moves

  2. Terrapin Trader says:

    Well, today was interesting not sure what is moving the markets -impending war with Russia? Who knows but one thing I would have considered here-if I’d still been in this trade would be to look at morphing into a put ratio spread and maybe spending a bit to do that- but we are only day 2 into the trade. If the market looks like it’s going off a cliff we need some protection however as anaked put get get big on you in a heartbeat.
    You may also wish to know I am not, by nature bullish so if forced to use these options,I’d have sold the call and bought the put- my stock in trade in 2008. This would have made a tasty 28 and acredit to open( I always seem to lose when I place a debit trade)

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