That Was the Week Ending 01 Dec

https://uk.investing.com/indices/ftse-100-vix-chart

FTSE This Week 01 Dec   – DOWN  :  Monday- Friday a drop of >1%  Closing at 7300 though futures indicate a later close at 7350. Friday’s data is not reliable, and options data is way out of wack. We may have issues finding a trade this week, because of that.

Daily Volatility:   8.4-12.22  from 8.4-11.7

FTSE cash index -open 7409 high 7469 low 7289 close 7300 from open 7381  high 7461 low 7350 close 7410

FTSE volatility- 9.8-12.22   (last week: 10.7 close 9.8) 

 

What Trades Would Have Done well, this week?

Selling after placing a protective put spread. (There are times when you can ‘see’ something that looks like value and if the market goes against you, it’s no big deal). This is known as ‘legging in’ and it’s really NOT for everyone as it requires patience and a high degreee of calm. So how DO you leg in? Example:

7250 Dec put(long) 19, 7150 put(short)  11, thus the spread costs 8. Now 45.5 and 27= 18.5.You could do any numer of things here- sell another 7150 put for 27, now you have a ratio spread as a credit of 19. Peachy- risk at 7050. You could have closed out for>100% profit. You could morph into a free trade butterfly too.- Sell another 7150 for 27 and buy a 7050 for 18. Could bring you 100!

SUMMARY

Some market movement and VFTSE at last expressed a little interest.  It has been tricky to find trades due to the tiny volatility lately. But,we can hope this marks a new phase where we can take some profits as risk is compensated by better prices. There is nothing wrong with being wrong. We can survive low cost debit trades,when managed sensibly. To lose a few hundred each month knowing there is a few thousand along the road, that is smart trading. To sell blindly as that is all you know, is just folly. You’d be unhappy about selling naked puts at 19, to find they are now trading at 45. 

1 Comment

  1. This trader could have made serious coin but otherwise distracted on Friday.This is why we use LIMIT ORDERS when we are busy!

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