That Was The Week -The Election Puts Puts on Hold
Too close to ‘call’ with any degree of comfort.( See what I did there?) America’s bizarre election process continues, Brexit looks dire, Covid locks us up. Not to mention non farm payrolls, 1st of the month, horribly violent events, recently in France, now in Austria. Political pundits and world watchers might think we are teetering on the abyss. We all need a bit of YouTube so we may indulge in all the amazing free uplifting music education and even conspiracies. Oh wait, I believe much of David Icke’s stuff has been removed, other flat earthers may be available!
Consensus on so many issues, is in absentia. Were we ever at such variance? I understand it’s hard to know given that any opinion canvassed by pollsters is of so little value. Modern tech means we screen cold calls, we don’t respond to withheld numbers, and online polls? Who gives honest answers, even when we can be bothered. This is no longer big data this is unreliable tiny data. Supermarket reward cards may be of more use for profiling voters. So, there it is- gratis. Once you know a person’s political leanings by their shopping, the polls can come right. Smoked salmon-Conservative, Oven chips -Labour. Bite me!
Trading Winning and Avoiding Losing
Trade 195 and weekend strangler on ice until we have some idea. VIX http://vixcentral.com tells us Dec and Jan may be rocky months, but that’s no surprise. https://seekingalpha.com/article/4384300-vix-is-voting-for-volatility-ahead?mod=mw_quote_newsThis popped into view on Monday so it may be prudent to align our trading with what the market is telling us. However trading low near month Vol against high far month means selling Dec and buying Nov. This reverse calendar trade is nothing new. Hand on heart I’d be looking at a combo- selling calls to buy puts,on the basis of the recent up move giving us 5 green days. A shorter missive this week due to so much uncertainty but let’s see how our trades have fared.
Those Legacy Trades
Trade 193 That Skewed Ratio Straddle
Initially this options risk graph seemed to be a tad suspect. http://OptionCreator.com/stg60ei Actually it’s not bad! So, to reiterate our trade. We sold the NOV 6000 straddle (293.5)x3 and bought DEC6000 straddle(395)x2
Those prices 293.5(x3)and 395 (x2) 880.5 and 790 a credit of 90.5
Though I don’t like this as I don’t understand the nuances*, it is now 84 . However this is meant to run and ideally we’d like the Nov expiry at 6000 * It’s a volatility/theta play of sorts
Last week …… 16.5 and 441 x3 1372.5 46.5 483 x2 = 1059. Loss 313.5- 90.5= 223 -UGLY
This week 100+215.5 (x2)= 631, minus 44+ 147.5 (x3)= 574.5….. 56.5 + 90.5 = 147 Credit =WINNER!!!!
Trade194 4 Weeks to Expiry Sell A Put, Then Another Then Another. Oh, And Buy One Put
We sold 3x 5600 puts but….. we bought one 5950 put, those premiums 71.5 x3, -201=13.5 credit
Risk at 5425
Updated link showing increased vol……. https://vlab.stern.nyu.edu/analysis/VOL.UKX:IND-R.GARCH
Those prices last week 397, 164.5 x3 = 493.5-397= loss 96.5 minus 13.5(big deal) = 83 LOSER We run it for now- 117.5 minus 21.5×3 = 53 Credit + initial credit 13.5 =66.5 Win !
Trade195 -This will be a monster, once we have clarity. Promise!
