That Was The Week Nothing Much Happened, Except the Big Money on the 1st of the Month
So, the typical cash injection from 1st month ran into the Friday morning before reality kicked in! However, VIX while dipping only one point lower in %age terms dropped 6%, any other market that’s huge. So, how would you trade that? Could you wait for a dip and buy a call spread? It’s an interesting prospect if you have a low boredom threshold. However for us, the tired old FTSE is excitement enough. Thus principles remain the same whatever the underlying, we aim to adjust for the conditions.
Last Week And Missing Content
Apologies sincerely offered to those who were awaiting further content mid-week, this had not been possible while external events continued to take precedence. There may be further interruptions, so please stick with us.
Market Pundits
A couple of links that seem to affirm the wild enthusiasm that to my mind would seem to gloss over the global pandemic. However we know markets operate in a ‘bubble’ (pun intended )and FTSE is comprised of many global companies. Rising Covid numbers may become a factor and variants will have to be dealt with on an ongoing basis. So should we join the party? Thankfully we have other weapons in our arsenal and volatility is a better guide, allied with a choice of levels and no requirement to be directional.
https://www.investing.com/analysis/chart-of-the-day-ftse-about-to-stage-massive-breakout-200589491
https://moneyweek.com/investments/investment-strategy/603500/jim-mellon-what-im-buying-now-uk-stocks-agtech-and?refid=E0661DA38AB471CED3A0E181367F33E4&utm_campaign=money-morning-newsletter&utm_medium=email&utm_source=newsletter
Distraction Trades
DAX – a couple of biggies and some ‘No Entry’ signals. 29th and 30th -one up one down for 100+ points. Peachy.
$0.66747 Delighted that XRP has not gone to zero. This is of course a ‘buy,hold and despair’ trade- also known as an ‘investment’. Binance was in the news as they cannot allow trading of crypto derivatives. CME certainly has regulated derivatives on Bitcoin, is it time for the UK to catch up?
Legacy Trade and Back on the Horse with 225
Trade 224 Expiry :July, a 4 by 1
This is NOT, repeat NOT for the faint-hearted. We are selling 4(four) 6500 puts and buying only 1 solitary 7000 put. Those prices: 29×4, 120.5. Debit 4.5 .
8 (x4) and 41.5 = 9.5. The max we could have got last week was 12.5, 4.5 cost, so we made 8.
Keen observers will see from the chain the trade is worth 18 now and is a nice win, with little chance of any downside risk. We will keep it going up to expiry in case there is a big plummet, but common sense says take the 18, when it was opened for a debit of 4.5.
Trade 225 And That Friday Vol Crush
Fans of the strangle would be delighted this week as the 7200 call (32.5) and 6950 put (27) =59.5 credit from Thursday, became 25+22= 47. Easy money isn’t it? However, these are lousy premiums for our Friday entry.
Readers tell us we still need a weekly trade, so …..a bit of a forlorn hope this but it’s an iron butterfly- selling the body, buying the wings. However this is new ground using the ’25’ strikes our centre is 7125 with wings at 7225(calls) and 7025(puts) Risk is 100 minus Premium taken in. (58+68=126) – (17.5+35=52.5). Thus we take in 73.5. We know that our risk is 26.5. Max profit 73.5…….
Here’s the chain: 
