That Was The Week Not Much Happened
How to get a handle on this economic background? So nothing seems to faze the markets despite the obvious tragedy unfolding. However it’s far away and not a major player in global finance. Gentle reader, that is not to belittle that tragic situation. See below a graphical reminder of the Iraq invasion and subsequent mayhem on the ground.
We’d seen the markets plummet, from the millennium, until the start of the Iraq invasion. War is good for business. “Buy when there’s blood on the streets” to quote Baron Rothschild. I do think this is not meant literally. The redoubtable Baron may well have had some insights. Kinder voices might suggest it means to invest like a contrarian. We need to digest events in our own context and while Vix had a little blip up, there was no signal to get busy trading. In fact yours truly closed out positions and remains sidelined. Investment advice that is not. I often state, with no false modesty that I am a terrible trader!
This popped up in my voluminous inbox: https://us12.campaign-archive.com/?u=6f6dd1454734e10d0f08f73e6&id=1137a2d1dc&e=a6d15b8777
I like these guys at SJ and this article I find highly poignant, and it’s why I do not like a ‘one for one’ calendar spread. Options give us massive advantages over the regular trade, as we can use the Greeks to tell us what our position may look like given different scenarios.
Distraction Trades and a Bonkers Week
DAX– it’s trying to kill me. One loser and not one clear entry, though had I been at the screen at 07:00 am on Thursday I’d have made 100. Monday’s entry was our loser( our stop is 30).
XRP I claimed bragging rights on making 50% and thus sidelined, but then… big rise to 1.28 down to 1.06 and now 1.16
Having closed out at $1.18 and while this is long term, I’m not tempted at >$1.00
Trade 232 Broken Wing Condor
In fact it’s a one winged condor! We are buying the 7150 call, selling the 7200 call AND selling the 7250 call.
Risk…… unlimited minus the long 7150/7200 call spread (not normally recommended, but of course you can roll up,down and along)
Logic of the trade, the market has double topped around 7220 and the bear/bull argument seems to be in balance. No downside risk and tiny credit 2.5 Just one quirk- look at the volatility -that’s not a smile, that’s a grimace. Now a CREDIT of 3.5 to close out…..rivetting
Trade 233 Something Bonkers? No- A jade Lizard.
Market expectations- nothing too radical, job numbers are ok, no sign of the FED taking away the punch bowl.
So we have a Jade Lizard sell 7150 call 64.5 buy 7200 call 39.5 gives us 25, then sell the 6900 put for 26 Our credit is 51.
We have no upside risk but downside risk at 6849
While this is a bit of a strangle it does optimise the call side. We could do something like 7000/6950 put ratio spread- ie buy the 7000 sell 2 of the 6950s for credit of 23.5.
