That Was The Week Market Smashed Up
Hard to argue when the financial sector shoots up. It is double the value of industry. Should we be ashamed of ‘paper shufflers’? The UK has a good rep for banking and insurance and it’s a big earner. Woefully our tech sector in FTSE100 is virtually irrelevant. Compare and contrast to the US whose big tech basically carries the bulk of the market and economy. Think FAANGs and MSFT.
Many thanks to Fidelity for the heat map:
https://www.fidelity.co.uk/markets-insights/heat-map/?index=151.10.UKX
FTSE is once again within ‘spitting’ distance of its all time high-anyone remember 2018? 7903? Me too- no idea, I thought it was 7400 and change. Oh dear it does not seem that merit pays any part in this meteoric rise. Simply too much money injectingcontinues to feed a voracious beast. We can only trade what is there but this cynic remains, cynical. I’m old enough to remember when we made cars the world wanted to buy.
Distraction Trades
DAX – one win +140, one loser 30. Again we were kept out of potentially losing trades,so no complaints but always in review.
XRPUSD Now $1.17 This idiot took a look back and saw the low of $0.85 at the end of Sept and pondered the strict entry criteria self imposed at $0.70, thus missing out on another near 50% rise. Is there a potential for much more?
Those Legacy Trades- Looking a bit Lame,1 big win pays for 3 losers
Trade 235 October Expiry
Time to buckle up and play safe?
What could be safer* than an iron butterfly? We sell the straddle, buy the strangle and hope our strikes hit the sweet spot, as this may not do much in the meanwhile.
Was 88.5 -we hold to expiry and gain from a drop. Remember our loss is limited to 15, our gain a max of 100
LOSER – We lose the max 15 if held to expiry but the week took off outside our boundaries making this unwinnable, expoaing the weakness of this trade- you need to be right on the key level.
Trade 236 Ugly Trade
We were selling……. yes selling the 6800 and ….buying 2x the 6700 puts
Thus we have a debit trade, costing (29×2)- 40 =18
This trade only makes money when the Vol kicks up a fair bit, it’s not attractive as theta works against us and we really need a good drop.
No, we don’t like it but Murphy’s law says we are wrong. Whatever the outcome it will be a good lesson.
Last week it was rubbish- we’d lost our debit -a loser, but might as well morph into a forlorn looking put ratio spread. We buy the 6900/6800 put spread for 5 and sell those long 6700 puts, for 5.
We failed to catch a bit of premium on a blip down. Market smashed up. LOSER
Trade 237 Last Oct Expiry Trade?
Given the revelation of the propensity for upside surprises, let’s get brutal with a 3×1 calendar. We are selling 3×6800 Oct puts to buy 1(one) Nov 6800 put.
40.5 Nett profitWin! (We are profitable when taking into account the previous losing trades, thankfully.)
Trade 238 Tapping into the last dregs of expiry
Everyone thinks 7000 is the key level so let’s go with a cheap little Xmas tree- we buy the 7000 put 19.5 then sell the 6900 put for 9. We pay in part for this by selling a 6800 put 4.5 now 10.5-4.5= 6 That is our cost and probably our forlorn hope, though we could make £££. Generally speaking if Thursday is an up day it does not bode well for a drop in expiry week.
Yup- a forlorn hope and a LOSER
Trade 239 New Expiry New Paradigm?
No upside risk wanted. Is there a trade for that? …………………….. Jade Lizard anyone? OK so it’s not original and volatility is horrible, but let’s go with: selling the 7300/7350 call spread and a naked 6900 put. 56.5-37= 19.5 for the call spread and 30.5 for the put. Maths PhDs will know that this equals a credit of 50. Risk of loss is therefore at 6850
