That Was The Week FTSE Crept Up…. Again
So, 4 Weeks of rises now, are we due a dose of melancholy yet? While number 10 is no longer in party mood we wonder what the heck is going on. However, the BBC proclaims we are roaring ahead, GDP is fabulous, nothing to see here. Well, forgive my cynicism but pre-Covid levels? At least 20% of GDP is just debt. Propping up companies that could not afford to pay people, so the future generations can take the hit. Wouldn’t it be nice if things are better. Global warming all in hand, conflicts resolved. None of it matters because there’s so much money in the system it ends up in the hands of a few. The ‘trickle up’ effect whereby the lower paid contribute to the coffers of the rich, ergo the stock market.
It was vital for households to be kept afloat and furlough suited some people, but is Covid over? The stockmarket says a resounding ‘YES’ .
250 A trade every week…more or less.
A milestone -almost 5 years of weekly trades, from the tentative first steps to the more recent ‘suck it and see’ trades. We hope to have covered all the bases with real trade pricing, a little wisdom, and some sound reasoning. Options work! Our trades here prove beyond doubt, that with a prudent approach, options trading produces far greater profits with barely an hour’s screen time each week. However there were losses, few and far between and tiny. 249 trades and we have not blown up the account.
Barriers to entry we know are high, but most traders go belly up because they are under funded. Your capital is not 100% at risk, unlike some of the crazy spreadbet stuff we hear about. So, if you want to start thinking about making more than CPI Look at the track record. Our challenge- cherry pick any random sequence of 4 trades and show there’s a loss.
Get in touch if you think we are wrong!
CBOE Webinar
It is hoped these 2 graphics are self explanatory and they reinforce the fact that options can boost your wealth far more than passive investing.
What is amazing is the dynamic VIX call strategy- and as VIX is mean reverting it may not be that hard to trade. It still makes little sense that the SPX is up 53% in a pandemic. Not so hard when you use someone else’s chequebook!
Sad to note that only US traders have such rich pickings.
Distraction Trades
DAX 2 modest wins 1 loser 1 no entry 1 break even -we’re on a roll!
ADAUSD $1.2666
XRPUSD $0.776
Maybe flogging a dead horse with these…..
Legacy Trades and 250
We morphed 247 into a huge butterfly 7150/7300/7450. This was already worth 30 and it’s what we would have to pay in normal circumstances. This is a kind of cheat but we need to show how options trading is ongoing and we cannot afford to miss entire trade entries, though sometimes finding a trade every single week is a big ask.
Last week- it’s worth 36, not enough to get us interested -and remember we are playing with profits- now ugh! 20.5 after that 1%+ rise this week.
UGH- now worth 11.5 but it’s a freebie remember- a big drop required.
248 Jan Expiry still has some juice in it
7200 put (32.5) and 7450/7500 call spread (43-25.5) -Can you tell what it is yet? (poor taste joke!)………………. Cheeky plagiarism from Tasty Trade, it’s the Jade Lizard. Selling the put and selling the call spread- We sell the 7450 and buy the 7500. This gave us zero risk to the upside. We take in 51 and our downside risk level is 7150.
The call spread was 30 and 15.5 for the lone put Expiry is 9 trading days away we need a nice drop below 7450.
Now still around 45 -run it as it cannot lose to the upside?
249 Taking a View and Getting B*llsy
Feb7300 put was trading at 78 Jan 7300 put is 25.5 Guess what we’re going to do? A very spicy 3×1 We sell 3 Jan puts to buy 1 Feb now 7 and 58– run it to expiry but it’s done very well WIN!
250 Return of the Weekend Strangler
It’s been a while since we tested this but why not? A strangle is of course a short call and a short put, with the aim of the trade being to keep away from the underlying. This is using the Jan expiry- ie one week to come good.
7600 call 20.5 7450 put 21.5 We take in 42 credit with time decay working for us, we hope the index does not hit 7643 or 7407 it’s a cheeky little ‘in and out’ trade- we need to be nimble if it gets ugly.
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