That Was The Week The US Got Bullish
Market commentators love to talk up the seasonality, and October has been a monster month for the US. Other Octobers may also have been positive. The GDP number seems to suggest that the recession, widely predicted is not happening now. However the headwinds are substantial, and as always the poorest in society are paying for the largesse gifted to the rich.Allegedly. We are not here to get political but your intellectually limited writer attended this:
While our trading generates an income how we spend our money is another matter. It has taken many decades for people to take things seriously. The aims at this event seemed to be about fairness and a healthy regard for our planet. And ways to support a sensible lifestyle. So, a couple of the talks were about empowering younger disadvantaged people and educating them. This took the form of environmental and financial education. Our mission is education, and quite specifically options. Distill that to index options. Lack of education is so expensive it cannot even be estimated.
And Some Other Events
In other news this also happened: https://www.youtube.com/watch?v=k6-ArbjBXRs The Tradier Options summit- some good stuff, a lot of seasoned traders who have their own take on things. The link is still live so you can have a look, but it’s over 5 hours long, so cherry pick!
It’s the season! See also: https://www.ixinvestorshow.com I mainly take comfort at these things by the lack of options traders! This time, Guy Cohen is there. He is the real deal and I admire him enormously. Check out his books, and yes he trades options. Look out for yours truly, the ‘older’ guy with a pony tail, clutching a much coveted blue Euronextliffe (vintage!) shoulder bag. I have no connection with Guy, but have met him briefly on the odd occasion, and read some of his material. I’ve also seen him give a presentation and it’s very much worthwhile, in my view.
Distraction Trades
ADA $0.4071
XRP $0.47166 Cryptos still in the doldrums- should they be a trading vehicle or ‘buy and hope’, investment?
DAX 3 wins +190 2 no entries -the strategy works it’s just tedious- would be fun to have it coded.
Trade 289 New Expiry, Any Old Iron, 290 A new Strategy, sort of
Again let’s try and break something! We will have a slow burn, an iron butterfly. We buy protective call at 7050 (105) and protective put (102) at 6850- because we are selling the 6950 call and put 156 and 139.5 gives us 88.5, max profit, max possible loss 100-88.5= 11.5
This week we have those prices at 6950 159+75, then the put at 6850 48, the call at 7050 99.5 gives us 86.5
Trade 290 That ‘New’ Strategy We claim no authorship of this but we will have fun seeing how it pans out.
This trade is a call spread risk reversal. Now a ‘risk reversal’ is a synthetic ie it mimics a future or another underlying instrument. You would sell a put to buy a call. In our example we sell a put to buy a call spread
Here’s the trade. We buy Nov 7000 call for 127.5 and sell the 7050 call for 99.5. This therefore, costs us 28. To pay for this we sell the 6725 put for 27.5.
As you can see we have zero risk to the upside but a max profit of 49.5 -nice! However, we have a naked put which may need to be adjusted.
Expressed in £ -at least for this week
For the new people to our site- and welcome, by the way. Those prices are 127.5 =£1,275, 99.5=£995 and 27.5=£275 But while I have bought cars for less than the price of that put, doing spreads makes costs manageable. I understand people may be daunted by the prices. We would not advocate simply spending £1,275 on any ill conceived venture. £5? Sounds much more palatable,especially when the reward is £500 (minus your £5 stake of course). This has 3 weeks to go belly up. The market seems to have too much money, yes there are naked call buyers, so…….
