323 W/e 30Jun Quiet Week, Trades Gain from Theta

That Was the Week FTSE Drifted Up on Friday

Independence Day is apparently something of an event in America, so possibly a few quiet days next week. We saw a bit of enthusiasm for FTSE on Friday. International investment companies may be regretting any moves to Paris, as the rioting seems to be quite dramatic and perhaps is a symptom of underlying unrest. London’s tame efforts to ‘stop the City’ a few years back hit a flash point as a McDonalds was trashed. So, not to belittle the events in Paris but London’s exodus in favour of the French capital may have been a misstep. Our country needs London’s formerly exalted global position. HSBC are moving into BT’s old HQ in another downsize story after Covid showed how effective homeworking can be. In other news….

Yours truly decries those who would trade on a phone, little realising I have done exactly that! I’ve had a trade in mind, checked the market and phoned in the order many times. Hypocrite moi? Mainstream media sometimes throws up challenging articles. What does concern me, is the ease with which people can gamble on a phone. I’m not the febrile teenager looking for a thrill, however and that was my point. We can have our workplace anywhere so long as we are online. I see no downside so long as we remain mindful of our work. We remain mindful of our trading rules.

Brutal Humiliation, Contrition Mandatory.Sorry!

I wish to offer my humblest apologies for what can only be described as a woeful piece of ignorance on my part. I had simply assumed that the options prices we are quoted were, as historically true, delayed by 15 minutes :https://www.theice.com/marketdata/reports/265

As I had been in communication with theice.com and raising this, it was taken as fact, while the truth is ………..the prices are LIVE! Curiously, I had logged in a few weeks ago at 08:00 am and had seen prices, but thought nothing of it. I was thinking it was maybe part of a trial, and dismissed it. My trading style means I look for likely trades, do the calculations,& Greeks, look at the chart of FTSE and use that combination to call in the trade. Live prices were not on my radar as I phone in to request prices. Brokers are happy to do this and maybe 1/3 of the time I don’t trade. Anyway, it transpired that smarter people than me(not difficult to find) had challenged my assertion and it was confirmed that indeed prices are live.

By way of explanation. The first hour of trading is often not even on my radar. My process, in this regard is to check existing positions, and there have been times when I’ve missed out. Excuses,excuses, I hear you say. Absolutely. I rarely sleep in, but on occasion I am late to the screen. Yes, there are times when this has not been profitable. Funny though it may sound, I’m not trading to get filthy rich. Paying the bills and having a nice surplus is the ‘Goldilocks zone’ for yours truly.

Useful Stuff:

So the FTSE’s volatility is always a point of interest, though we have yet to use this site live. We sometimes find such resources helpful, even in this volatility drought.

https://take-profit.org/en/volatility/indices/ftse100/

Distraction Trades:

ADA $0.2873

XRP $0.47109

DAX 2 wins 150, 70 2 no entries 1 break even(+30)

GILTS: U.K. Gilt UCITS ETF (VGOV) £16.52 from £16.61

Legacy 321(Magic number!) and Trade 232 In this off kilter Market

Trade 321 in a flat low vol market- Yikes!

Let’s get spicy in this season of low volumes low volatility and low expectation of actually having a smart trade. Theta is not our friend so we look to take on more risk and sell more options than we buy. Here we sell 2x the near month, July strangle 7400 puts,(24) 7825 calls(24), and we buy one August strangle: 7400 puts (55.5) and 7825 calls (44.5) .Here’s the numbers: 55.5+44.5= 100 and 24+24 (x2)= 96. Our cost therefore is 4

Overall theta was around 1.92 and Deltas, we are not far off neutral. Risk – well it’s going to get ugly outside of our strikes. Hand on heart it’s not ideal but we always remind readers it’s about learning, winning is the cherry on the cake.

July put 7400 56, call 7825 4 August Put 7400 101.5 Call 7825 11.5 Gives us 56+4= 60 x2 =120 for July. August: 101.5+11.5=113. Last week it was in a loss 7

This week….peachy July call 3.5 put 22, Aug call 63 and the put 12 Gives us 75-58= 17 our cost was 4 remember. More time to go yet.

Trade 322 Some Movement but Volatility Being Supressed

Again we can only use theta in this ludicrously low vol environment. It is a concern but if we take a real plummet, we will at least be able to morph/adjust/roll. The above calculation: https://www.cmegroup.com/tools-information/quikstrike/options-calculator.html?utm_source=LINKEDIN_COMPANY

We are doing another old chestnut, the put ratio spread. Buying the 7500 put and selling the 7350 put twice. Cost:90.5-44×2= 2.5 Logic of the trade? We have risk down at 7200, and we may find this trade in profit quite quickly above that level, even if we have a blip up to 7600 or so. Should the FTSE dip lower than 7200 we will adjust, if the market shoots up we have no risk other than our tiny 2.5 debit

This week 44 and 16 x 2, we are in profit ( 12 -2.5) =9.5

Trade 323 Horrible Trade- Let’s Do it!

We will place the much acclaimed ‘broken wing butterfly’. By way of explanation, the ‘broken’ part comes from the cheaper wing strike being further out, so instead of say 100 point wide 7450/7550/7650 butterfly (using calls here) The 7700 is bought instead of the pricier 7650. I wonder if it make sense. And will it work?

We buy the 7450 call 131, sell two 7550calls 63.5(x2) and we buy the 7700 call for 13.5 Thus our cost is: 17.5