342 W/e 10Nov Vol Crush as VIX Blips Are Fugacious!

That Was The Week, The UK Is/Isn’t in Recession.

So, a big thankyou as Friday’s lovely dip gave us a nice exit, while the Vol crush had made longer term trade exits irresistible. Housing blips up, M&S doing fine, WeWork is redundant. We learn that business woes continue as closures hit highs. Re-financing is of course a huge issue and cast your minds back to March and the US bank failures as they had loaned money out at nothing% and had to refinance at 5%. Doesn’t take a genius to see where that’s going.

In other news, the VIX slunk lower again this week and Friday was a tale of 2 markets, the S&P went up, the FTSE plummeted down almost 2% at one point. Now it’s worth noting the FTSE is on a P/E of 10.15 and that is cheap, earnings are not awful, dividends are being paid, the USDGBP has dropped a little and we understand the bond sales in the US were the worst in 30 years. UK Gilts steady again, the 10 year blipping up, but way off from a nosebleed 4.7%. Yours truly had an email purporting to be a bond issue from Thames Water, paying 8.25%, guaranteed by FSCS. Curiously the link would not work as my antivirus would not allow it. Water companies clearly need money to start to correct the parlous state of our waterways, but 8.25%? However, the link is not working.

Education Thrice Again

Two genuine links: https://www.optionseducation.org/

https://www.cboe.com/optionsinstitute/events/

I find some ofthese are awful and one I could not tolerate the poor delivery and sound quality, but the content was very basic.BUT…. always worth a look

And this:

Steven Goldstein

Performance Coach. Executive and Team Coach to People in the Financial Markets Industry – Host of the AlphaMind Podcast

Non-attachment is a profound concept that holds the power to elevate personal and professional performance to remarkable heights. At its core, non-attachment involves maintaining a sense of detachment from outcomes and ego, while embracing a deep commitment to the process. This approach encourages individuals to focus on the journey, rather than fixating solely on the destination. In the realm of high performance, non-attachment provides several key advantages.

Personally I feel nothing for the FTSE, but if I did it would be mild disdain, in true British fashion. Doubtless other nations are proud of their flagship indexes. Good luck to them! Trading can drag you through every emotional minefield, and it takes time to get comfortable with being uncomfortable. Lately, the market has been very very kind to me and I feel uncomfortable with being comfortable. New territory after some inexplicable profits came tumbling in.

Distraction Trades

ADA was $0.3241 now $0.3794

XRP was $0.61360 now $0.66746 Another steady week for Crypto

DAX 3 losers -30×3=90 1 no entry 1 win +100 A bust this week but we stick with the process

UK Gilts were £16.37 now £16.36 holding up well in a week when rates bumped up again.

342, and our Legacy Trades

Trade 339

It’s simple, it’s spicy it’s got more front than Blackpool….. The good old Put Ratio Spread. But, this is wider than the Thames at Putney, it’s 200 points wide. Logic of the trade? It is very low cost, at 3.5 and could make 200. Here we go, we BUY one 7350 put for 101.5 and SELL 2 7150 puts for 49. Risk therefore at 6950 no upside risk and this may be a quick turn around if volatility drops like a stone, as it is wont to do.

Last week- 132 and 53×2 gives us a credit of 26, we paid 3.5. Close out? NO

Now those prices: 48, and 12×2=24 We watched this during the week and it did much better, well 30+ intraday.

Closed out for 48 WIN! intraday highest price, when the FTSE took a dive. Yes we’ll run to expiry for fun

Trade 340 Bull Call Spread+

Watching yet another rather basic webinar, it occurred to me that the language is not really helpful, and I allude to bull and bear. This is a trade that would do OK in a flat market or moderate’ bull’ market. Losses potentially small. We buy a Nov 7250 call, for 126.5. We sell a 7350 call for 74.5. And then we sell a 7450 call for 39.5. Thus our trade cost is 126.5-(74.5+39.5)= 12.5. Our hope is that we make more than 12.5 and our max profit is 100- 12.5= 87.5 should the market roar to the upside we can adjust above the problem level of 7550. Twenty days to expiry…..It’s Witchcraft.

Ooer, missus! didn’t see that coming. Prices last week 165.5, 90.5, 39.5 = 35.5 a nice profit, and yes, we’d probably close out, but we always run to expiry

Crazy times- now 124,- 50.5, 13.5 = 60 WIN!

Trade 341 Neither a Jade Lizard, nor a Twisted Sister

While it irks yours truly to sell cheap puts, this looked ok in light of the major market moving events now out of the way. We buy a call spread and sell a naked (!) put. And yes, you’re right, eagle-eyed readers, Tuesday was 45 DTE for the December expiry and Tasty Trade would be looking for the 1 sigma strangle. We’re not! Here’s the calculation for our trade:So, those prices last week : We pay 125.5 for the 7300 call, we sell the 7350 call for 90.5, and sell the 7300 put for 33.5. Our cost therefore, is 1.5 our maximum reward is 50-1.5=48.5. We have theta on our side and Delta is miniscule but the spread that we own is in the money. Is the Santa rally on? The telly adverts are already annoying!

Now: 83.5, 50.5 and the put 23.5 gives us a modest 9.5 run to expiry of course, for fun

Trade 342 Time Spread? Calendar we say, but with a twist

Calendar time? A cheeky short Nov 7350 put at 40, BUY the Dec 7450 put 146 and SELL the Dec 7350 put 94.5. So we buy the December spread and pay for it almost fully by selling the November put, for a small debit of 11.5 We make serious coin so long as the FTSE stays moderately below or above 7350