344W/e24Nov Thanksgiving Lull

That Was The Week Nothing Happened!

Ok so it was Thanksgiving in the US which meant pretty much FTSE and EU markets ground to a halt. The chart shows a 40 point range and as puts are so cheap, yours truly was looking to buy some. Occasionally this guy turns up on YouTube https://youtu.be/Mud6LDdXu4M?si=dLe4MMWb_fe8Jmnk

I think he has done these doom scenarios before, but the comments are fun. However, if Cramer ( Mad Money- Bear Sterns and Leman Brothers are rock solid) says it’s all fine, they say it’s a contrarian indicator! How is he still around?

We had Black Friday, and the autumn statement from that guy with the tricky surname. Apparently it’s smoke and mirrors and the important measure, the low income tax threshold remains at £12,570 per year. My own back of a cigarette packet told me that ‘when I were a lad’ beer was just under a shilling, and there were twenty shillings to the pound. A fair wage was about £20 a week, or 400 pints of beer. In the city this week a regular haunt charges £7.45 for a pint, and the ‘ average’ wage is about a lofty £682.00 a week or …… 91.5 pints a week. We live in a skewed world compared to our antecedents.

One more thing, and NO this is not any kind of prediction, as I’m worse than Cramer:

Naked Sellers Destroyed (5 years ago)
On November 15, 2018, OptionSellers.com notified its investors in an email entitled “Catastrophic Loss Event” that it not only lost all their money, but that they would also owe money to Intl FC Stone for margin calls. Don’t be those naked option seller people.

Clever Stuff

If the epithet  ‘ quant ‘ makes you nervous, welcome to my world. In a heated debate on a well known smug trader site, the phrases ‘Sticky strike’ and ‘sticky delta’ cropped up. http://deltaquants.com/volatility-sticky-strike-vs-sticky-delta

So what does it mean? I don’t think we need to worry! We can trade fine with the Greeks until we trade in 100+ lots. However, it’s not all lofty terms and equations, and the site has a simple calculator: http://www.deltaquants.com/calc-test  It’s also got cute looking graphs, enjoy!

Distraction Trades

ADA  was   $0.3603  now $0.3898 Bit of a blip up

XRP  was   $0.60772  now $0.61899  Another rise after recent ups and downs

DAX  2 no entries, 1 loser -30, 1 break even+30, 1 win+50. At £1,000 a point it’s  good outcome!

UK Gilts were  £16.66  Now…… £16.38 What does this mean, who knows? It means it’s rubbish! Seriously, no idea, we remain long. You all know I hate traditional ‘investments’.

Legacy Trades

Trade 343, December, The New Expiry Month

As we inherit the long put spread Dec 7450/7350, from trade 342 we could close out or do something more interesting. So, we can sell another 7350 put for 31.5  on its own or as a short spread 7350/7250, as we can buy the 7250 put for 19. So we’d have either a put ratio spread, or the latter, a butterfly with zero risk.

How did that pan out? Our prices 7450- 41   7350-  20   7250-  11   So,  our choices, close out the put ratio spread for 1 giving us 32.5 – trade 342 only gave us a tiny profit of 12.5  so we can make a quick 20  or carry on. The butterfly gave us a credit of another 12.5, but we run it as it’s currently worth only 12 and it has zero risk.

Trade 344 Magnetic Strikes ( That’s my idea of Sticky!)

So in lean times we need to find something that is cheap and will hopefully keep us out of mischief, its a long Dec put spread 7450/7350  41-20= 21 and there are many ways to help pay for it, but we know thing are out of wack with puts trading at volatility in single digits. Let’s sell a strangle, yes it’s naked but with mitigation always from the side not under threat. We sell 7250 put for 11 and 7700 call for 11.5. Credit 1.5

So our downside risk is at 7150 but on the upside it’s still 7700 unless we get creative with our long put

For those new to options:




Contact: [email protected] If there is anything you’d like help with, we all started somewhere and yes, it can be baffling.