384 W/e 27 Sept All Quiet?

That Was The Week FTSE Showed Indecision- Quelle Surprise

FTSE ended the week on a high and the S&P was hitting another all time high but moderate rise this week. We are told by a ‘think tank’ that growth in the UK is robust, but we all know we face headwinds in the form of taxation. So, it seems we will soon find out what horrors the Labour government have in mind. However nothing about this Labour government has the promise of those heady days of Tony Blair. Although we have none of the charisma and cachet of Blair’ s Cool Britannia era it’s ironic that Oasis are happy to kiss and make up. Perhaps we are hankering after those late 90s days. So, is it different this time ? Very! The tech races in quantum computing and AI are game changers and UK investment is not small, we’re told.

Much to Ponder Aside From The Coming Tech Revolution

Nassim Taleb features in a 20 min podcast that makes some good points https://www.bloomberg.com/news/audio/2024-09-27/bloomberg-talks-nassim-taleb-scott-patterson-podcast

Next up, should we be afraid? https://ir.theice.com/press/news-details/2024/ICE-Clear-Credit-Is-First-CDS-Clearing-House-to-Process-More-Than-1-Trillion-USD-Notional-Amount-in-One-Day/default.aspx

Private Equity and Private Credit are game changers and we may find ourselves bereft of the once assumed level playing field that options gives us. https://www.bloomberg.com/news/newsletters/2024-09-26/bloomberg-evening-briefing-citigroup-and-apollo-team-up-for-private-credit?cmpid=BBD092624_BIZ&utm_medium=email&utm_source=newsletter&utm_term=240926&utm_campaign=bloombergdaily

All of the above is worth taking note of but we are powerless to change how these behemoths affect us, we can only hope that the unregulated private sectors do not see fit to turn the market into a pinball machine. They clearly have the size to make fortunes and/or to wreck the global economy. Let’s not even mention the geopolitical landscape, or we’ll be getting hysterical. I like to think the good guys trade exchange regulated options, a more noble art. In fact so noble there are very few retail players these days, ironic as 70-80% of those CFD players lose.

A Quick Heads Up

http://www.econotimes.com/VIX-Signals-Potential-Market-Volatility-Spike-Sevens-Report-Warns-1688768

Vix watchers will note there was a blip up on Friday and on another arcane metric we now have 101 up days this year against 88 down, is it skewed? We used to have, typically 51% up days p.a.

Distraction Trades

ADA was $0.3535 now $0.4001

XRP was $0.5824 now $0.6154 Ripple still ahead of our preferred Cardano but some upward trajectory.

DAX 2 wins one loser one break even, 1 no entry. excellent Thursday and Friday trades +300 nett

UK Gilts were £16.99 now £16.86 Another painful week. The fund that I use, like actual gilts, pays dividends at around 3.8% so like all investments you sit placidly regretting them!

Legacy Trade 383 And All New Trade 384!

Trade 383 October Can Get Spicy And The Omens Are…. Oh Wait, We have No idea!

We had a lot of fun with the ludicrous 3×1. Let’s go again and try to keep the risk level out of harm’s way, though venturing in the murky depths can mean missing out on the sunlit uplands of juicy profits. Let’s see. Again we sell 3 puts and buy 1. We sell 3 of the 78000 puts for 15 and buy the 8100 put for 45.5. Where’s our risk? sort of 7500-ish. Now that’s a fair degree of comfort with not a lot of likelihood for success. And, let’s not forget it costs us a ha’penny and requires some margin. Remember a very competent, very large hedge fund got blown up with the 3×1 trades, but with calls

This week: 18 and 6.5×3 Just wait! ………….

Trade 384 A multi Leg Classic But Cheesy Trade

In actuality we have 14.2 trading days for the October expiry and things are looking a bit sleepy. We like the idea that FTSE may take a gentle glide down to the 8100-8200 area but of course prediction is silly. Looking at the chances of this, however, the open interest suggests this may be the landing area for expiry. Here’s the strikes and prices for a CALL butterfly.

8100 257.5 8200 170.5 8300 98.5 Remember we buy the wings, sell the body, which is the 8200 strike x2. Thus we have 356- 341 = 15. Expiry at 8200 would give us 100 so it’s not bad reward for a max risk 15