That Was The Week The World Got a Little Worse
US bond yields hit highs as the 30yr is now over 5%. That’s a lot of cash to find to finance money you’ve squandered. Here’s the link:https://www.bloomberg.com/markets/rates-bonds/government-bonds/us
However, it’s looking ugly for the UK too. The pursuit of growth has a cost and government bond holders are now sitting on much depleted assets. So perhaps this explains the love for the dreary FTSE. Good traders trade all market conditions but for yours truly, cynicism is the unexpected item in the bagging area. Bias should have no place so we try to show trades with no particular view other than making a profit. The key reason for the doom philosophy is this: https://www.youtube.com/shorts/_S_DWLNKPFU
Sometimes it pays to sit on your hands, while we continue selecting trades only for this site, to keep the educational ethos going.
In The Inbox
A nice freebie, charts from the esteemed Colin Twiggs. I have been following the charts from him for many years. Recommended.
https://www.incrediblecharts.com
Distraction Trades
ADA was $0.7613 now$0.7583
XRP was $2.3491now $2.3509 (Bitcoin is making new highs, so hold on )
DAX : 2 days no entries, 4 wins 1 loser +300
UK Gilts Were £15.95 now £15.80 This is based on the Vanguard ETF, not a lot of love…
Legacy Trade 415 and Newbie 416
Trade415 Is The Optimism Justified?
We don’t mind being wrong, in fact many of the trade here are based on the premise of ‘not being right’. So here we take advantage of theta with a juiced up ration calendar spread. We sell the June 8650 call for 132, and we buy the July 8500 call for 294.5, and sell the 8650 for 187.5 call giving us risk at 8800. Thus we have 132+187.5= 319.5, minus 294.5 =25 Credit Logic of the trade -we can be right up to 8775 and below. We are selling 2 options and buying one, so a lot of time decay working for us. There is of course the strong possibility of FTSE going ‘postal’ again and hitting new highs. We will have opportunities along the way to close out.
Jun 8650 call 162 July 8500 call 335.5, July 8650 call 225.5 gives us a grand total of minus 52. Remember we took in a credit of 25. This trade needs time to mellow
Trade 416 We Go Cheap
We want to own some puts but don’t want to pay in case we’re totally wrong, so here we buy a put spread and sell a very much further out put to help pay for it.Thus we have long 8500 put 61.5, short 8400 put 46.5 and short the 7800 put 13.5. At expiry if the index is near 8500 we will take a view and a profit. The spread costs a measly 15 so with the credit from selling the 7800 put we pay 1.5 for this, and relax. We have risk at 7700 but in this market the frenzy of buying the dip is forever at play. (The recent low was around 7500 )
For those new to options:
https://optionsinvesting.co.uk/special-edition-how-options-work-1/
https://optionsinvesting.co.uk/special-edition-how-options-work-2/
https://optionsinvesting.co.uk/how-options-work-page-3/
Contact: surreyhantstraders@gmail.com If there is anything you’d like help with, we all started somewhere and yes, it can be baffling. There are no stupid questions
