That Was The Week FTSE Crept Up again,Tesla Plummets
So, the much vaunted rift twixt Elon and Trump has caused some concerns. We know Trump can be spiteful and will target Tesla and Elon’s other endeavours, so nobody wins. Like most people, I often need to take a metaphorical step back in order to accept the fact that Trump is here again. What does that mean for FTSE, that is the only area of concern here. It all seems jolly enough, what could upset the apple cart aside from the global factors already causing more concern than we’d like? However ECB cut rates, HMRC was robbed ( the irony!) tariffs are on. The legend that is Dr. Martens boots, saw profits plummet 90% and share price rise 24%. Unbridled optimism or folly? We live in interesting times when buy the dip beats all metrics.
Again FTSE is on an expensive P/E of 18.35, when 2 standard deviations from the long term average is only 16.15. Yours truly finds it hard in light of this and the indicators for the US, to be bullish, but the price speaks for itself. Bias is unhelpful, in fact costly, where options are concerned. Of course people buy stocks to make money but they also like the process of hunting down companies that are good candidates.Bias? No. Diligence. In the same way we select options trades but should never have any kind of emotional ownership. When it’s wrong it’s wrong. Mostly the markets go up. The best way to counter any bias is to trade strangles or straddles, where you are equally weighted, bull and bear. But there’s so much more to explore.
In The Inbox
1.Maybe I should ignore this, but misery loves company! https://thepatientinvestor.com/index.php/2025/06/07/us-market-leading-indicators-3/
2.Some good stuff from the investment world: https://masterinvestoruk.substack.com/p/the-master-investor-podcast-with?utm_source=post-email-title&publication_id=2822697&post_id=165014526&utm_campaign=email-post-title&isFreemail=true&r=1fbdnd&triedRedirect=true&utm_medium=email
3.Then there’s podcasts from the TA community: https://mailchi.mp/technicalanalysts.com/sta-agm-papers-4965708?e=4e8dea4756
ADA was $0.6670 now $0.6676
XRP was $2.1402 now $2.1878 . All a bit uninteresting
DAX : 2 days no entries, 4 losers 1 win nett +20. Started the week with a win, then it got ugly!
UK Gilts Were £15.90 now £15.97 This is based on the Vanguard ETF, not a lot of love…
Legacy Trade 415,416 and Newbie 417
Trade415 Is The Optimism Justified?
We don’t mind being wrong, in fact many of the trades here are based on the premise of ‘not being right’. So here we take advantage of theta with a juiced up ratio 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
This has yet to show a profit this week the June 8650 call 176.5 The July 8650 call 248, the 8500 call 368 gives us minus 56.5 (against our credit 25) 31.5 loss
This week the jun 8650 call is 205.5 The July 8500/8650 long call spread 397.5, 270.5= 127.5, giving us a loss of 205.5-127.5= 78 Ouch!
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 )
8500 put 23.5, 8400 put 16.5, the 7800 put 5 gives us a credit of 2! As we paid 1.5 we are looking at a 33% profit. Take that, stock pickers!
Ugly and sad! 8500 put 9, 8400 put 6.5, 7800 put 2 Gives us a ha’penny. (NB we now have 70 up and only 41 down days this year to date)
Trade 417 Why Not Strangle the FTSE?
I do not speak metaphorically either! Given the random nature of the markets let’s go with a strangle with equal pricing. We can get premiums of 23.5 on either side by selling the 8950 call and the 8500 put. Thus we have risk at 8453 and 8997.We aim to keep the full 47. It’s not the best time given contraction in volatility but it’s hard to make a reasonable assessment of the unreasonable.( These are for June options with 20 days to expiry)
8500 put 9 and 8950 call 18 We could close this for a cost of 27 and take our 20 profit As always we run to expiry and maybe we get the full 100%
Trade 418 More Neutrality?
It’s time again for the crazy stuff, the boredom trades and the limited potential trade. It’s a ratio calendar straddle. (Yawn…… I hear you). We will buy the near month 8850 straddle calls 55, puts 67. July 8850 straddle calls 128.5, puts 116.5. All in gives us a penny credit when we buy 2 June straddles and sell 1 July straddle. The only way this works is if there’s a decent seized move, so it’s not looking promising. However we need to acknowledge that markets do occasionally drop when actuality hits the fan. This is when Deltas and Gamma work for us, while Theta snaps at our heels
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