That Was The Week Buy the F’ing Dip Slapped Down the Bears
Traders seemed to be in high spirits or at least drinking spirits! We were busy making plans for downside protection based on the predictably awful budget. However the OBR ‘leak’ a well known political stunt to lessen shocks, seemed to work. Gold and silver got more love. Yours truly had a good run in and out of silver but missed the latest buy. In fact silver had an incredible week, up 9.3% . Being a cheapskate, silver has greater appeal but trying to time buying and selling is seemingly pot luck. Silver has allegedly more demand than supply. Gold is a store of wealth and mostly used for jewellery for that purpose. We expect to have another bite of the cherry in due course. Meanwhile I will content myself with 19% profit. I should put that into perspective, I bought and held for years when it was $28.
A sobering thought from this bear: We now have FTSE on 140 up days and 90 down. The norms of the past, a bias of 1-2% Up days per year. Now we have 60% up, and no prizes for the down days percentage. Given 250 trading days a year it would be completely normal to see the entire rest of the year comprised of down days. However the Santa rally may well see the index hitting new, if ridiculous, heights. All in my opinion, with a bias and a basis in historical data. Here’s the nosebleed P/E https://worldperatio.com/area/united-kingdom/
In The Inbox
Confirmation bias? This was flagged up after reading about an insane investment in Zips……….. a car wash company
https://youtu.be/SrlZTaDCdTQ?si=su3cf7ypA6lv4lVn
This from there right wing John Mauldin’s team: https://youtu.be/KesJ0Y6CEB4?si=VdZLA2vIyerS_AyM
They do not point to a happy ending but then John Mauldin’s mantra: it’s the ‘muddle through’ economy. View at your peril!
Distraction Trades
ADA was $0.3984 $0.4181 ( I closed out above this level long ago)
XRP was $1.9038 now $2.2076 So, our chosen Cryptos are unloved again .
DAX : 4 trades One break even (+40) 3 Wins nett 270, still missed the epic moves
UK Gilts Were £15.95 now £16.11 This is based on the Vanguard ETF. Surpassingly robust considering, the budget did not do any damage
Legacy Trades plus new trade 443
Trade 424 High Roller
PRECIS: We start from a losing trade as below. Short calls are rarely a good idea.This is a ratio spread 8450/8650 calls
Last week: 8450call 1226 8650call 1027.5 x2 gives us 829 (against our credit 266 or as legacy147.5 )
Was 8450 call 1249.5 8650call 1050.5 x2 gives us: 851.5 -Expect a roll to December for credit ± 38
Rolling to December gives us 53 This was the average from 19-21 Nov. So our cumulative credit from Oct now 319 Or from August, 147.5. We are in debit of 737 ( 1,125 minus 931×2 )
Now 8450 1297 and 8650 1098.5 x2 gives us -900 At least there’s another all due soon
Trade 442 We Use 440’s Win For Further Credit
So we arrive at the happy position of owning a December 9500/9400 put spread worth 29.5. (125.5- 96).
Our possibilities: Keep the spread and run it to expiry for max 100. (a)
Sell the 9500 put for 125.5 and buy a January 9500/9400 put spread( 166.5-135.5= 31) to protect the now naked 9400 put. Credit: 125.5-31= 94.5
Or…. We sell another Dec 9400 put for 96. This now gives us risk at 9300, but we have juicy credit
Now 9500 put 34 9400 put 23.5 So had we gone with (a) we’d be disappointed, but (b) Credit 94.5 gave us Jan put spread: 9500 67, 9400 52 =15, short December 9400 put 23.5
(c) Credit 96, the put ratio spread now gives us a debit 13
Trade 443. Cannot Find A Put To Sell…….
Ok so I need to set aside my personal bias and support the long side. We are buying a ladder, selling more calls than we buy.
December prices: buy 9800 call 72.5, sell 9900 call 37, sell 9950 call 25.5 . Cost therefore: 10 How safe is this? Keen eyed readers will see there’s a long spread and an extra short call giving us risk at 9950+100= 10050.
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
All opinions expressed here are not to be taken too seriously and all of the trades are for educational purposes only.