That Was The Week The Highs Went Lower
So, more of the orange madness and yet markets barely flinched. Again it seems TACO is the correct epithet, or is it an acronym? Or both? So, we still get no release of the Epstein Files. For the avoidance of doubt, the awful people obstructing this are protecting criminals. And, we all know whose name appears thousands of times. So with other lawsuits for treason, and fake elections making glacial progress, how seriously can we take the markets? Surely there will be a floodgate of ‘justice’, or are the dark figures in the background able to exert unassailable power? The UK equivalent would be the Post Office scandal, which chunters along while victims have not been fairly compensated. Woah! Politics. Enough already, back to the ‘knitting’.
Seeing the bigger picture we have reasonable data supporting the idea that everything’s peachy. We also have the prospect of American unrest escalating, and maybe other parts of the world with their issues. We can only trade and adjust accordingly, although we rarely show adjustments here given the shorter term nature of the trades. The brief is, after all ‘ a new trade each week’ .
Some Changes
Given a renewed interest in internet stuff, we have changed from Google to Ecosia as the search engine, hence the new FTSEVIX graphic. The reasons for this are twofold, https://www.ecosia.org has amazing green credentials and may be more Anglo friendly. The world seems to be gravitating away from US dominance in every facet of our lives. Political again, sorry. However this is a rabbit hole as are most things on the ‘net. AI may be giving us nuanced answers and there may be differences between American and European providers. Yours truly is swamped with financial punditry none of which has made trading any better. Youtube fans will know this story, and it’s hard to resist the clickbait headings such as ‘All Hell broke Loose’. No it hasn’t!
In The Inbox
iVolatility offers us insights and a couple of interesting looking trade ideas, including a Jade Lizard( short put short call spread) https://www.ivolatility.com/news/3116
Dear old Larry still doing the biz: https://www.optionstrategist.com/events/free-webinar-mcmillans-presents-festival-traders-online-6?mc_cid=fc1401331c&mc_eid=5f15d5ff5d
You’re invited and they are usually short enough to be watchable, and informative. And there’s this from the great man: https://www.optionstrategist.com/blog/2026/01/free-weekly-stock-market-commentary-1232026
Let’s Talk About Trades
So in recent times we have had a few losing trades, but we have only ever set out to educate. In addition they are always modest losses, sometimes a bitter pill, but they are the ‘rent on the shop’. I try to keep person bias out of the equation but we should always have a ‘weather eye’ on the dark side. I’ve seen puts go from 3 to 300 in short order. I’m reminded of the epic drop of 11.7% on October 8, 1998 We saw similar drops in 2008, and 2020 though often there are warning signs. In my own case I didn’t think Covid would be a pandemic, but who did? Louis Vuitton! Yes, LVMH warned, while everyone else was blasé. In fact I suffered about the same loss as them, being described as ‘resilient’.
The Knitting!
Back to trades on the blog, and the trade selection is no easier despite now hitting Trade 450 .That is almost 9 years in old money. The ethos is still the same, we teach by doing. Nobody is right all of the time, the key is being able to ride the stormy seas. We’re still here, we have a decent track record and yes, we bleat about the market, same as everyone else. But, we live in unprecedented times and need to get with the programme. To be in the loop means finding the loop in the first place. I and a great many of us are absolutely baffled by current market highs. Can they go higher? Yes. Is there a rationale for more buying? Some funds will buy exactly when a new high is attained. I admire their stoicism. I am a habitual bargain hunter, shoot me!
Distraction Trades- Including New Asset ‘Silver’
ADA was $0.3958 now $0.3602
XRP was $2.0601now $1.9233 it’s been $3.5 at its highest but how do we value a crypto?
DAX : 2 losers 2 no entries one win nett: 120 We are working on automating this.
UK Gilts Were £16.15 now £16.04 This is based on the Vanguard ETF.
Silver: Using Wisdom Tree Physical Silver(PHAG) was $80.93, now $91.87 Some massive moves as Comex tried to keep the price down. I of course cashed out at $86.64 not feeling the love.OK I did very well but running profits on what seems to be an absurd run up was too much for me. Good luck to all who stick it out
Legacy Trades to 450
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
Rolling to December gives us 53 This was the average from 19-21 Nov. So our cumulative credit from Aug now 319 or from Oct, 147.5. We are in debit of 737 ( 1,125 minus 931×2 )
Was : 8450 call 1207, 8650 calls 1007.5×2 now 808 –our next roll should see us take in 35 or more
Rolling gave us 33 but now the real horror ….. 8450c1479, 8650c 1281 x2 = 1083
In summary we have taken in 266 (legacy 147.5) and our rolling has given us 86 We’re a long way from home!
Was 8450call 1460 and 8650call 1265.5 x2= 2531 Gives us: 1071
Was 8450call 1521.5, 8650call 1322.5 (x2) gives us 1123.5
Ouch! 1684, 1484( x2)= 1284
Last week we rolled on Thursday of expiry week : Jan prices: 1795, 1595×2= 1395, Feb prices: 1812,1613.5×2= 1415 so, we sold the Feb position and bought back the Jan for Credit 20
In summary we have taken in 286 (legacy 167.5) and our rolling has given us 106 We’re a very long way from home!
This week 8450c 1689.5, 8650c1491.5 x2 = 1293 It’s possible this could run for a very long time and it eats margin, but the rolling Credits may well produce 10-20% p.a.
Trade448, Jade Lizard Time? Feb expiry
Buy 10200 Call 122.5 and sell the 10250 Call 99.5. Sell 9750 put 40.5. Tasty Trade aficionados will know that we sell the call spread and a naked put. Here we have more credit than the upside risk of 50, the width of the call spread. In fact the premium we take in is 63.5, we thus have risk only at 9686.5. So we don’t mind a 400 point dip, a rise but at best we’d want the market just below 10,200
Those prices: 159.5, 136.5, and 31 which gives us 23+31= 64. Our credit was 63.5 so….. we’re in with a shout
The call spread: 92.5, 70= 22.5 and 33.5 for the 9750 put so that gives us 56. We took in 63.5 and there’s 4 weeks to go.
Trade 449 It’s Gotta Be Puts, and A Calendar
Struggling to find trades with modest risk/reward, so what we have here is a February short (sold) 9700 put for 28, and a March spread that we buy 9850put 84, sell the 9650 put 57.5, so we pay 26.5 for the March put spread. Giving us a tiny 1.5 credit. We now have risk at about 9500 and no upside risk. We may live to regret this, after a year of ridiculous buying ( IMHO).
short Feb 9700 put 29.5 Long March put spread 95.5 and 63 =32.5 We’re in credit 3 !
Trade 450 Classic Index Trade ….Strangle
10500 call 13.5 9250 put 13.5 For no particular reason, we have equal premium on either side giving us nett credit 27. We have risk at 10527, and 9223 ( 3.8% to the upside and around 10% to the dark side ) Given the precarious nature of everything it seems we need that big 10% buffer zone on the put side.
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, give it a whirl. (AI gets things wrong, remember)
All opinions expressed here are not to be taken too seriously and all of the trades are for educational purposes only.