That Was The Week FTSE Smashed Through a MeltUp
So, while it’s easy to be dismissive about our tawdry little index, it seemed prudent to ask A.I. what the heck is going on. So, what the heck is going on? And here’s the response to asking if A.I. is doing this. The Verdict: AI is the primary catalyst for the FTSE 100 hitting 10,000+, but primarily as a counter-force. The index is rising because it offers what AI-driven markets lack: tangible assets (mines), physical infrastructure (power), and predictable dividends (banks/tobacco). However Gemini also sourced some views from brokers:
| Source | 2026 Outlook | Key Takeaway |
| UBS | Neutral/Bearish | Base case of 10,000; pessimistic scenario drops to 7,200. |
| AJ Bell | Bullish | Forecasts the index could reach 10,750 by year-end. |
| Morningstar | Optimistic | Sees a path toward 11,000 if global conditions stay supportive. |
| Hargreaves Lansdown | Cautions | Warns of “toppy” US valuations and potential “glitches” in the financial system. |
I’m not about to get all ‘world view-like’. However the rationale for the rampant FTSE buying seems to be as a hedge against the wobbly nature of A.I. I find it deeply troubling that millions of young people eager to enter the workforce will find their prospects severely limited by the march of technology. A.I is not about creating jobs, it’s about creating more wealth.
That’s Enough Philosophy!
We want to know the future, that is normal. But dealing with the uncertainty is our game, we just want to be rewarded for taking those risks. Currently Volatility is low (in my view crushed by relentless put sellers). So the reward for offering downside insurance for premiums did not stack up. But it hasn’t stacked up since FTSE went from 8260 in January 2025 to 10687 today. A rise unlike anything we see in a normal year. Here’s a nice historical resource: https://curvo.eu/backtest/en/market-index/ftse-100?currency=gbp In essence the FTSE does 6% a year with the wind behind it. 20%+ in a year is a massive outlier. The turgid nature is what appealed to this trader, it was never a one way bet. So what’s to do?
Might it be churlish to say ‘this time it’s different’? Because it really is, we are in the throes of the Industrial Revolution 2.0 and the future is not just unknowable it’s without precedent. Markets rise and fall but this one doesn’t fall, so who is selling when someone is buying? Do the covered call players who get their stock called away go back in at a higher price? I would like to know
In The Inbox
So last week there was nothing worthy of your attention but we have the usual invitation to Islington https://mailchi.mp/masterinvestor/hny-7510202?e=d8dfffc5d3 I recommend going to these things even if it’s just to hear luminaries like Jim Mellon. I’ll be there in April and would love to meet one of our readers.
Another webinar on Thursday from Larry et al, these are always good https://register.gotowebinar.com/register/5059966158141471837?source=larry&mc_cid=c5e6776fff&mc_eid=5f15d5ff5d
Distraction Trades
ADA was $0.2819 now$0.2833
XRP was $1.4654 now $1.4475 nothing to get excited about
DAX : 3 days no entry, 1 win 1 loss nett 110
UK Gilts Were £16.18 now £16.19 This is based on the Vanguard ETF.
Silver: Using Wisdom Tree Physical Silver(PHAG) was $71.15 now $75.12 OK- I got in and out and made 40p! March will see some action when reality meets the market we’re told
Legacy Trades to 454, Daring to Sell Calls
Trade 424 High Roller
PRECIS: We start from a July 2025 losing trade as below. Short calls are rarely a good idea.This is a ratio spread 8450/8650 calls
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.
Double Ouch! 1755.5 and 1557.5×2= 1359 Of course the FTSE’s up again so it’s to be expected. We’re only concerned with rolling to the next month until the market meets us.
Was: 1913, 1713.5x 2 gives us 1514. Given this is £10 a point that’s a hefty chunk of change so while this is an exercise in what NOT to do it’s also not a good idea.
Now: 1967,1767.5 x2= 1568 We will roll into March expiry during the week. This is, however deeply underwater.
A Glitch as futures prices created a debit where we would normally expect a small credit, thus we pay 7.5 to roll into March (Feb: 2170.5, 1970.5×2,Mar 2159,1961×2)
We now have debit of 1763 ( total income 392 )
Trade448, Jade Lizard Time? Feb expiry
Sell 10200 Call 122.5 and buy the 10250 Call 99.5. (Apologies this was incorrect previously) 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.
123.5 and 96=27.5, and the put is 31.5 gives us 59.
Now 218,179.5,= and 14 = 52.5 Best we can do is run to expiry where the short call spread will be worth 50 against us and we took in 63.5
The Call spread is 42.5, and the put 5.5 =48. The best we could do is to close out for 63.5-48 = 15.5 WIN! CLOSE OUT
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 !
This week: Feb 9700 put 27.5, March9850/9650 put spread 89.5 and 62= 27.5 We’re no longer(aside from 1.5 at entry) in credit
Feb 9700 put 12.5 March Put spread 63.5 and 45 =18.5 Credit 6+ opening premium 3 =9! Doesn’t look as if the Feb Put will ever be in trouble
Feb 9700 put 5, March Put spread is now 50.5-36.5= 14. So while this has made a few pence it’s not earth shatteringly good. We run to expiry
Now, the prices for the March put spread: 23.5 and 18= 5.5 WIN! Well it’s not a loss! CLOSE OUT
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.
10500 call 18.5 and 9250 put 12.5 = 31 Hmm not what we hoped for, we took in 27 but it’s still 3 weeks to go, yet.
40 !!!!! SERIOUSLY???? The 10500 call just destroyed us at 40! 9250 put 5.5
[ We could adjust, by moving the call up to 10550, cost 15, selling another put 10100 37.5, buy back the 9250 for 5.5.] We will track both. Risk now getting spicy.
10500 call is 31.5, the 9250 put 2 We run to expiry and hope it’s < 10527
HORRIBLE LOSER! 136 -27= 109 loss ( we will address this ) CLOSED OUT
Trade 451 Struggling to Pick a Strategy(Feb expiry)
We ladder or ratio into a butterfly. Of sorts. Say what? We buy a put ratio spread buying the 10200 put,118.5, selling 2 of the 10000puts 60.5×2. Then, we buy the 9800 put, 36.5, and sell 2 of the 9500puts 18.5×2. This gives us 2.5 and 0.5 = Credit 3 We stand to make a profit anywhere from 10,200- 9810 and risk at 9500. It’s zero cost low risk possible 200 max profit. So, we have no upside risk, modest profit potential. We cannot have upside risk. But we need some skin in the game. I foresee an accommodating market for the trade. I also have little idea where we go next. Positivity is much needed while all around are doing ok against your own judgement
Now 54, 27×2, 15.5, 8.5×2 Gives us minus 1.5 but Credit 3 to open -high finance.
Now 22, 10.5(x2), 6 and 3.5(x2) Gives us 0! We will let these all be abandoned( and avoid fees )
Tiny tiny WIN! This was really a big fat nothing but it didn’t cost us and gave us a tiny credit 3 CLOSED OUT
Trade452 Straddle, Anyone?
A snapshot of the FTSE options chain: https://www.ice.com/report/265 We see the 10,400 straddle and we want to sell the call and the put. The numbers from left to right, 83 is the price of the call, 0 is intra day volume. 5,810 is Open Interest (the number of lots in existence). Next, 10400 is our strike, 119 is the price for the Put, 0 volume, and 12 is Open Interest( or lack of interest in this case).
So we sell both and take in 83+119= 202, so we have risk at 10600 and 10200 It’s bold it’s risky it’s probably not a good idea but we may see how well taking the opposing position might transpire. Remember we can close out at any time so if we get a very slow day, theta might gift us 20 or so.
Yikes -spicy but now 81 and 63 Gives us 144 and we took in a Credit of 202, we’d take 58 profit but we run to expiry too. WIN!
NB This was closed out and had we run it to expiry it would clearly have lost 286-202= 84 CLOSED OUT
Trade 453 March Looms large
Time for an Iron Condor? It’s time to trade March, that is certain. You may recall an Iron Condor is a short strangle and a long strangle, or in other words, selling a call spread and a put spread, which are out-of-the-money. Call spread 10600 76 10650 59.5 gives us: 16.5 Put spread 10300 130 10250 115 gives us: 15.
Personally, I think the Credit from the Put spread is hopeless and I’d go for a naked 9650Put 36.5. Which, as you know, is a Jade Lizard! Let’s give both a shot. Max loss of the IC is 50-31.5=18.5
Our Jade Lizard gets spicy at 9600. Now 9650 put is 18 our credit was 16.5+ 36.5= 53, now 31+18= 49 ( We’re on the right side of things)
Now we have 191.5, 159.5 = 31 for the Call spread and 53.5, 48 = 5.5 total 36.5 a small loss
Trade 454 The Strangle Legacy From 450’s Loss
We had a disaster and incurred a loss of 109 -let’s try and get it back from Mr Market we sell March 10850 call, 65 and 10250 put, 48 gives us 113 What could go wrong? The revenge trade is always the right choice ( you do know I’m joking, right?) So we now have 2 losing trades that we want to repair. Can we stay in the market longer than it can stay irrational?
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.