That Was The Week FTSE Rose Yet Again, Again
So, yet another vertiginous rise and not a hint of actual regular market action. This year we have so far seen 26 up days 15 down and not one of those downs was meaningful. However there are so many factors in play and we hope this weekend’s US action is limited. Everyone you speak to seems at a loss to explain FTSE‘s crazy train action given the macro picture. So, inflation, unemployment and the household woes count for nought. The American disease is firmly entrenched in buying stocks until valuations make as much sense as a Trump speech. Ouch!
However, some options stuff this week and looking at March expiries, there are many more calls than puts, and a lot of puts <the 10000 level. So it seems a lot of people have rolled up calls and a lot of people have sat on puts that will expire 1,000 points OTM.
In The Inbox
Cannot comment on this but we are so few, it might be worth taking a look -UK options traders are mostly mythical!
Larry’s weekly missive: https://www.optionstrategist.com/weekly-charts?mc_cid=b9f42ae9da&mc_eid=5f15d5ff5d
And of course the Investor show: https://forms.reg.buzz/masterinvestorshow-2026/foc?utm_source=Investor+Audience&utm_campaign=3e293ccc73-SO_ticket_promo_HH3_20200224_COPY_01&utm_medium=email&utm_term=0_bc664be0ba-3e293ccc73-48657581&mc_cid=3e293ccc73&mc_eid=d8dfffc5d3
In Other News
Taking advantage of tax breaks is vital for all of us who have money to trade and invest with and this was of interest about ISAs from https://pensioncraft.com I get free emails from this site but this chimed with me as I had a rotten ISA with one of the companies listed as being inflexible:
We can’t always make profits but when we do it’s annoying to have them taxed to death! We can only hope future governments do not take away these rare privileges. Look out for cash back as you can swap providers and cop a few hundred quid for free.
Distraction Trades
ADA was $0.2833 now $0.2632
XRP was $1.4475 now$ 1.2940 nothing to get concerned about ? BTC has been seeing some crazy moves.
DAX : 4 trades 1 break even 2 losers 1 win nett 60
UK Gilts Were £16.19 now £16.37 This is based on the Vanguard ETF. Gilts up stock market up? What’s wrong with this picture?
Silver: Using Wisdom Tree Physical Silver(PHAG) was $75.12 now $85.05 OK- I got in again at $79.77 March will see some action when reality meets the market we’re told.
Legacy Trades to 455,
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 )
O, me miserum! Irrumator! (look it up, it’s rude)
Now 2452.5, 2,253.5 x2= 2054.5 Remember we can run this for years! (We may have to)
Trade 453 March Loomed 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
Ugh- calls: 349.5 306.5 =43 puts 21.5,: 19.5=2 total:45 against our credit 31
(Jade Lizard calls: 43, put 8 ) Jade Lizard doing so much better in this relentless bull run
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?
10850 call 154.5 and 10250 put 19.5 = 174 We just cannot get a break but let’s stick with it.
Trade455 Puts, it has to be Puts,Let’s Go Postal
So, it seems that risk is irrelevant and this market is headed for 11000+ I am of course not making a prediction, just being flippant. However this is a ratio spread and the ratio is 3:1, we sell 3 of the lower strike and buy only 1 long 10600 44.5 10500 34 x3 Gives 57.5 credit We have some mitigation owning the 10600 put but risk is at 10466
( For fun we will ‘ lower our’ risk to 10100 buying 2 of the 10450 for 30, selling 4x the 10100 at 15 so this costs: Nothing)
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.