That Was The Week The Madman Controlled the ‘Elevator’
I recall the analogy of the madman and the ‘elevator’ from the early 2000s. This week’s price action qualifies as FTSE defies Dax, with more ups and downs than the Pennines. So, Iran seems to be in control as TACO does it again. I am horrified that the orange one runs amok with deranged ramblings. Who thinks that is ok? America. WE have lost a great nation and ally. Oh wait, we do not get political here.
Wednesday saw FTSE rise over 200 points based on those ramblings. This is a departure from the studies and careful analysis expected. This is like schoolboy football. Directional trading is a case of hang on tight unless you are America. US markets seem to know no downside. Not even a dip to buy. New highs attract more money. FTSE may be a very different case. There are no Palantirs, Intels, or Apples here. We sell our promising companies… to America. If money is the goal the US must be the destination. It is counterintuitive to see a country run by a m*dman see so much upside, when compared other nations with similar leadership. Baffling.
In the Inbox
For those of us who try to make sense of TA, this for Tuesday https://mailchi.mp/technicalanalysts.com/sta-agm-papers-4969109?e=4e8dea4756
CME offers this, and you can ask ANY question -try it and let us know https://view.the.cmegroup.com/?vawpToken=2GRQS4HQC6AEDB6IZDFHKBMDGY.110054
Distraction Trades
ADA was $0.2480 now $0.2736
XRP was $1.3856 now $1.4260 Nothing to get concerned about. I like this source https://coinmarketcap.com
DAX : Again! 3 no entries 1 loser nett: -40 I have my suspicions the system is out of wack with current conditions
UK Gilts Were £15.52 now £15.61 This is based on the Vanguard ETF. Not the cheeriest outlook, yields in the short term may be worth a look, apparently.
Silver: Using Wisdom Tree Physical Silver(PHAG) Was $69.22 now $72.92 I previously closed out and made £9! Oh dear here endeth my run of Silver trades
Legacy Trades New Trade 463 A Tenfor
Trade 424 High Roller, This is a Trade Gone Wrong
PRECIS: We started 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 an old trade from July 2025 which is a loss of 1741 against the credits taken in, of 422
Now 1539 big yawn but that’s the point. This will run until it’s no longer in a loss.
1912, 1712.5(x2) gives us 1513
1771 1571.5×2 = 1372 Is this heading the right way?
Trade 462 Calendar or Something Else?
What if we could buy a cheap Put spread and make something happen with that? We could use the one we own from Trade 461 This may be nuts but…. we SELL a June 10100 put for 80, giving us risk at 10,000. This exploits something we may not have done before, but we have a month’s protection at 10400 giving a full 100 so if things get spicy(and I really hope they will) there will be some interesting possibilities. We learn by doing and if we don’t break stuff we’re not trying hard enough!
https://optioncreator.com/stvdj8f
Have fun with this,I’m not even sure if this strategy has a name but the chances of profit look good, and theta is our friend. Remember if the market does drop to 10400, we will collect 100 from the long spread with which we can buy some excellent protection or close out.
I say again this is a curious journey but now the long Put spread is 217, 166.5= 50.5 and the June put is 146. DON’T PANIC!
Now the spread is 195/135=60 the June Put, however is 124.5. In hindsight this may get ugly. Did I say that already?
289/204 =85 June Put 151 As expected things got more pricey! Expiry looms -watch this space.
Trade 463 A ‘Fly, Just to Play Safe
I note we have only 19 days to expiry what’s to do? Let’s go for a 10-1 Moonshot. We are going squeaky clean with a Butterfly.
We buy the 10300 put for 127.5. Then, sell 2 of the 10150 puts 85.5. Our lower wing of the ‘fly is the 10000 put at 58.5. So this gives us 127.5+58.5 -(85.5×2)= 15
The ten to one is the fact that we are buying for 15 and the max is the difference between the upper and mid strikes which is of course 150. This is bulletproof as we can only lose our 15 premium. But, we’re certainly in the ball park to get something of a return. I want to err on the side of caution. I think for too long the market has ignored the crazy in the US.
Now: 92.5, 51×2, 28.5 gives us 18.5 . Now that, is a comedic 23% profit
133.5, 62(x2), 27= 36.5. Close out for >100% profit? We need to micro manage this during the week and approaching expiry
Trade 464 Pulling in Modest Profits
So, 13 days to expiry. This is big theta country and with so much crazy right now we go with a very wide strangle. Boring and picking up pennies in front of a steamroller. We should, in our portfolio have a diverse mix and this thing looks Delta neutralish. That is making it non-directional. We sell both the 10750 call for 11 and the 9700 put for 10.5. Call me a simpleton as this lacks complexity, and I agree. However there are times when we need a ‘banker’. There’s a huge 1,000+ point range so it’s a low reward trade.
1.5 for the Call and 6.5 for the Put We are golden! And boring
Trade465 Rinse and Repeat ?
We sell May 10000 Put for 27 and BUY June 10100/10000 put spread costing us 151-121= 30 A bit annoying having to pay 3. However this could be worth 100. We could be in a bit of bother if the FTSE drops below 10000. Nothing to lose sleep over. Unless…..
Glossary:
There are two types of options: Puts, give you the right but not the obligation to sell the underlying asset . Calls give you the right, but not the obligation to buy the underlying asset.
When you sell those options, the opposite happens, with puts you get stock ‘put‘ to you at an unfavourable price (or not) and calls you get the stock you own taken, or ‘called’ away. If you don’t own the stock you need to stump up the cash, but in both cases with the FTSE index they are cash settled at £10 a point, so losses and gains are uncomplicated.
Please read the links below for a more comprehensive explanation in simple terms. Options are about mindset, only a modicum of intelligence required.
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.