That Was The Week China Saw Orange
We live in an era of knee-jerk trading. Thankfully there were low expectations of the World’s 2 super powers meeting. Somehow the markets feel ‘uncomfortable’ and while the basics are pretty solid, earnings are ok etc, it just feels off. So, there is actually a whole world of intuitive trading and ‘gut’ should be a passive guide too. FTSE has always been the stodgy senior citizen of the world’s markets, hence its attraction for options trading. Shocks are only helpful when you can get in after the event, but we have the added random element of a wall of US money. Sadly the US seems to be able to pick off the pick of our promising new companies for a song and launch them in the US for massive IPO profits. It keeps FTSE unexciting, but it’s predatory.
The irony of our political leaders facing a crisis is that the US should be having the crisis, not the UK. We think of Labour as the fairer party who may be lacking in the actual workings of running a country. Being PM is a vanity position for those who are masochistic in the extreme. OK the house you get is handy for central London but the money’s not great. Bumbling British politicians will always be my choice compared to the US glitz and madness. Let’s not go there with America’s choice of PM for the UK.
The Ethos of Optionsinvesting.co.uk
We recently had messages from one of our readers who had asked about availability of the trades on a Friday. There are sites that will do that but they charge big money and do not guarantee results. Trades made here cannot be published for profit, that would require licensing. As an industry outsider I do not possess the relevant qualifications too. I may have left that choice a little late. My trading journey is 100% genuine. Full of stupid decisions, poor judgement, excessive bias and incompetence. I don’t think I’m a complete idiot and certainly I’m no genius, but the site is proof of concept. Options when traded as strategies, can work very well when patience and education are front and centre. You can ‘trade’ anything on a spreadbet site within minutes of opening the account. You cannot do that with options.This is a more sober world. Thankfully.
Expiry -It’s always the Third Friday at 10.
This is without doubt the weirdest expiry, though I don’t often sit watching the ‘auction’. This is Yahoo UKXSP.L and it went bonkers. There was a gap and suddenly instead of a 15 minute delay it appeared to be live. There was not a massive candle at 10.10 as always seems to be printed after the 10.30 deadline(expiry plus the 15 m delay ). Anyway the number was 10227, down from last month by 3.5%. Praise be to the downside!
In The Inbox
This from Bill Poulos and the written word is always valuable https://www.prtradingresearch.com/simple-options-guide-82-sms-alt-8.php?t=7c8f59f65d074fffbd17ff0dc1834a3e&o=6&afid=everflow-1778929041-16-6-7c8f59f65d074fffbd17ff0dc1834a3e
There is a common thread among the options community and it is about spreading the knowledge. We like it.
Not for us, but 0DTE options are the new shiny thing and this is definitely worth a look: https://members.bigtrends.com/how-same-day-options-on-qqq-have-been-hitting-up-to-500-2/?inf_contact_key=956004af2ea86e6fd36a8ae2448c1bc89042a6429cc6d781f779b0d187b52794
As it’s from the stable of Price Hedley it’s always decent.
Distraction Trades
ADA was $0.2736 now $0.2450
XRP was $1.4260 now $1.4075 Nothing to get concerned about. I like this source https://coinmarketcap.com
DAX : 4 no entries, 1 WIN nett100
UK Gilts Were £15.61 now £15.32. This is based on the Vanguard ETF. Not the cheeriest outlook, yields in the short term may be worth a look, apparently. NB I thought I was buying this at £15.41 but paid £15.50. This is in my pension and the situation is, that funds take time to buy and sell. It’s not my idea of a level playing field but that’s the reality.
Silver: Using Wisdom Tree Physical Silver(PHAG) Was $72.92 . Couldn’t resist it! Went long at $71.31 and now it’s $69.58 After the massive 10% rise it crashed back down and hence my entry. Do not follow me this is not a huge position and luckily I have done well this year with Ag.
Legacy Trades(4 wins) and New Trade 466
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
Crazy time, as our strikes do not exist for June so we roll from 1914,1714=1514, to the new strikes up 50, 8500/8700: 1875.5,1678 =1480.5.
Our new position therefore is 1480.5 underwater and we have a debit of 33.5 So the running income is now 422-33.5= 388.5
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.
OK at expiry our long spread was worth 100, the Jun 10100 put was 140. It’s a pyrrhic victory and if we’d paid the 20 for the long spread, well we make 20. WIN!
Not recommended unless the vol skew makes sense.
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
At expiry: 10300-10227= 73 Minus 15 debit gives us 58 WIN!
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
Collect the Full Monty 21.5 Boring uninteresting tedious. Collecting money can be like that. WIN!
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…..
The May 10000 put goes out for zero, the long June spread is :157.5 -124= 33.5 our cost was 3. profit 30.5 WIN!
Trade 466 Shoot ME!
It’s so simple- we use the long spread from 465 and create a butterfly by selling the 9900/9800 spread for 98.5,78.5= 20. We carry forward the 3 debit
Now this is not only bulletproof but can still make 100 such is the beauty of options, we take a credit every month and sometimes we get the big win. Worst way we still have 17 credit and there is no margin used for a butterfly. In fact it’s a credit in margin.
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.