That Was The Week everything Was Peachy -Wasn’t It?
We understand the UK is growing more than other G7 countries. Well, that’s a comfort isn’t it? We also learn that unemployment is now 5% and UK borrowing hit its highest since Covid. As always, it’s obvious the economy is not the stock market. Quite why anyone imagines that the US Iran conflict is going to ‘get a deal’ sufficient to move the market nearly 3% is ludicrous. The effects have yet to be felt. I think we can trust the last price printed, and everything else is unhelpful. Trump’s unpredictability and the massive crime spree the administration is feeding from is nauseating and you have to think that at some point there will be payback. Hard to imagine any first world nation putting up with this for much longer.
Meanwhile, the tiny cosmos of options trading trundles on. We will come to other indicators in due course. Last week saw some decent wins but those trades all follow the same principle: what will you do when it goes wrong? We often live in our own bubble, but looking for trades for here and in my own portfolio takes me not just to the new month and near the money strikes. While it should not be an exercise in maths, it’s good to price up a number of strategies in any number of time periods. Here’s a sneaky tip- the further out you go in time, the wider the ‘viable’ spreads become.
On a dark subject, and then a lighter note:
A bit of harmless fun after the Global Money Supply shocker. Seems only 20 years ago the total sum of money in the world was $44trillion. Someone has a mattress that reaches the edge of space!
In The Inbox
On the subject of other indicators, our old friend Larry McMillan tells it like it is: https://mailchi.mp/optionstrategist/feature-article-put-call-ratios-near-extreme-lows?e=5f15d5ff5d
Buyers of expensive calls are enjoying this money printing frenzy and sovereign nations can pretty much do this forever. Grrrrrrr
Looking for a trade? You have to trade the US market https://mail.aol.com/d/folders/1/messages/AAHl7o58tvBg8FNIdIUJRyDk41d
It’s a shame we no longer have VFTSE it might be a handy instrument – I’ll have words with the exchange. Would you want a UK VIX?
Don’t forget this is always the go to source for macro stuff: https://www.forexfactory.com/calendar?week=may24.2026
Distraction Trades
ADA was $0.2450 now $0.2380
XRP was $1.4075 now $1.3248 Not sure about the crypto world, seems like another era now . I like this source https://coinmarketcap.com
DAX : 2 Wins, 3 no entries Nett:180
UK Gilts Were £15.32 now £15.60 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 $69.08 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. Near term gloom, long term boom?
Legacy Trades(4 wins) and New Trade 467
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
Was 1539 big yawn but that’s the point. This will run until it’s no longer in a loss.
then 1912, 1712.5(x2) gives us 1513
then 1771 1571.5×2 = 1372
Crazy time, as our strike( 8450) does 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
Now 1984,1786= 1588 underwater ( Currently rolling to July would give 1619.5 )
Trade 466 Shoot ME! It’s NOT a Butterfly
It’s so simple- we use the long spread(June 10100/10000 put 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.
Now: 48.5,37.5 and 29.5,23.5 =5 And……. it is a C O N D O R !!! Why? The ‘body’ is wider than a butterfly which simply uses the same strike 2x for the body. You know this
Trade467 What Does This Latest Rise Mean?
Looks like the 10000 level is easy pickings for Put sellers but as always we like to have something in the back pocket. We sell the 10000 put twice for 37.5. We buy the 10150 put 55.5. So we now have risk as 9850 which strike seems unassailable. We have a credit of 37.5 (x2)- 55.5=19.5. Ideally you’d sell puts when the volatility is high but it’s never that simple. Friday 15th May looked like the start of a bigger move down. Hard to be emotionally neutral these days
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.(I’m living proof)
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.