That Was The Week America Looked Silly Again, BTFD Rinse and Repeat
The US fair boycotted by several states, was symptomatic of the glorious leader’s lack of judgement. America celebrates her independence for the 250th year. 18th century Britain had to decide on the feasibility of conducting a war against guerrilla tactics, and against people with strong resolve. The ‘American’ people opposed a monarch who was perhaps otherwise occupied. I have yet to read on how the British people felt about America. We know people had highly variable experiences, fleeing poverty in Britain, only to be exploited abroad. Different time, and now the dictator is on the other side of the pond! We are once again at variance but A.I tells me war with the US is not likely. Other states, mainly to the East. may have a different idea.
So, again BTFD saw FTSE soaring like it was a January sale. The week’s low was on Wednesday 1st. Then the cash wave reached the market. Is it such a bargain? Relative to a stock like Tesla on a p/e of 340, it’s practically a free gift, assuming the buying continues. Assuming a lot of positives. We recently saw FTSE on an unimaginable p/e of 20 and now it’s 18. Overvalued they say, not expensive. As a permanent bear it will become ‘value’ when the p/e is in single digits. But then my own dogma which makes me risk averse to the downside has its own, downside. Curious that much of my reading recently has talked about how improvement only comes with adversity. Clearly I don’t fit the model, yet options work for me.
In The Inbox
An insightful piece about the US from a long running newsletter and trusted commentator. Reminded me of the old adage: Britains says ‘why?’ America says ‘why not’. And then, attributed to Winston Churchill ‘ Americans invariably do the right thing. After they’ve tried everything else.’ Enjoy this thoughtful piece https://fullertreacymoney.substack.com/p/the-usa-at-250?utm_source=substack&publication_id=1289696&post_id=204984914&utm_medium=email&utm_content=share&utm_campaign=email-share&triggerShare=true&isFreemail=true&r=1fbdnd&triedRedirect=true
Larry’s weekly missive and market commentary https://mailchi.mp/optionstrategist/the-option-strategist-weekly-updater-4865082?e=5f15d5ff5d
I lost the email this was from, but it was a profound statement ‘ People playing for pennies at moments in time usually lose out to those playing for dollars over time.’ Options anyone?
Distraction Trades
ADA was $0.1469 now $0.1767
XRP was $1.0571 now $1.1403 Crypto has not been convincing lately. I like this source https://coinmarketcap.com
DAX : Under review after poor record lately However, the new method produced 2 trades, 1 win 1 loser nett 450 Old method, the loser was a 100 win, but it missed the 500 win on Friday
UK Gilts Were £15.78 now £15.72 This is based on the Vanguard ETF. Not the worst outlook, yields in the short term may be worth a look, currently 4.78%
Silver: Using Wisdom Tree Physical Silver(PHAG) Went long at $71.31 and was $53.95 last week now $56.67 After the massive 10% rise it crashed back down and hence my entry. Do not follow me but if you have to own silver, this ETF is backed by Physical.
Legacy Trades and New Trade 473
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
Previously 1984,1786= 1588 underwater
Last, 1939.5, 1740.5= 1541.5 ( Currently rolling to July would give 1579.5 )
Last week: 1,884.5, 1,685×2 = 1,486 ( possible roll to July 1507.5 )
Was : 8500 1963.5, 8700 1764 x2= 1643 Looks like a roll might cost money
So, cost 1606.5 to close, buy to open for July 1640. A credit 33.5 ( Running income 422 )
8500 2035.5, 8700 1836.5(x2) gives us –1637.5
Ouch! Melt up alert.
2180, 1980.5(x2) Gives us 1781 Brutal, but we ignore the pain.
Trade 471 A New Month -Seasonality?
Ask AI- https://www.ecosia.org/ai-chat?q=july+stock+market+performance
It seems when July takes a dump it’s of Elephantine proportions! But typically it’s an up month. Should we pay much attention to the past?
I like to think there’s a disaster around every corner, like all good dramas! Let’s buy a cheap handsome looking put spread and pay for it by selling a put further out. Those strikes and prices: buy the 10100 put, 45, sell the 10000 put 32.5 and sell the 9700 put for 14. Gives us a tiny credit 1.5. Most likely it will go to nothing and we lose nothing. But… it can make 100
This week: 10100 23, 10000 17, 9700 8.5, negative 2.5 Now we can do another lot, what’s the problem with that?
10100 6, 1000 4.5 9700 2.5 Well it’s all gone Pete Tong! We run to expiry with no loss.
Trade 472 The Trade A.I. Hates
https://www.cmegroup.com/tools-information/quikstrike/options-calculator.html
The above link takes you to the calculator like this: 
Put sellers have had it their own way as the dup buyers seem to have bottomless pockets, so let’s have some put risk. We are selling the July 10100 put, we are selling the August 10100 put and buying the August 10200 put. It’s a calendar spread but our far month has an extra short put. Credit 5. Let’s do the maths: Delta over all is +0.34 – 28= +0.08 almost neutral. Gamma almost neutral, Vega -near month more spicy as expected, but here’s Theta: 1.68 in our favour. Risk around 10000.
However let’s run a parallel trade- the diagonal which is low risk but you can lose a fair chunk of premium. A diagonal is: sell an option in the near month, buy one of a different strike in the next month, so here(10100 July, 10200 Aug) it costs 95.5-23= 72.5. Some people trade these very successfully but for me you are chasing the market for your money back. We’ll run both and collect £££ or adjust
July puts 10100 6 August 10200 52.5, 10100 42 credit 3.5
The Diagonal Cost 72.5 now 46.5 Ouch!
Trade 473 Making Predictions
Especially about the future- not advisable.
However we are looking at a potential expiry of 10200-10600 according to my FTSE radar. We want safe, cheap and hopefully rewarding. We go with a wide call butterfly 10200 490.5, 10400 300 10600 133 Sell the body x2, and buy the wings. 490.5+133= 623.5, and the body that we sell 300×2, give us a very decent price of 23.5. This has max profit of 200 and max loss 23.5 It has a decent range in which we could be profitable. If it loses it costs nothing to abandon the whole thing, avoiding commissions.
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.