That Was The Week, More War, More Madness, Does The Big Money Care?
War is good for business, unless you’re on the receiving end. With no checks and balances it’s hard to discount full on civil war in the US, as Trump is allegedly as popular as herpes. The rap sheet expands daily. The hardcore of supporters seem in denial about the chaos in the White House. They are the 29% yet with sufficient rigging, the mid term elections’ integrity may be lost. General election integrity in the US, may be lost forever. Rumblings about a wealth tax in the UK, people everywhere are seriously unhappy. How does this correlate with the FTSE? Who knows? Once there was a market that was not prey to the vagaries of a few old men. Once the money supply was not out of control. Actually it’s business as usual!
So, the young upstart economist Gary Stevenson who wants a wealth tax, explains that government debt tends to end up in the pockets of billionaires. The money supply has increased 40% in the last 10 years. America? Up 78% .The effect of this is that property is unaffordable for so many, hard assets have rocketed. Billionaire wealth has exploded. How often do we say the real economy is NOT the stock market? How often do we say this time it’s different, which it never is? So, we keep a weather eye on the nuts and bolts and one of those I look at is LVMH, the house of luxury. As a bellwether, it stood alone when Covid arrived, as it plummeted. Check the chart now https://uk.finance.yahoo.com/quote/MC.PA Classic downtrend lower highs etc. This is just for fun, remember. Bears are a stopped clock.
In The Inbox
https://masterinvestoruk.substack.com/?utm_source=substack&utm_medium=email Victor tells us what’s going on.
Fuller Treacy https://fullertreacymoney.substack.com/p/big-picture-long-term-global-outlook-3dd?utm_source=podcast-email&publication_id=1289696&post_id=206508070&utm_campaign=email-play-on-substack&utm_content=watch_now_button&r=1fbdnd&triedRedirect=true&utm_medium=email Eoin carries the torch as the esteemed Mr Fuller passed some time ago. Always a good resource.
Distraction Trades
ADA was $0.1767 now $0.1678
XRP was $1.1403 now $1.1089 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 nett 410, 1 losers 3 wins
UK Gilts Were £15.72 now £15.63 This is based on the Vanguard ETF. (VGOV) 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 $56.67 now $54.41. Closed out for $55.46 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. I’m now neutral to negative, but I made a few £££ on the way
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 was 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
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
Then:
2180, 1980.5(x2) Gives us 1781 Brutal, but we ignore the pain.
Now 8500 2006, 8700 1806.5 x2, gives us 1607 We need to roll into August expiry but the 8500 strike does not exist, so we’ll take a view in the week ( we could go with other strikes of course)
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.
Effectively ZERO. We run to expiry.
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!
July 10100 put 3.5 August 10200 74.5 10100 58 Give us a credit 13
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.
Now the prices give us 313.5, 132 x2, 22.5 = 72- 23.5= 48.5 PROFIT 200% We’d take that, but we run to expiry for the big bucks.
Trade474 August Cycle Coin Toss
It’s that time again when we want to try our luck in a short term gamma play. As we approach expiry the gamma (rate of change of Delta, explodes in the expiring series, relative to the next month). So we sell the August straddle and buy 3 July straddles,( in a sort of suicide pact! ) Now if the July expiry is at 10500 we are toast, if we’re at least 150 away from that in either direction we could have a nice win. So here’s how the numbers stack up. July 10500 straddle 62 and 54.5( call and put), dirt cheap! August straddle 156.5 and 164.5. So we have 321 and 116.5×3 = 349.5. Cost 28.5 This can win by a big move or a bigger increase in volatility in near monthly relative to the far month. I’m not optimistic, so we will turn this on its head.
We BUY the August straddle and sell 3 July straddles and bet on a 10500 expiry. It is a bet, as adjustment will be tricky.
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.