That Was The Week The Cash Piled In Again -Stuck Record Here?
We can ignore the chaos. We can ignore the rumours. But, we cannot ignore the earnings. So this week many companies in a variety of sectors boasted bumper profits. Against a backdrop of job losses, poverty and pessimism. Inequality is the buzzword and rightly so as the top 1% continue to reap the ‘rewards’ . Amazon is making a ton more from its web services and cloud, than from its delivery business. I hope working for AWS is not such a seemingly miserable grind as the main company. Unfair contracts abound in employment in 2026. Unions over the last half a century have become less relevant. So, will wages get back to pre-2000 levels whereby the boss made only 10x as much as the staff? Genie out of the bottle perhaps? Human society often finds a way to survive. However most of the choices involve violence.
Historically the market is entering a highly variable time of year. Big fund managers in the US are sunning(frying?) themselves in the Hamptons. Personally market chaos suits me as my options portfolio makes ££££ when the market wobbles. The converse is also true. These inexorable rises are bruising, but not terminal. We watch the market it’s ‘our world’ but for those I know who have investments many had no idea how the FTSE has been melting up for couple of years now. Again the earnings have made the P/E more moderate but still over valued. https://worldperatio.com/area/united-kingdom/
In The Inbox
It may be worth subscribing to Mr Treacy’s Substack, he’s a smart cookie. The points he raises are worth noting. The surge in bond yields and the wild ride with tech continues.
More freebies from these guys who do some bite sized emails https://www.wisealpha.com
While I do have way too many subscriptions and solicitations I still find useful and interesting content. My spam folder now only contains obvious junk.
Here’s a podcast I have yet to catch up with, but another excellent resource: https://www.globalcapital.com/article/2go7zzb1djw20nelu9wqo/podcasts/globalcapital-podcast/the-bully-of-the-curve
Distraction Trades
ADA was $0.1622, now $0.1723
XRP was $1.0902 now $1.0624 Crypto -it’s a mystery! I like this source https://coinmarketcap.com
DAX : Under review after poor record lately. New method but in flux currently 2 WINS 3 No entries nett 300
UK Gilts Were £15.43 now £15.41 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) last week $53.51 now $52.08 After the massive 10% rise it crashed back down and hence my previous entries. 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. Not on board yet.
Legacy Trades, Expiry and New Trade 477
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)
Rolling on Thursday meant going lower to 8400/8600 which gave us 17450 against the cost of closing out 16520.5 = 930, running total of income 930+422 = 1352
Still a horror show but the plan is to illustrate the ‘sunk cost fallacy’. It’s always better to close out losing trades, but we can run things to the end of days
Now 8400 2305.5 8600 2106.5×2 = 1907.5 – Uglier than the White House alterations!
8400 2431.5 8600 2,232.5×2 = 2033.5 Yikes!
Trade 475 New Expiry Cycle
A wide bodied butterfly of puts – why not? We fancy having a wide profit area in our August trade long 10600 put 165.5, short x3 10300 put 69.5, long x2 10150 put 46.5. Gives us a net cost of 50 with the trade in profit down to 10200-ish. We’re toast if the buying frenzy carries on, so can we mitigate costs? Let’s sell a 10100 put for 41. Now our cost is reduced but we have risk <10100 Our risk is limited to 9 to the upside. So we don’t mind losing 9 to be rewarded up to 300. It would be nice to say X+Y=Z where Z is the expected market range with a bias to the downside. but we have zero guidance currently. Hand on heart, this is highly speculative. You could just sell a 10100 put! (Don’t be THAT guy )
Put Butterfly 110.5, 47.5, 33. Short puts [47.5×3= 142.5] Long Puts [110.5+33×2= 176.5] Gives us 34 Our semi-naked short put 29.5 We now have credit 4.5 (we paid 9)
I’d do this again for the princely sum of 4.5
10600 51, 10300 20 x3, 10150 14 x2, 10100 12.5 =6.5 ( Naked10100 short put knocks it out of the park, grrr )
Trade 476 Keep It Simple, Stupid
Sometimes it pays to do the obvious and so here’s a strangle, selling the 11000 call and selling the 10300 put Here’s the numbers: 38 and 47.5.
The Greeks: Delta -0.03, Gamma 0.0004 but the biggie…. Theta 1.6557+ 2.2164= 3.8721 Looks sweet to me! (Ok it’s boring)
Good grief. I can not claim any kudos for this, oh wait…. 11000 call 51, 10300 put 20 gives us 85.5-71=14.5 We’re in credit
Trade 477 Calendar Time, Some Risk, Much Hope.
AI hates this trade and it will come undone at some point. I hope we can do a decent trade repair if it goes belly up. Winning is not educational. Experience is good pain. Let’s try what we like! Using the immutable truth of greater time decay as you get nearer to expiry we sell near month and buy far month. We sell August 10500 put for 36. September, we buy 10650 put for 115.5 and sell the 10500 put for 82. Let’s do the numbers 36+82 from the puts we sell: 118. We pay for the long 10650 put 115.5. Gives us a tiny credit of 2.5 We’d be ok with the FTSE at 10350 as we have some wiggle room. Now, bask in the sunshine for the next 3 weeks, come back and collect ££££. We don’t know the future of course.
https://www.cmegroup.com/tools-information/quikstrike/options-calculator.html
Theta >2, wide range of possibility of profit.
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.