That Was The Week Jack Smith Exposed the Moral Bankruptcy of Trump’s Enablers
We watched in delight as globally respected truth seeker Jack Smith, special counsel delivered a tsunami of truth as the far right looked like fools. So, Trumpers thought they could trip up Jack Smith. They were wrong, spectacularly wrong. We are not fools we know Trump’s litany of crimes, it’s actually hard to keep up, as it’s relentless. However, America is the driver of the global economy. We need to pay attention as events unfold and while earnings are good, political upheavals can turn the stock market red. In a big way. I have no insights into politics but it may be time to tuck away some long puts. Remember the film, the Big Short. Lies can topple markets the same as political upheavals, we currently have both.
However little Britain is just a small bunch of islands with almost zero influence on the global stage, but we do stand for integrity. I recall how America’s subprime mortgages battered us. The 2000 dot com crash also crushed our stock market. We must pay attention. And options empower us. We can trade the ups, the downs AND the sideways. So, the long only folk watch their portfolio plummet. So, keep the faith, they say, time will be your ally. We are traders and our timeline is not 5-10 years. Motley Fool (remember them) said it’s time not timing, which works best. So, I took that on board in 1999 and watched the next 3 years decimate my portfolio. I am thus a cynic and it’s my experience. Most people have done well. Options saved me.
In The Inbox
Not options but very good reading. Some of us have tried A.I. with options trading, to date it has not been helpful, just ‘supportive’.
https://www.mauldineconomics.com/global-macro-update/a-different-kind-of-bank-run
Comments welcome from any AI users, surryehantstraders@gmail.com
Larry’s back! https://mailchi.mp/optionstrategist/the-option-strategist-weekly-updater-4866005?e=5f15d5ff5d
Are options predictive? Is Vix the canary in the coal mine? We like to think so.
Distraction Trades
ADA was $0.2560 now $0.2452 Wild but positive swings this week.
XRP was $1.5455 now$1.4836 Crypto -it’s a mystery! I like this source https://coinmarketcap.com
DAX : 4 no entries, 1 WIN 200 nett To its credit we waste no time at the screen
UK Gilts Were £15.16 now £15.20 This is based on the Vanguard ETF. (VGOV) The sheer panic instilled in us is not justified. Remember this ETF has a yield of 4.61%
Silver: Using Wisdom Tree Physical Silver(PHAG) was $58.37 $54.75 Good for you if you climbed on board at $52. Do not follow me but if you have to own silver, this ETF is backed by Physical. I’m on the sidelines as alarmists tell us it’s going to anywhere between $20 and $100.
Legacy Trade 424, 484,5 and New Trade 486
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 was a loss of 1741 against the credits taken in, of 422
(Rolling credit as of Sept2026 now 1408)
Was 8400call 2266.5 8600 call 2067.5×2 = 1868.5
Last week 8400 call 2308.5 8600 call 2109 = 1909.5
Now 20270.5, 1871(x2) = 1671.5 Position improving
Trade 484 Tried and Tested Formula
October options are upon us. What to do?
Wash, rinse and repeat let’s do that calendar ‘ratio’ spread using Puts. We sell: Oct 10250 put 43 We buy: Nov 10400put 126, we sell the Nov 10250 put which is 94.5.
So we have a long PUT spread 10400 -10250, and an October put that we sold at 10250. Credit 10.5 Risk <10200 Max reward, 160 no upside risk.
Oct 10250 Put is now 21.5 November 10400 Put 97.5, short 10250 Put 71.5 =4.5 Credit!
10250 all PUTS 52.5 Nov 10400 175.5, 10250 128.5 Gives us minus 5.5 No panic we were paid 10.5 to enter the trade
Trade 485 Are We Subject to Octoberphobia?
In the spirit of Hallowe’en , we’re having a pitchfork! Here’s the trade:
1.Take the straddle, the at-the-money call and put.
2. We use 10700 strikes, and then subtract the value of the straddle (120.5 and 107.5) this takes us roughly down to 10500 level. Here, the Call is 262.5 and the Put 50.
3.We sell 1 call and 3 puts.
With us so far? This has taken in 262.5 and 50×3= 412.5 We now have a problem if the FTSE hits 10900-ish, we land the big prize at 10500, we have a problem at 10350-ish.
For fun we compare the strangle at our risk levels 10900, the call is 36 and the10350 put 29.5. So our pitchfork can make up to 412.5 the strangle can only make 65.5 Which is better?
Pitchfork gives us 103.5 for the Call and 130.5 (x3) for the Puts Gives us 494 OUCH!
Strangle? 6.5 and 75 =81.5 Ouch! But not as bad as the pitchfork OUCH!
Please note: The Pitchfork is best placed when the straddle is at least 300 in a higher volatility environment.
Trade 486 Playing Safe
So, in this peculiar environment we need some safety. I object to paying to trade but sometimes it makes sense. So,I propose a Put butterfly with the following strikes 10500,10350,10200 This makes money anywhere between 10470 and 10230 130.5, 75(x2), 44. Costing 25.5 ( We could sell a 10000 put for 22.5 to help pay for it) I have low confidence in any trade due to my perceived implosion in slow motion of the US.
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.