That Was The Week Elon Made The News, Bonds, Korea Wobbled.
So, Elon’s bonkers flying car stunned us, while his blatant attempts to buy the election for the doomed Trump caused much anger. Anyone reading US election news will doubtless be horrified that a trillionaire can buy votes. Quite why he wants Trump to stay must surely be indicative of some very unpleasant things under the hood. Republicans are busy shooting themselves in the foot but that means nothing. I confess to losing my affinity with America many years ago, when the rigged election of 2000 installed a man not fit for the job. Logic would dictate you’d vote for the most capable people, but not in America. Headwinds include debt and division in the World’s largest economy. Tech, and A.I are having wobbles, Korea being a ‘tech bro’ too. Bonds have to attract the big money and A.I. funding is a competitor for those billions.
FTSE trundles along and our little island economy somehow manages to provide almost enough wealth. California is testing a 5% billionaire tax as wealth inequality is a real issue. Allegedly Elon minted 1440 millionaires this last week as their stock options came good. I can only imagine that the vast sums in the hands of individuals will have bad outcomes. We are comfortable with things being ‘ a bit rubbish’ in the UK. Long may that last. Ok, back to options and a little about margin.
Options Stuff That’s Good To Know
I think we are in the age of trading platforms indicating how much margin we are using. What is margin? It’s the amount of cash you need in the account to cover your short positions. when you buy options you do not use margin. Selling options attracts margin. FTSE options should roughly attract £5,000 per lot when sold. Now it makes sense as the option you sold for 20( £200 )can quite quickly realise a loss of 300 (£3000). Sounds a bit brutal, but let’s say every month you sell a put for £200 each month. That’s £2,400 a year on a deposit of £5,000. Many options players just sell puts and you might expect to win 9-10 times a year. Pulling in 40% a year is the dream. But is it a reality? You decide. Call buyers may do even better with no margin worries. Just a thought.
In The Inbox
Larry’s missive https://mailchi.mp/optionstrategist/the-option-strategist-weekly-updater-4866186?e=5f15d5ff5d
It’s a long way off but it’s always a good show: https://forms.reg.buzz/masterinvestorshow-2027?mc_cid=4ea2f788b0&mc_eid=d8dfffc5d3
This group has little support but seem to have ok content: https://www.meetup.com/london-options-trading/
Distraction Trades
ADA was $0.2230 now $0.2081 more downside
XRP was $1.3068 now $1.2802 Crypto -it’s a mystery! I like this source https://coinmarketcap.com
DAX : Bonkers week 550 nett 3 wins 2 no entries. I think this could be automated as it’s far too boring for a human.
UK Gilts Were £15.20 now £15.22 This is based on the Vanguard ETF. (VGOV) A rocky week . Remember this ETF has a yield of 4.61%
Silver: Using Wisdom Tree Physical Silver(PHAG) was $52.24 now $49.19 All over the place, again this week. It’s either going to be $40 or $100 I don’t know which!
Legacy Trade 424, 487,8 and New Trade 489
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)
Previously 8400 call 2266.5 8600 call 2067.5×2 = 1868.5
Then 8400 call 2308.5 8600 call 2109 = 1909.5
Then 2070.5, 1871(x2) = 1671.5 Position improving
Was 2164, 1964×2 = 1764 annoying and we need to roll soon, currently 2170.5, 1972(x2)= 1774.5
Ouch! We got slammed, rolling meant we took in a miserly credit of 10 [ total credit now 432] But the horror show got ugly: 2492 and 2293(x2) gives us: 2094
This week: 8400 call 2272 8600 call 2073.5 x2 Gives us: 1875
Trade 487 Nothing Make sense – November Expiry cycle Beckons
With only one week, or 5 trading days in October, we look at November and this means the US Mid Terms chaos may ensue. Let’s place a simple put ratio spread, so we’re not taking a full naked put position 10200 71.5 9900 37.5 (x2) credit 3.5 Max profit 300 risk at 9600. This is a recurrent theme but frankly these trades have done well over decades for this idiot. Remember the markets will see wild swings as events unfold with certain ‘World leaders’
10200 Put is 27.5 and the 9900 Put 15.5 x2 Gives us -3.5 We now run this to expiry we had 5 weeks to go.
10200 put 53.5 and the 9900 put 29×2= -4.5 So, Volatility is picking up
Trade 488, We Can Use Trade 484
So we have the long Put spread 10400/10250 42.5 and 30.5 Can we use this? We can sell another 10250 put for 30.5. We can sell the 10400 put for 42.5 and buy the December 10400/10250 spread for 80-62=18.
A) sell 10250 put gives us Nov10400 84, Nov 10250 59.5×2= -25
B) Dec spread 10400put 132 10250put 102 =30 Nov 10250put 59.5 gives us -29.5
Trade 489 Is This For Real?
Call prices seem to make no sense to me 
We are going to buy one 10950 call and sell 2x 11000 calls. As shown, the prices are 51 and 39×2, which gives us a credit of 27. We have risk at the unlikely level of 11050+27 = 11077
Now nothing is impossible and a tidal wave of cash may flee the US before November expiry on 20th. On the other hand it’s a gift of 27!
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.