That Was The Week The US Spoke, Markets Lost Their Minds
I hope the week’s ups and downs were to the benefit of our readers. Our quirky little FTSE is less prone to such gyrations. We have mostly traditional stocks, banks, miners, utilities, retail and a partridge in a pear tree. So, what happened? America woke up as the experiment of installing a non-politician has not gone well. Again. To paraphrase Winston Churchill ” Americans invariably do the right thing, after they’ve tried everything else”. Somewhat patronising but the definition of madness is doing the same thing again and expecting a different outcome. As an outside observer, and having some knowledge of the orange one, I expected the worst. Expectations exceeded.
Ironically, non farm payrolls came in +165K https://www.forexfactory.com/calendar#detail=146914 Well beyond forecasts. A.I. continues to divide opinions and data centres being wildly unpopular may affect Democrats’ policies. Trump is still president of course and he can rampage around blaming everyone as usual. Republicans who have been ‘less than model citizens’ are getting lawyers prior to the expected investigations. I think quite a few will be exposed for dirty deeds. Gerrymandering and removing polling stations may be the mildest of their activities. Justice delayed is justice denied.
Politics aside the FTSE is not awful according to the P/E ratio https://worldperatio.com/area/united-kingdom/
In The Inbox
Dear old Larry invites us to a multi day event https://www.metastock.com/offer/event?whc=traders-conference&pc=eq-mcmillan
Rather a spicy opinion. Kick out the bums, indeed! https://www.mauldineconomics.com/global-macro-update/throw-the-bums-out?anchor=comments&ajs_uid=cio_88b50d048e37cfe007
More relevant to the UK https://email.ipe.com/cr/AQju8Q8QlvmQARjXhuqvATDRkOwQ2fTc_ArTjPJPzZJSnNlX208UOI7D8kSZS-3jDHZ_15A
Distraction Trades
ADA was $0.1931 now $0.1825 more downside
XRP was $1.2512 now $1.1614 Who the heck said exchanges were a good idea? The entire point is that there is no central exchange AFAIK I like this source https://coinmarketcap.com
DAX : Missed the huge moves, but 2 no entries 1 loser 2 trades nett 310 (old method -new one did 0 )
UK Gilts Were £15.31 now £15.45 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 $44.73 now $47.24 Down and up…… not boring, though.
Legacy Trade 424, 487-490 and New Trade 491
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
Last week: 8400 call 2272 8600 call 2073.5 x2 Gives us: 1875
Was: 8400 call 2328 8600call 2129×2 =1930 We will of course be looking to roll this.
Now: 2258 2058.5×2 = 1859 roll for 1890 gives us 31
And so we have Dec 8400 Call 2285, 8600 Call 2087 and total credit 463 since initial trade
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’
Was 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.
Then 10200 put 53.5 and the 9900 put 29×2= -4.5 So, Volatility is picking up
Was 10200 put 30 9900 put 16.5×2 = minus 3 No comment, just looks a bit lost.
Now: 10200 put 29 9900 put 13.5 = 2 Might as well run it. Dismal
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 Was: 48.5 and 33.5×2= -19.5 Now Nov10400 put 52 10250put 34 = -14
B) Dec spread 10400put 132 10250put 102 =30 Nov 10250put 59.5 gives us -29.5 Was 33.5 for the short put Dec 10400put 99.5, 10250 put 75.5 = – 9.5
Now: Dec spread 10400 put 119.5 10250 put 90 Nov short put 59.5 gives us -30
Both have not exactly shone, but we run to expiry or big profit.
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!
This week: 10950 calls 43, 11000 calls 31 = -19 No need to panic. Although…..
Now: 10950 calls 21 and 11000 calls 14.5 x2 gives us -8 In profit but might consider early close
Trade 490 Nov Options have some Juice in Them Still
Hallowe’en 2.0 it’s another pitchfork,because…… why not? I think many of us see little upside prospect yet the index seems robust. This is not a classic pitchfork it’s throwing out the rule book, in part but we’re nett sellers while the volatility looks rubbish. You could call it an unbalanced out of the money straddle. Deltas make this look a tad bullish, remember put deltas are negative. So overall it’s tiny positive delta.Theta is yuuuge, however. Risk: we take in 295.5 plus 65.5×3= 492. Risk to the upside is therefore 10942, to the downside 10500 – 492/3= 164, so 10336 is it.
229.5 and 70 x3 =439.5 Profit: 52.5 We’ll run it.
Trade 491 Time To Get Jaded
We’re going to place a cheeky Jade Lizard. We sell a call spread and a put so that the premium equals the upside risk. Thus we sell the 10750 call and buy the 10800 call. ( 77-58= 19). We now sell the 10250 put for 34. Thus we have a credit of 53. Zero upside risk, downside risk at 10200. I have no idea where this market is headed given the US political situation.
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.