Discussion Forum

Sorry! Omitted a key phrase with the profit potential of our butterfly. I would advise anyone who has allocated time to trading and is sidelined for now to do some research. How long until some genius comes up with a vaccine for cover-19? We have some major computing power now with several quantum computers online. Money will not even be relevant.
We will return to normality, I believe, but for now, trading is gambling as we have no edge.
Take a look back at some of the links to free education or you can message us here

We lose trade 170 as the world appears to be in deep trouble with COVID-19. Of course this trader took a hit withown account but had to close out- we may have to suspend our weekly trade ideas as the stockmarket is no longer the place to be, and trading even deep out of the money as I do has been a disaster. Out-of-the-money may not be a term with the market tanking- even 500 points below looks risky.

Fantastic. I’ve been reading your posts since 1999 on the now defunct fool.co.uk site.
Thanks for sharing.

On this trade, the potential loss is quite sizeable, as it contains a naked call and put. How would you manage this trade if the index was at 7500 right now (20-Feb)? The short calls would both be ATM, with considerable time value.

PS – what software do you use to model the P/L for a trade like this. I have Option Net Explorer, but it doesn’t handle the FTSE index.

Trade 169- paid 27……. now it’s 45. Anyone else making >50% in a day? Thought so. options give you wings to quote. Nothing else comes close.

Trade 166 now looking at healthy profit minimum 36
Trade 167 that straddle- 185, profit 208.5-185 =23.5
168 profit 1.5+4.=5.5. This was not what we were looking for but closed out as the panic did not materialise. Ideally we need a move of 70-80 for these to yield 20 or more.

Trade 162 looking AMAZING!!!! Who expected that? Cost of 6 to close giving a mahoosive 43.5. Next up our rinse and repeat Trade 164 now 52 – a tiny profit on 39.5 but hey 30% -the stuff of dreams for stock traders

You couldn’t make it up. Remember for fun we kept an alternative Trade 158- that butterfly is now 32.5. Winner! Up 50%
Trade 159
7450 call 46, 7500 call 29 7550 call 17 7600 call 9 7650 call 4.5
Now 23 (-11+5) + (5-(2.5×2))= 7. Bit of a fiddle around but it made 7 for zero cost
Trade160- that was already a modest win despite trying to find the worst trade! (Had we held on it would be a loss of 18). Exit is everything-but had we held it…… we’ll see what Monday brings but my own conviction was to saty on the sidelines. The exuberance may fade quickly.

So…… you have to laugh- the most horrendous trade selection the 7250 straddle is now about 142, sold for 158.5
I repeatedly say I am not a good trader and this is dumb luck. But….. it’s another example of being wrong and being profitable. Personally I thought the trade was bad as there could have been an exogenous event by a political extremist- or even some truth coming out about Boris’s children!
The markets love Boris and really really hate the old chap, the nice one with his allotment

Hi,

I found myself on your website, (cant remember how i got here) but have found it interesting, but i need to learn a lot more, and reasonably quickly as im 58 now….

Can i learn here, or a starting point/ book etc you’d suggest?

As you say, charts can mean all sorts to all sorts of people, in all sorts of timeframes .

Apologies, as i know you would have had same question a thousand times

Regards Gary Simmons

[…] Terrapin Trader says: November 26, 2019 at 8:20 pm […]

How did we do with Trade 158? 57.5-22.5= 35 minus 13.5 = 21.5
Another fantastic winner-because options strategies work. With 5 contracts you’d have £1k in your bin by end of day- a managed risk trade- had it gone the other way, we’d have some juice left in the calls to buy put protection- but we don’t get to see that.
The butterfly as you’d expect -indifferent now 21- a bit rubbish really, though if you’d sold a put to finance it? Peachy.

Well- you could knock me down with a feather. Trade 157 SMASHED IT!!!!!
We paid 9 -remember?
We close out for 7450 call= 61, 7550call= 26, 6700 put= 7 Giving us 28- or 200%.
But we know better than to boast about our wins. This is about a modest trade, and the market giving us a peachy exit. Did we know the FTSE was going to have such a day? Of course not-we have no expectations we just like the odds in our favour, our costs low, and our risk super manageable. This trade needed some margin so the 200% is kind of academic-but be honest what else would you be doing with your cash? We like these little sniper sytle trades and we must always be ready to take a profit. FTSE smashed down too, after smashing up. Perhaps we can get some volatility when we’d most like it.

trade 156 hit a massive 60 as Nigel Farage duly obliged- I owe you a pint,sir! Details to be published in next issue

Feel free to ignore my previous response! That trade is now a get out of jail for zero! You’d lose the 19 premium, but as I have repeatedly said a calendar trade should be given its room to perform and we have another 6 trading days to go.Bad trader, bad trader!( I may have mentioned that before ) Please remember this site is about options not about this idiot’s terrible views and opinions

Ok a bit late but this week we could have closed out Trade 150 for a loss of around 50 on tuesday- but with 19 debit already paid this represents a 69 loss. Our heaviest ever. This could however be mitigated by adjustment/ rolling over. We can look at this in the weekend update

LOL! Trade 149- already lost 10, or 12.5%. But would you sell so near to expiry?

I actually opened the 6950/6850/6750 fly today based on the one you mentioned (couldn’t do the 7000 strike as I already have short puts at that strike as part of another trade) for 7.

Just a little flutter in case the FTSE decides to go downhill.

Will keep you updated.

The Put fly (trade 146) looks interesting. I’ll see how it is priced when the market opens on Tue, and use modelling software to see what the P/L diagram is like, esp if the FTSE rises back up a little.

Thanks and happy trading.

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Loving the site Terrapin (you’ll remember that name from the Fool site years ago 🙂 ).

Keep trading, keep winning.

certainly like your web-site but you have to take
a look at the spelling on several of your posts. Several of them are rife with spelling problems and I in finding it very bothersome
to inform the reality on the other hand I’ll definitely come again again.

That butterfly now 29 so if you like a 50% profit,take it! By the way I hope our trusty followesr understood this was a put butterfly. sometimes I miss out the key words just to keep you sharp.
We win again

Meant also to mention this guy:
Vance Harwood@6_Figure_Invest

The VIX futures term structure as shown on (link: http://vixcentral.com) vixcentral.com (using the “wide” setting” ) is very flat and closing $VIX value is right on top of it. That’s unusual, typically this close to backwardation $VIX is well above VIX futures prices. Seems that VIX is underreacting.

Trade 142 -winner and closed out
Here’s what we did: Market smashed up,so what do we do when in a losing trade? That’s right we ADD to it. Again- we ADD to it.
We bought the 7500/7400 put spread for 11.5. Now we are in for 28, owning a big old 7500/7300 spread. Today we sold for 43.
About 50% profit in 4 days. All will be explained further at the w/end. Reason for closing? Nice profit and the beach beckons…

I said volatility via Bollinger Band width presaged a big move- of course like an imbecile, I’m pointed the wrong way -I have to ditch my stopped clock downside bias- I’m just fighting the tape and that way is ruin.

Trade 140- I think we close for a small credit of 8.5 giving us 17. In real money that’s £170, but if we were doing our standard 5 or 10 lots we’d belooking at about £700. The reason for closing out was the fact that we had 2 up days andthose tend to suck the volatility out ofthe near month. The market had moved over 1% and these only make money on moves of about 1.5%. Sorry this is late but yesterday was a tad frenetic in my other life. We’dbook this as a winner but out of curiousity let’s see how it unfolds

TRADE138- win and close- we’d have done 5-10 lots. So from a cost of 0 the trade went to 34 for the calls and 7 for the puts= 27. Even on a modest 5 lots after comms this would be about £1200 in the back pocket. (720 Duchy Original golden ales!).
The market may do more but these are ‘box of frogs ‘ trades -hop in and hop out

Great post and trades Windlesham. For the Iron Fly (trade 136), what’s the expiry?

Cheers

Trade 131 closd out for a very creditable 14 today. The Friday expiry is a lottery and I’d hate to se it go to zero. I closed out a put trade for 23 on Tuesday when the market looked bleak, and that has gone to zero. So all in, some good exits. Onwards and upwards with June expiry

trade 129 paid 58 now 68.5 and improving all the time. Might be a better trade than first thought,and certainly has a lot of wiggle room

The 7350/7350 call ratio spread bought for 8.5 could now close out for maybe 14. I’m inclined to hang on a bit. The put butterfly now around 17, nothing to do-these always have to run close to expiry.

MASSIVE APOLOGY TRADE 124 IS A DEBIT OF 34 NOT 24 – OPTIONS TRADERS ARE SMARTER -RIGHT?
I WILL STAND IN THE CORNER FOR ONE HOUR

Trade 123 feeling bad as I have no ‘skin in the game’ and this can be an influencer. As expected this trade has done little to date

Trade 122 closed out for 32-RESUUUUULT!

Trade 119- yes that’s a nice 41
Trade 120 now 42 and 207 =165 looks like 46 was top dollar here

Trade 121 made a lofty 18 this week as FTSE danced around and actuall flirted with a drop on tuesday- yikes! A drop???? Trade 122 is this morning making coin- possibly 7.
Trade 119 -could be as much as 40- no sensible prices currently
Trade 120 the calendar straddle, paid 122 now 46 against 216 =170. I think that’s a lot of sweat for a modest profit-oh wait that’s not so bad 40% and low risk too.
Trade 118 -well that was the jackpot for I.C.

trade113- take a quick profit today? Cost of 4 to close out -but nah, we’ll stick with it. Of course yo can always take half off-so a 10 lot would mean closing out 5 at 7.5 or £375 for about an hour’s work.

Trades 105 and 106 again would have made the full 50 if held to expiry

Trade110 made a whopping 60 at expiry -rounding off a very solid year while so many funds failed to make money (only 22% in profit). If people still don’t want to trade options they may wish to park their money in premium bonds-because that is the only othergame in town. Crypto’s are dead, gold and oil, nowhere and bonds are just too big for most of us.
Again I do NOT claim to be a great or clever trader- clearly I am not-it is solely due to the power of options that these trades continue to make excellent returns based on the simplest analysis

Trade 107 now valued at 76 to close out (Thurs 13th) so a small profit of 10. These are very low risk,with pre- limited margin requirements, the width of the strikes. However we risked a loss of 13.5 to get 10. We’d have margin of 100. I think that’s a win.

Trade 109- currently about 24 to close out- that is a very good win- and most likely the risk to the downside has been abated for now.

I think that we have been very lucky with three by one ratio trades in the past- in the last two months these might have got very ugly. While we learn nothing when we fail to make mistakes, these trades are for demo purposes to show the workings not the outcomes. Though the wins are a happy outcome and demonstrate how flexible options are -our core function is to show options trades warts and all.

As expected not much movement with trades 105/6/7 but they show a small profit now.

Trade 106 another bite… credit to open 118,cost to close 84, so a nice 34 to trouser for a clueless trade! I don’t think it ever looked like a loss from the open.
Trade 106 pretty much even money currently
Futures? You might have got stopped out, run 100 points up, I really have lost track of how this might have been tradeable having no method. These reversal days are complicated and suit option traders perfectly, IMHO.
Dixons Carphone 164.4 -creeping up a tad.

That call ratio spread-enter for credit of 2.5 close for credit of 6. Nice little turn around. Win again. so- we should equate this to the futures trade we got 8.5 on margin of about £1500, 6% return but with zero downside risk and very little upside risk too. That future was all risk, we just got lucky. Future now 7033. Each to their own but I’ve had years of trading futures and did ok but it’s not what you need if you wish to avoid stress.

BOOM! The FTSE future went smashing up as the dumb money typically floods in from the weekend. So…we opened at 7095 and we were long. The future went as high as 7156, so to be kind let’s say we actually plucked 50 points there-that’s £500 in old money. A great return on margin 14% in an hour. would we have traded it well though? I would never contemplate holding along future over a weekend-you never know what’s in the news. Anyway this trade beat us in terms of time and profit…. to date. We would of course have to repeat this a few times,be right on direction and be disciplined enough to have a trailing stop. The stock buy- well that I’m sure will now get slammed as the Apple news is not great.

This was not a trade to take into expiry unless it was deep ITM. Premiums decay faster than a toddler’s teeth these days. Had you run it until today you’d break even- or in our world, lose money!

trade 103- a handsome win again!!!! What does it take to have a disaster? I think you could close out the 6900 straddle for 190. Adjust? What else could we find? er this trader couldn’t se any reason to keep this trade alive- so close out,and take your monster profit.

was anyone watching? The call spread made 10, on the downside we still have a tiny risk but could close out the whole position for 2.5 -so that’s about 39.5 in all -a very good win I’d say/ A better trader might have smashed it on the upside with those silly intra day moves up and subsequent fades

trade 104 now 25- we intend to hang on for more but even so if you bought a stock for £17 and sold for £25 you’d be fund manager of the year!