Discussion Forum

“I do believe in democracy and fair play.”

Sure, but just remember that democracy also applies when the ‘other’ party wins.
In fact, Trump’s landslide win is democracy at work.

Trade 386 November And The Ominous US Election Cloud

Sticking to the knitting, and regulars here know we love a put ratio spread. The choices are huge but trade selection comes down to: Do you want a big chunk of premium? Are you happy to place a low or zero cost trade that could give bigger rewards?. Where do you think is an acceptable level at which to have risk that needs to be managed.? This time it’s a low cost 8200/8000 put ratio spread and as it is long at 8200 and short x2 at 8000 this means risk is at 7800, currently about 6% below the futures price. We pay 85.5 for the 8200 put and collect 40.5 x2 for the short 8000 puts. Our cost is thus 4.5 with risk 6% below the market, zero risk from 7801 upwards. Should the market go very South, we’ll look at adjustments. Let’s hope we get a delicious expiry in the meanwhile. APOLOGIES THIS IS A NOVEMBER TRADE AND VERY FAR FROM A LOSER!

This just in:https://summit.tradier.com/?utm_source=CBOE
It’s 100% genuine from our friends at CBOE

Monday opened with a plummet, and being directional -ie long calls is really for me the worst possible position. It’s purely personal Larry Macmillan says the opposite

Clearly off my game this week for no good reason. I apologise for missing trade 328.

Stop Press: I’m told that Ice.com prices are in fact live. This would chime with the fact that I logged in at 08:00 few weeks back and saw bid-ask prices. However I had been having comms with ICE and told them this was just pointless at best at worst, disingenuous. Maybe this had some effect. I stand corrected.

320 now 213.5 from our original 224 and we would not want PIN risk with this week’s Loony tunes action. It’s made10.5.

Quick up date: All 4 trades in healthy profit.
317- 37 profit
318- 24 ”
319- 23.5,or 24 depending on puts or calls
320 9- but remember our max profit is only 24.
We run to expiry of course.

Yikes! The Jade Lizard looking ugly. Do we let it run, or adjust?
We could buy the 7650/7550 put spread for 35, giving us a little leeway on the downside, and remember we took in premiums amounting to 51.
We are still a fair way off the 7550 level so no cause for panic.
another adjustment might be to look at the upside risk, the7800/7850 call spread, now worth about 8. Buy that back and sell a 7750 call for 40. We now have 51+32 in premiums taken in, and a risky strangle. We know volatility is mean reverting but when it will revert is another matter!

The cost of trade 315 = 60.5 minus 14×3=18.5. I had hoped the graphic was clear enough to see prices and wanted to bring people’s attention to the calculation, in order to understand how strategies like this work. Being biased with deltas is ok if you intend to be directional, but it’s always worth keeping an eye out so you are not horribly skewed one way or another.

Apologies for the late edit.Trade 211 was a back spread.

The utter temerity of the banksters -now ramping up the markets like it’s free money time again.
Trade 308- one option was to close out and take quick 34-38 points.

even closing last night …..221.5 and 65 for the call ratio.

Aaaaaah Dammit. Last night I was reviewing the day’s action and thought it was time to close out, but at the screen late! – the 8100 put was 178 and the call ratio was 65, cost 113 and a clean slate for a drop.

Trade 296- sorry there are typo’s- a bit off my game lately. The debit is 18 but currently it would be 12. Much to be concerned about as the FED announcement tomorrow as per usual is going to be amarket mover, though of course it’s an excuse. A piffling 0.25% doesn’t affect the$ trillions in Wall Street. Wait until rates get over 6%

Trade 295 -making 31 this morning -why do options surprise to the good so often?

Hi, do you have annual performance figures?

So, we paid 2.5 for the crazy straddle and it made the best price of 27, while the FTSE then limped back upstairs and the vol drifted sideways not giving us the front month skew we need to make 100+ which this thing does, when it works. Not happy to persist and at close it is now back around 4. Hand on heart we’d have closed this out this morning around 10.30 when it looked like the selling was over.

Never underestimate the power of words. Powell says X, market goes Y

Crazy end to the month after all the euphoria, it all comes down!

262- when you try to break something it somehow defies the odds and just works. So that trade would now be worth about 124 to close out -in one day. 56 profit, but it can’t really be run to expiry…..or can it?

258 MASSIVE winner! 96
257?…… 222.5+18.5 = 241 -that is the cost to close- CREDIT was aggregate 434. 193 MASSIVE WIN!
What does it take to help peopl understand that options work ?

sidelines proved to be best as this would have beeen closed out for 444 on Tuesday but more likely  an ugly loss of 200 today- Friday with the FTSE at 7168 

This morning Trade 254- long 5x Feb 7500 puts short 1x Mar 7500 put did this:
5 x84, 1×195. While the Mar Put doubled our Feb puts quadrupled.
Profit 225, minus the cost, 3. Gives us 222. That’s £2,222 for one round turn of this puppy.

[…] https://optionsinvesting.co.uk/221-w-e-28may-a-stranglers-dream/ […]

Well to quote, the market can “EAT MY SHORTS”
Our combo- now a credit 79-6= 73 WIN, close out take a break.

Duplication from earlier reply. did not check the boxes before ( I believe).

Let me know what your objective is with the blog and what kind of reactions you are looking for.

I checked the “strategies tab, but did not get a clear impression about the types of (option) trades you favor.

132.5- 109 our ratio spread(Trade 218) has absurdly dropped in value from 40 to 23.5. That is our reward- we take 16.5 credit from this. There has to have been a huge drop in vol, the FTSE is up about 50, yet the US is down currently.
However this is an extraordinary result- we’d take profits here, and run for fun.
Happy Star Wars day.

In retrospect doing nothing would have given us at least a 30% profit but we have locked in a solid 16% with little risk and possibility of bigger rewards.
What would you do? The straddle was ‘cheap’ and theta was not not brutal in the first day.

So as of last night here’s the maths: our initial debit 195, with the legging in we have a zero cost (tiny credit ) trade. What if we closed out?
7050 straddle now 61+135= 196
our call position 61 minus 28 +18.5 = 14.5 credit(7050 long, short at 7150, 7200)
our put position 7050/6950/6850 butterfly: 135+57.5, minus 88×2=176. Credit of 16.5
We made 30 on our initial debit of 195 with almost no risk and a lame market.

So- as promised we leg in by selling 2x 7150 calls at 36 =72
we buy 1×6850 put at 48= 48
we sell 2×6950 puts at 91=182(market has dropped but only 40 points)
We now have a put butterfly and a call ratio spread,
and a small credit of 206-195= 11.
We use that to roll up our short 7150 call to 7200. Now our risk is out further to 7300.

Good presentation!

I was hoping for some feedback- those Deltas in Trade 204
6800 call long + 32
5700call short -45
5700put short +58
5600 put long -43
Actual Deltas +02 as you’d expect from any kind of butterfly

As captured this morning -prices for Trade 200 but seriously, this may not go well as they are highly variable and unknown.
Strike 6150 355 for the call and 59.5 (x3) for the put
or
Strike 6200 314 and 69(x3)
The above for January expiry – the calcs to be shown in due course

Apologies- late with the weekend strangler: 6200 call 63.5 5700 put 64. Nov expiries

189 41+ 22 for the original, and for the Delat neutral 31.5 plus the original credit 30. Deffo a nice win.

190 Debit 4 now it’s…. 24.5-(12 +3)= 19.5. Well you have nearly quintupled your stake!

191 The Jade Lizard … now 25 to close- we took in 51, so let’s say we close out and take 50% of max profit. Happy?

Yowser!!!! Did not see such a drop coming and this has spanked trade 189 in its full delta neutral state. Should have stuck with plan A the 3 to 1 ratio. However one day’s drop doesn’t make a catastrophe.
The weekend strangler?….. Said they’d go belly up sooner or later, and such a strategy opening the trade before the weekend means sitting on a lot of discomfort as in the long run it looks like they might break even or at worst lose money hand over fist. FTSE has been kind in the last month or so. There may be much more pain to come. Stay safe people.

Apologies for minor edit having missed out a link and a typo

So… our little combo did hardly anything -at best about 6, but let’s see what happens
The weekend strangler using those same options? Dammit -95 so it made 114-95= 19.
I think long term it’ll break even with a lot of sleep lost

Trade180 now 13.5 credit
Trade 181 poss 23
Trade 182-no change!- despite the huge move- this is purely a volatility play
Weekend strangler 72 credit to open- now 82.5

Trade 177 could close out for small credit 6.5, added to credit in trade entry 22. Win 28.5 but we run for fun

About 48 to close Trade 176 paid 12.5 -FTSE seems a little unsteady now.300% profit -I’d be boasting about this and selling a trading system for millions if that was the aim.

Well, I’ll eat my shorts! That wretched strangle?… 150.5 to sell to open, 125 to buy to close. 25.5 profit. Annoying? Probably only for me but it comes from high to low vol period

Good grief!
Yet again the trade holds up- put is now 70 despite the big drop at the open,and the call is 48. We took in 152 and this is now 118 to close -34 gain. though of course margin would have been hefty

Debit 19 -close out for 30 -it’s that easy. Every week.
May 5000 put 13×3= 39 Jun 5000 put=69.

289 to close-would you? Profit 60 -comfortable winner with more to go…….
Also the previous weks’ call 3×1 looks rosier too

Apologies for my ignorance- it’s YIN and YANG, not YING.
Karma will doubtless make me pay

The 3×1 call ratio spread. 5800 184.5 6000 (96 x3)= 288. Credit 103.5
Now cost of 56 to close, so 103.5-56=47.5- would you? It’s a fantastic profit though margin would be ££££££
Compared to naked(ugh!) calls 96-64.5=31.5.
We are better by 50% and it’s a shedload more interesting.

Not sure what to say as the butterfly is still worth about 11 but it’s 1,000 points in the money. Cannot see FTSE jumping that much next week, so personally I’d close out and keep my few pence in the purse. Others may let it run,and the Devil take the hindmost!

prices for the butterfly: 6300:427-445 6150:335.5-353.5 6000: 261-277
mid prices 436, 346.5 x2= 693, 269. 705-693= 12. Not a trade to set the world alight but as it’s cheap as chips it has to run.