A Reminder of That Trade:
Sell the June 7550 call(23) and BUY the 7150 put(22.5). A tiny credit of 0.5
Booking Another Winner- But You need To Know This
I thought the market action was crazy and on Monday- I had prepared some adjustments. The 7550 call went to 31 and the 7150 put down to 19,and then came back to 22. The 7100 put was trading at 16.5(Sell this ) The call spread 7500/7550 was trading at 14 (45-31). (Buy this spread). You thus own a put spread and a long call spread with further short calls. This is a call ratio spread. If the market keeps going nuts(up) you have the long call spread to give some insurance.
Tuesday- What Are They Smoking?
We see another comedy high for FTSE after TEN consecutive up days. This is making me feel very unsettled, and it seems is mainly due to the dumb money going into ETPs. There are many Exchange Traded Products that are just index trackers- they seem like a good idea. Until they aren’t
What Actually Happened
Tuesday, FTSE was like a crazed rhino on Red Bull laced with cocaine. I waited until Thursday and around 11:00 in the morning the put was 42,and the call 28. I’ll book that 14 as a good profit.
What’s Going On?
I just express my own deranged views here, but if asked I’d say the following: Expect market nonsense-in fact always prepare for it.
And ….FTSE is comprised of many global companies – our domestic issues have a modest bearing on it.
NB- Remember a spread means you own one option and have sold another of the same type.
