Trade 33 Election Special- Enough Said

Terrapin Trader,

 

 So, How To Win at Elections?

We don’t know, but based on the polls it looks like a landslide to nobody. I’ll state here and now that I take no credit for this trade, I was thinking of a put spread.

It’s A Straddle

Pure and simple-buy low volatility. Here we are buying both the call @56.5  and the put@ 75. Total cost,and therefore risk= 131.5. Max profit ∞, or 7547-131.5=7415.5      Nice if it works out like that-especially ∞,as there’s no way to spend an infinite amount of money.

Could we Do Better?

I liked the put spread long 7450@35/short 7350 @15  for a cost  of 20. We’d need the market to tank, but taking a direction might not be a plan. Risk limited to cost, reward max 100-20=80.

Trade 32 update

nothing to report, but we’ll keep you posted

Published by Terrapin Trader

First found out about options in 1995.From the arcane magazine Exchange and Mart! First trade- a covered call on VOD in 1999. Made 10%,VOD almost doubled. That's when I realised I was not a good trader,and I was forgiven thanks to the amazing world of exchange traded options

3 Comments

  1. Ouch…that’s straddle is still expensive. I wonder how they are pricing vftse to be so low! We would find out soon but I agree it does not harm to have a bit of uspide risk, so may be buy the put spread and sell a call instead?

  2. much to be pondered but this straddle would be 127 to buy on IG -with their huge spreads it might not be a great trade,but at least it could be done for £127 instead of £1,270. Tempted to look at this on Monday

  3. the put spread- possible close out for 30 today(50% profit) , the straddle-sitting there like a strong and stable thing!

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