Trade 8 – an Update, Almost Doubled our Money

Terrapin Trader,

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Those Prices Don’t Lie

Well here’s another shocker, and while this trade is supposed to run to near expiry in just over 2 weeks time,already it is showing a profit of almost 100%. OK,OK 85%.  We paid 10, you may recall and now we have the above prices- we OWN the 6800 put,and the 6600 put,and sold 2 of the 6700puts. 119+ 44.5= 163.5-( 72.5 x2= 145 )= 18.5.

It’s about the Economy Stupid

Remember we bought for 10. If this was a bunch of flowers or a car, you’d be pretty happy with that sort of profit. It is important to see trading for what it is. Options,cars,flowers, whatever. The trade is about what you buy or sell for. In my view nothing comes close to options trading. Which is why we are here-trying to get our point across, as it is our passion.

So What’s Next?

We may run a spreadhseet detailing all our trades, if you’d like. To date, if we put those trades in a spreadsheet nobody would believe it. There is no magic at work here, these are just plain real numbers( ok commissions not included for convenience) We are not here to brag about how clever we are or how stupid the people managing your money are. Our aim is simply to get people fired up. To help you understand that anyone reading this could have made those trades.

The Complete Toolbox

There are so many option strategies and variables it would take years to explain them all. We are not trying to be the ultimate source, the complete toolbox. We are giving you more than the basics, which will stand you in good stead for as long as there is an options market. You may wish to trade only butterflies and take your profits at a fixed limit. You’d sleep well.

 

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

1 Comment

  1. Those are real prices from a free data vendor, I just take screenshots but there is no reason to doubt their veracity. I make no apologies for being such an amateur number cruncher or accountant. You don’t need a Nobel prize in maths- Fisher Black, Myron Scholes and Robert C. Merton did that for us. I thank them every day!
    By the way I’d have scaled up all the trades so in real terms your outlay might be £1,000-but consider that it is highly unlikely a butterfly will go to zero in the 2-3 weeks before expiry. I’m the plank that let’s them run to zero in expiry week! I’m the clown who buys shares that tank the day after I bough them- but never again. Learn from my schoolboy errors.Please!

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