FTSE – Down: Range >200 points as Pound strengthens
Daily Volatility: this week from 11.5-10.98
More fireworks of a North Korean variety again this week. Nobody cares. Rinse and repeat. £ rises market drops, volatility drops. Other events too awful to mention. The market still doesn’t care.
FTSE cash index – open 7378 high7435 low 7196 close 7215 Last week: open 7438 close 7378 high 7438 low 7322
FTSE volatility- open 11.56 close 10.98 (last week open 11.18 close 11.56 )
What Trades Would Have Done well
Trade 47– sold a put to buy a call butterfly – closed out early for profit 17. No more trades for expiry-but this was a crazy expiry week. Missed the 7400 straddle: buy put 48, buy call 27= 75. So you’d need a move >75 to make money. Expiry was around 7240, so you’d have made 160-75= 85. More than doubling your money. Scary!
Market Volatility
From 13 to 7.0 ( last week’s range 10.3 to 15.9) As observed : August and September are the only two months to average a stock decline since 1980, according to LPL Financial.(quote from CNN) August was thus: 7372 to 7430, so far September 7430 to 7215
News
Expiry was weird but ‘buy on the rumour sell on the news’ seems to have worked for forex,while clobbering the FTSE. SPX hit a new high 2500-it is now up 10.5% in 52 weeks. FTSE was up 7% to it’s high of 7600.It’s now up 2% but…….GBP to USD is up 3% in the last 52 weeks.
Summary
From last week: Here’s a thing- I look at open interest ( self explanatory term I hope) and find 7200 and 7500 have the highest near-the-money open interest. Thus where the bulk of options have been traded, and still in existence. I think those strikes will NOT be hit. Don’t take my word for it though. As always do your own research. Those strikes were not hit despite the market so desperate to drop on the £‘s rise.
