FTSE This Week – DOWN! : Monday- Friday a drop of 42 . A tiny, odds beating 1% range, and a drop in expiry week-you wouldn’t bet against that in a normal market.
Daily Volatility: 9.67-11.89 from about 7.5-11.6
FTSE cash index – open 7433 high 7469 low 7356 close 7381
FTSE volatility- 10.8-10.71 (last week: 9.31 close 10.6)
What Trades Would Have Done well, this week?
Curiously the most counter-intuitive trade for expiry week…..short calls– Not that this is recommended but it is hoped that some (not me) had made some useful gains in a curious week. I make no excuses therefore, for my poor assumptions. I had a horrible trading month. This is rare and we do have plenty more strategies in the tank. Sorry the recent trades have not hit the bullseye. Fallibility and lack of focus contributed to my own losses.
SUMMARY
Out of interest, I recently purchased a ‘Guaranteed Income’ subscription. I think it is terrible. The plan was to sell puts on stocks. Then, sell calls when the stock is ‘put’ to you. In a low volatility environment this is not a good idea as you will sell puts too near-the-money. That is the only way to get a return. When you have the stock ‘put’ to you it will, therefore, not be your choice. You will be the unfortunate forced buyer. You will then sell calls on a stock that is tanking. This is the beginners approach. I dare say you might get lucky for a while. However, one stock tumble will wipe out a year’s profits. Seen it, got the T shirt. Here’s the paltry premiums for one of the UK’s stalwarts. https://finance.google.co.uk/finance?q=tesco&ei=OjwQWqCwJIjPUfiBisAE
A really strange time as volatility is 50% lower than ‘normal’