What the actual?????????
Afficionados of Tasty Trade, like us, often look to the next month’s trade about 45 dte (days to expiry). We just look at what didn’t happen this week. With 46 days to expiry this was the price of FTSE 7350 July put : 42.5 Subsequently it went to 30 in 4 days. So prices evaporated this week. But by 30%?Ouch! This can happen-but look at FTSE and VFTSE- nowhere -right? Down a mere 20 points at close of play. What is going on? Trust no-one, to quote the X-Files. Thus traders using VFTSE as a real and accurate input may be greatly disappointed. Curiously though, the market made a few lows too.
So What didn’t Happen?
Italians didn’t get the rebellion into power -the EUmpire struck back, flexed its muscles and ensured Italy stayed within the flock. Trump trade tariffs-well that’s another story. Republicans now show an 87% approval rating for the Donald- a high (or low) depending on your political stance. None of this, however, conspired to move the markets. There is just too much money chasing too few things.
Confession of A Rubbish Trader
I tend to underplay my abilities in order not to look too foolish. I make no claims of being a good or great trader. So I don’t mind the epithet of ‘rubbish trader’ with a track record of bumbling along. So- my rubbish trade? I sold some calls at the start of May and the market moved against me of course. At one point the calls I’d sold for a feeble 10, had got really ugly at 180. I should have closed out when they hit 30, but I rolled up and into June expiry,and yesterday closed out. I lost on the calls but made on the long put spread I took out (paid for with some OTM short puts). So now I show a small profit overall, and have a put trade for expiry. What’s the lesson? We are trading options-that means we have options, or choices.
Caveat
Rolling means one side of your trading will make you a forced buyer/seller, but we trade both sides of the market. Even a fool like me can make money trading options.
