Posting Trades

Windlesham1

Well-known member
421 24
No trader in history has learned his craft without a mentor. I like to post real trades, and inspire-this is the latest from my website-it's all free, by the way.
Here’s the Plan

June FTSE expiries-19 days to go. Buy the 7625 call @22, sell 2 of the 7700calls @11.5– result small credit of 1. Buy the 7450 put@30.5,sell 2 of the 7350 puts @15, thus a small debit of 0.5. Overall more or less zero.

What’s the Point?

Unused margin no longer sits, idly losing value. Thinking that the market has run its course, (or perhaps not) we are thus positioned for moves either way. We realise profits as the market moves above 7625, or below 7450. Risk? what about the risk? This is the interesting part. With both sides the result is we own some options and have sold more. Ponder anew. We therefore own a spread, and potential value, along with some short options. Our 7625/7700 spread is locked in should the market go that way.Thus the 7450/7350 is too.

Where is the risk?….7775. The puts? Risk at….7250. Understood?

Max Reward

With a market drop our puts thus give 100, or subsequently on a rise, the calls give 75.
 

itspossible

Senior member
2,778 557
A wise person once said"only invest in what you understand".
I have no idea what you are on about and the whole scenario is complicated and beyond my comprehension
 

tomorton

Legendary member
7,250 969
This is one of the reasons I very early on abandoned options. The other is the costs: any decent trading exercise needs two positions, or four, so charges are a major impact. On top of which, charges on an options trade always used to be exorbitant compared to actually buying some shares. How is the situation now?
 

foroom lluzers

Veteren member
3,612 135
This is one of the reasons I very early on abandoned options. The other is the costs: any decent trading exercise needs two positions, or four, so charges are a major impact. On top of which, charges on an options trade always used to be exorbitant compared to actually buying some shares. How is the situation now?
It is O K on major indices but here is the reason why most lose.They will close legs of the spreads at profits ,eventually nullifying the gain.

Just better off buying one directional option.
 

Windlesham1

Well-known member
421 24
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.

Hope you can understand- I 'm trying to enlighten people,not baffle with BS! these are real trades,we make real money,with strategies
 

Windlesham1

Well-known member
421 24
This is one of the reasons I very early on abandoned options. The other is the costs: any decent trading exercise needs two positions, or four, so charges are a major impact. On top of which, charges on an options trade always used to be exorbitant compared to actually buying some shares. How is the situation now?
Commissions are irrelevant- spreadbetting has 'zero costs' as everybody loses. Options can be traded for £1.80 per lot on IB, I have a traditional broker nad pay a bit more but the service is top notch-shares? No thanks
I urge people to do the hard yards-don't stick with the forex BS- nobody makes money guessing direction. I make REAL money-how many on Trade2win can say that?
 

tomorton

Legendary member
7,250 969
Commissions are irrelevant- spreadbetting has 'zero costs' as everybody loses. Options can be traded for £1.80 per lot on IB, I have a traditional broker nad pay a bit more but the service is top notch-shares? No thanks
I urge people to do the hard yards-don't stick with the forex BS- nobody makes money guessing direction. I make REAL money-how many on Trade2win can say that?

But can't the usual options strategies be replicated using an SB account if that's what traders want to do? And still at lower overheads.
 

Windlesham1

Well-known member
421 24
But can't the usual options strategies be replicated using an SB account if that's what traders want to do? And still at lower overheads.
Nothing like- spreadbetting is really only good over the very very long term-you will take a haircut of 5-25% compared to fixed commissions-this is why IG went from 2 blokes in a shed to a FTSE 350 company-they don't have to hedge even
on our site which I cannot mention here, I priced the trade on IG and it was a tad cheaper to buy but to exit,the spread will be crazy. check out FTSE option prices on IG,though-it might work for you if you look for longer term expiries to buy
 

Windlesham1

Well-known member
421 24
Closed out my call position which had risk at 7600- I had taken the trade for a credit of 15 and closed for zero,so don't mind having no upside risk-there is no telling what these fruitloops will do-there is no reason for FTSE to be on a P/E of 30
 

Windlesham1

Well-known member
421 24
Trade 34 from the site:This is a ratio diagonal*. FTSE = 7527. Thus we are selling 2 7350 June puts at 20.5 x2= 41*and buying the July 7300 put at 55. Therefore this is a debit trade. It costs money. Ouch!

What is the Logic, the Risk, the Reward?

This trade makes money by the short life( effectively 4 days) of the near month puts and massive*θ (theta- time decay). Effectively meaning we are buying a July put with 40 days' life for 14. My risk graph calculator is not being helpful. I think by experience any move below about 7250*in the next 5 days*would see a loss. This could easily be mitigated. After expiry you must decide whether to sell the put that you now own. Or, sell a lower strike against it creating a spread which has zero risk. Or a number of other strategies that you like, given the conditions. Market goes up big, you might see your long put lose quite a bit. Would you take *100% or more profit? That seems the likely outcome barring disaster.

Caveat 2. *I cannot find this as a recognised strategy, margin would be needed to cover the one naked put and the short spread. Remember you are short at 7350, long at 7300:*50 points of risk.
 

carryontrading

Junior member
45 7
Trade 34 from the site:This is a ratio diagonal*. FTSE = 7527. Thus we are selling 2 7350 June puts at 20.5 x2= 41*and buying the July 7300 put at 55. Therefore this is a debit trade. It costs money. Ouch!

What is the Logic, the Risk, the Reward?

This trade makes money by the short life( effectively 4 days) of the near month puts and massive*θ (theta- time decay). Effectively meaning we are buying a July put with 40 days' life for 14. My risk graph calculator is not being helpful. I think by experience any move below about 7250*in the next 5 days*would see a loss. This could easily be mitigated. After expiry you must decide whether to sell the put that you now own. Or, sell a lower strike against it creating a spread which has zero risk. Or a number of other strategies that you like, given the conditions. Market goes up big, you might see your long put lose quite a bit. Would you take *100% or more profit? That seems the likely outcome barring disaster.

Caveat 2. *I cannot find this as a recognised strategy, margin would be needed to cover the one naked put and the short spread. Remember you are short at 7350, long at 7300:*50 points of risk.
50 points of risk? What would your P&L be if the market goes to 7000?
 

Windlesham1

Well-known member
421 24
50 points of risk? What would your P&L be if the market goes to 7000?
When was the last 7% drop? It is highly unlikely,and if that was to happen you'd be able to adjust,sellling rich premium in the far month-it's not just some random forex nonsense! We make ££££££