Today's Action

Aside from tinkering with binary bets- which would have given me the princely profit of £9, at £1 per point based on 2 trades, one winner one loser, I have been watching a spread trade I want to try for real. It amounts to buying a 'Box' and for the 'F' the strikes would be 3550 and 3600. The aim is to buy both the put and calls spread so wherever the market is at expiry you have locked in the value of the spread which is 50. My aim is to buy one side for less than 20, wait for a market move and then buy the other for 20- 25. Thus you pay 40-45 for a trade guaranteed to be worth 50 in 2 weeks time. The trade is further financed by selling much further out puts and calls, and if the market does shoot dramatically one way or t'other you have the cushion of the spread's 50 point value.
Let's put this in real money terms- today in theory could have sold Mar3100 puts at 24 x 4= £960
Buy the 3550/3600 call spread for 17 x10 =£1700
Sell 3750 calls at 36x4= £1440
Buy the rest of the box- the put spread 3550/3600 puts at 26x 10= £2,600.
Cost = 2,600+1700= 4,300
minus 1440+ 960(proceeds of sold options)= 2,400
Thus a cost of £4,300 minus £2,400 = £,1900, to give you a locked in £5000.
All the above assumes your short naked options expire worthless, or you are able to sell more and move strikes out further.
Your risk comes if F exceeds 3850, or 3000. These are not precise numbers, but you get the picture I hope.
I'll explain why I love this strategy at some point and if I can get it to work with real money.
Meanwhile rabbits need some attention and our sick guinea pig needs something tempting.