Well after my last post I am stunned that the market dropped so much, as reality and stockmarkets don't usually correlate.
I still remember Barclays announcing a profit of £533 million in either '91 or '92 and promptly announcing the sacking of thousands of staff-nice business.
Of course the markets have bounced back big stylee- all that lovely cash sitting in GS accounts allegedly, as our own banskters get their snouts in the trough too. It's the banks and the miners that move ftse, but I've always said buy BP if it goes under a fiver-didn't do it myself of course,and now a big bounce from 470 something to 520- 10% on a share is huge in my world of options.
Thursday 27 May 2010
Saturday 8 May 2010
A Week of torment
I closed out my neutral/mod bullish positions on tuesday as had been my plan going into the election and other big market movers, such as nonsense farm payrolls( which are as accurate as an 11th century clock).
I was not even at the screen on thursday when all hell broke loose but frankly I had no plans and no ideas about trading this week.
I have yet again traded dismally with cable 8 o'clock system which did rather well, if only I'd managed to trade it properly.
I think the markets will smash up in the next few weeks based on the alleged $2,900 billion in cash on the sidelines according to FT's the 'short view'.
So how to trade options when Vix is so high? Ideally one should be selling premium, but the safer route would be to buy spreads,and if one must sell naked, then have big protection or a plan like rolling into a condor.
Example- buy 10x 5500/5550 call spread sell 3 more 5550 calls. Market goes up big, sell 7 more 5550 calls to make it:
Long 10x5500, short 20x 5550, then buy 10x 5600, hopefully for no extra cost, reducing risk to zero.
I don't have option prices so this might be a bad strategy, but as we have dropped from 5833 to <5000 I think 5500 is a key level for the banksters who are still awash with other people's money.
All the above is for provoking thoughts, it is not advice-that costs ££££
I was not even at the screen on thursday when all hell broke loose but frankly I had no plans and no ideas about trading this week.
I have yet again traded dismally with cable 8 o'clock system which did rather well, if only I'd managed to trade it properly.
I think the markets will smash up in the next few weeks based on the alleged $2,900 billion in cash on the sidelines according to FT's the 'short view'.
So how to trade options when Vix is so high? Ideally one should be selling premium, but the safer route would be to buy spreads,and if one must sell naked, then have big protection or a plan like rolling into a condor.
Example- buy 10x 5500/5550 call spread sell 3 more 5550 calls. Market goes up big, sell 7 more 5550 calls to make it:
Long 10x5500, short 20x 5550, then buy 10x 5600, hopefully for no extra cost, reducing risk to zero.
I don't have option prices so this might be a bad strategy, but as we have dropped from 5833 to <5000 I think 5500 is a key level for the banksters who are still awash with other people's money.
All the above is for provoking thoughts, it is not advice-that costs ££££
Subscribe to:
Posts (Atom)
