I bet ‘Gloria” wished she had done this instead… Wink Wink! One theme has continued to dominate the media this week and that is the aftermath of the Budget, as the Liberal Party continue to get battered literally by the media and students alike.
However, I desperately try to stay away from that sort of nonsense and concentrate on the game at hand – that is of course trading the market. The past couple of weeks, post budget has seen us lock in and take profits across a number of our Australian market positions.
- Brambles covered call – closed last week for profit
- Santos Bull Put Spread – closed last week for profit
- Wesfarmers Bear Call Spread – closed this week for profit
- Wesfarmers Covered Call – closed this week for profit
- Macquarie Covered Call – closed last week for profit
- CSL Bull Put Spread – closed this week for profit
Markets only reward action takers
These are all fairly simple, plain vanilla trades, and have certainly reaped dividends for our clients, once again underlining the view that markets only reward action takers. Shame some people have been sitting out of the market for “Sell in May” or post budget reasons.
So today, on the back of a “creep ahead” rally, we are entering into something that is perhaps less plain vanilla, in terms of trade. This one is a pure Options Expert trade and thanks to the boffins on our trading floor, we are entering into a Butterfly Put spread on the Aussie index. From a client perspective, the great news is the hard work and number crunching has been done for you – all you need to do is pick the position size you wish to take – it really doesn’t get much easier than that!
Low Cost Bearish Exposure
This position will provide a low cost bearish exposure to the index. In terms of cost – 10 points to get in – and, the position offers a maximum potential upside of 100 points. However, we will almost certainly be looking to lock in profits at 30 to 40 points, representing a great risk return profile and not trying to milk the trade dry.
As for “Gloria” well, as an hourly rate, this type of trading would hands down beat any kind of “telephone work”!
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