May 2011 FTSE Options . . .

I redeemed my April FTSE 100 options (8 x 5350 Puts, 8 x 6350 Calls) for a net £538.80, leaving me in profit by £1642.40p on my April trades.  At the same time I sold contracts for the May expiry on 20th. May as follows - 8 x 5350 Puts, 8 x 6300 Calls, yielding £2614.60, which I keep if the FTSE 100 Index is between 5350 and 6300 at 10.30 a.m. on 20th.May.  However, I find it potentially more profitable to redeem the contracts before expiry and open contracts in the following month.  Readers should study the pricing model on  the Euronext pages to see why this is. (Follow the LIFFE Option Prices link above)

Splashed Out . . .

. . . on 3000 Sainsbury shares this morning, paying 335.8p per share, plus expenses.  The share price had slumped  19p this morning. Sainsbury reported results below expectations, and a rumour is circulating that they will make a bid for Marks & Spencer Group. These 2 bits of business news combined to knock the price off its recent perch in the 380's.  "My Open Contracts" (above) shows I hold 2 x "short" Put contracts on the stock at 340p for the June expiry, so I could be required to buy another 2000 shares at any time up to the June expiry date (17th. June) if the price remains below 340p. I will then have 5000 shares and could then sell 5 Call contracts (covered by the shares) in the September or December series.  

Logica CMG Option Contracts

I was "short" 5 x 140 March Calls (covered by 5000 shares in the stock). These contracts expired at 10.30 a.m today. The share price was 127.3p at the time. So I keep the shares because only an incompetent would buy the shares from me at 140p (the Call strike) when he can buy them in the market at 127.3p. And I keep the £316 that I received when I opened the contracts in October 2010.  I could now sell 5 more contracts in the June or September series at the same strike price (140p), but I will wait a to see if the shares  recover following the recent slide in the UK markets. At the present time I would get less than £30 per contract for the June 140 Calls and little more for the September 140's.  Watch this space.

Monday, March 21st. I renewed the 5 x 140p Calls which expired last Friday. I am now "short" 5 x 140p Calls in the September series, expiring on 16th.September. I received 6.25p per share for this opening sale. I have now paid 121.08p per share net of all expenses. The shares are valued at 133.6p at the present time, so even if I the Call contracts are assigned against me, I have an assured profit of nearly £950.

You Want Your Country To Experience Economic Success?

Ask the Americans to bomb the shit out of you!  That needs some explanation.
The other day my stockbroker forwarded an eMail to me which included a lot of pictures like this . .

Hiroshima, 65 years after America bombed the shit out of it. 

If that needs explanation, or if you are American, or if you are less than about 65 years old, here it is. In August 1945, the Americans dropped the first atomic bomb on the city. The surface agenda was to end WW2.  The hidden agenda was a warning to the Russians and the rest of the World not to mess with Uncle Sam.

But don't be too hard on the Americans.  It's well known that they always operate with the World's best interests at heart, are still sore about Pearl Harbour, and MUST, someday, somewhere, do better than they did in Vietnam. (They dropped another atomic bomb on Nagasaki a few days later. Yup! They're really good at the Massacre of the Innocents.)

Along with the Hiroshima pictures, came a lot of pictures like this . . .

Detroit, 65 years after the Americans bombed Hiroshima.

No, America didn't bomb Detroit, though much of Motown now looks like they did. An "argument" accompanied these pictures - laughable if it wasn't so transparently ludicrous and sad.  Essentially the economic freakster who originated the argument seemed to be saying that Hiroshima had recovered and overtaken the Rust Belt because the Japanese don't have a Welfare System.

Whereas . . yes, you've guessed it, Detroit, Michigan etc have gone down the pan because the Clinton and Obama administrations wanted to expand the rudimentary welfare system that disgraces Old Glory!

Remember, this is "Economics" and economists have correctly predicted all 7 of the last 3 recessions.  As I see it, the Rust Belt is rusting because America thinks the world owes it a living, and nobody, least of all a crappy little country where they once slaughtered 100,000 civilians in a single morning, has the right to build better cars than Ford, GM etc., and build 'em cheaper.  Oh, the poor dears.

Here's a similar argument. I don't know if it's logically sounder, or economically more factually based, but when we're into a pseudoscience like freakonomics, who cares?

Japan supports armed forces, but they do not go rampaging round the World squandering countless billions of their taxpayers' yen on wars which they cannot possibly 'win' in any conventional military sense, and will keep them engaged on "bringing freedom and democracy" to countries they know nothing at all about except they don't like them. Instead, the Japanese put their taxpayers' yen to work doing research into robotics, machine tools, computing, you name it . . while Detroit is sacrificed to the ambiton of military cretins throwing ther weight about in the guise of national security.

Tailpiece. The eMail also asked "What happened to the atomic radiation that was supposed to last for thousands of years?"  Well, the answer to that one so really, really simple that even an economist can understand it. The Japanese are still dying from it 65 years later.

The Greatest Nation on Earth . .

. . . are holding this young man in Abu Ghraib conditions.  Let's just repeat that . . THE GREATEST NATION ON EARTH . . y'know, the one that rampages round the World, killing, bullying, torturing and gereally kicking any ass it happens to take a dislike to, which at the same time whines and bleats that the other nations of the World don't practise democracy, freedom and human rights and so must be tortured, bullied and killed until they start so practising, which doesn't recognize the International Court of Human Rights in case that Court twits one of its precious citizens, which "negotiates" non-reciprocal extradition treaties with the British Government, which protects cotton pickin', banjo pluckin' redneck farmers from fluctations in market prices because it BELIEVES THE REST OF THE WORLD OWES IT A LIVING, which allows its insane investment b(w)ankers to piss its taxpayers' dollars down a bottomless toilet of risk and at the same time doesn't turn a hair when those same b(w)ankers award themselves multibillion dollar bonuses, . . is holding this young man in Abu Ghraib conditions, i.e. naked, sleeping on  the floor, in solitary confinement "for his own safety" because he joked to a prison guard that he might "strangle himself with his own underpants"

Bradley Manning

charged - well, actually, no, he's detained naked etc etc but he hasn't been actually CHARGED WITH ANYTHING - bit like the prisoners in Guantanamo camp, remember them? - he's being investigated to see if he's done anything wrong - that's how the Greatest Nation on Earth begins the process of dispensing justice - with supplying the thousands of documents constituting the bulk of the outbreak of WIKILEAKS. Bradley Manning's President, Mr. Barak Obama, just yesterday declared that Manning's holding conditions were "appropriate."  My guess is either the Hillary Clinton Mob or  the Pentagon told him to say that.

MAKES YOU PROUD YOU'RE NOT AMERICAN, DOESN'T IT?

And before you start protesting that FTSE has just got a chip on his shoulder, think about this . .  which organisation is carrying out the forthcoming census in our Sceptred Isle?  You don't know?  Of course you don't.  H.M Government doesn't want you to know in case you start bleating about the fact the LOCKHEED MARTIN CORPORATION, an American Corporation specialising in the manufacture of weaponry et al, is running the U.K census.  "So what?" I hear you cry, "someone's got to run it."  So this. The Patriot Act gives the American Government the absolute right to see any and all information on any subject held by any American corporation or organisation.  That's the measure of their psychoses and paranoia, but let that pass.  Lockheed Martin will hold our census data and so, in principle, the White House, the Pentagon and the incompetents in Langley, Virginia have access to any personal and family details which you are obliged UNDER BRITISH (not American) law to include in  your census return. This is one result of successive British governments since the end of WW2 sticking their tongues as far into White House underpants as they can possibly reach. Remember what the much vaunted "special relationship" means. It means "Listen, you Limey Brits. You fucking well do what we tell you, O.K?"

April 2011 FTSE Options

I redeemed my March FTSE Option (7 x 6350 Calls, 7 x 5400 Puts) on 8th March. (Expiry was 18th. March), trousering £1104.60 profit in the process - see Table at top of this blog.  At the same time, I opened by selling 8 x 6350 Calls and 8 x 5350 Puts in the April series.  These sales put £2181.20 into the bank, but I keep all of this only if I still hold the contracts and the FTSE 100 Index is between 5350 and 6350 at 10.30 a.m. on the day the contracts expire, 15th. April. If I redeem the contracts before then, the "buy back" costs will absorb some of the yield from the opening sale. So far this year, things are going well. The FTSE Index has been pretty well flat on its back since last October and I have had no anxious moments and have not had to rush about re-arranging things mid-contract. But storm clouds can gather in no time. I'm surprised that recent events in North Africa have not significantly moved World Indices.

Centrica plc Contracts

I have rolled my Centrica 320p Calls (expiry March 18th) forward to the September series 340p Calls. This  rearrangement cost a net £163.00p.  The share price at the time I struck the deals was 328.6p. i.e. above the strike price of the 320p Calls. If the share price had stayed at that level, I would have lost the shares on assignment at 8p below their market value, i.e I would have received £400 LESS than the shares were worth in the market. So . . . the £163.00 SAVED me £400 on the shares, ADDED £1000 to the value of the shares should I be assigned at the 340p level, and ENSURED that I keep the two dividends declared between now and September - provided that the share price does not go much above the 340p level. The 5 x 340p September Calls are covered by 5000 shares.