What we need . . .

. . . is a completely new political party to replace the corrupt, lads-on-the-take parties we have at the moment.  How about the "Hang The Expense Fraudsters Party."  Or, for those who don't hold with the Death Penalty for robbing taxpayers blind, the more moderate "Spare No Expense Fraudsters Party".

Just in passing . . . would you bet that any of the M.Ps who have committed criminal offences to line their pockets at your expense, will end up in prison?  Or even be charged?  No way!  Nigeria-On-Thames operates on the principle - "One law for us self-regrading, self-serving hypocrites in the House of Common Criminals,  another for the berks who pay our salary-plus-expenses-plus gold plated pensions-packages".

May FTSE Options. Part 3

I repurchased my short positions in May FTSE option contracts yesterday when the index stood at about 4410 and heading rapidly south, pressuring my 5 contracts in 4375 Puts. This turned out to be a good decision, because the Index ended the day at 4331 and is heading down again this morning. At the same time I sold contracts in the 4800 Calls and 3800 Puts for June, expiring on 19th. June. Overall, these trades banked £1566, but this ain't profit unless the Index lies between 3800 and 4800 at 10.30 a.m on 19th.June.

Manure

David Heathcote-Amory, the "Telegraph" tells me, bought 550 sacks of manure. (The orifices it came out of are not specified - who's your MP?) at a cost of £385, or 70p per sack, which is fine. If manure in huge quantities turns him on, who am I etc . . .

He passed them to his gardener, which is also fine. He passed the bill to you and me, which isn't, as even the biggest twerp in the House ought to know. (I'm not getting at him paticularly. I'm sure there are bigger twerps than D.HhyphenA in the House, and who knows, some of them may have much more productive orifices.) He joins his many friends and colleagues on both sides of the House, who, we now see, have no hesitation whatsoever if spreading their horticultural requirements all over us. The BBC News keeps banging on about what we the public think of our MPs. Wonder what these well-heeled elected geezers think of US as they burn our money to grow bigger marrows?

Oops! Almost forget . . . the FTSE 100 Index presently at 4440.

The Rats Leave the Sinking Ship.

This morning's "Guardian" tells me that "hundreds of highly regarded RBS staff are leaving because of "government interference and bonuses". CEO Hunter does not explain what is meant by "highly regarded", or by whom. Possibly they belong to the right golf clubs? Where will these professional gamblers with your money and mine turn up next? Will anybody want them? But it's an ill wind . . etc . . etc. Perhaps the spaces they leave will be filled by newcomers with some useful knowledge of old-fashioned banking and a modicum of prudence.

FTSE 4454 . .

. . at 11.00 a.m. America and London seem to have discounted the noises coming out of the European Central Bank yesterday. The FTSE Index recovered quickly as soon as the London market opened . . . so for the moment my narrow spread is safe. May contracts expire this time next week.

A Busy Day . . .

. . . yesterday! I mowed the lawns! I sold 1750 Ashtead shares bought on 22/04/2009. This very short term hold yielded a profit - small in cash terms - of 259% when expressed as an AER%. Would I have been making this percentage rate if I had held the shares for a year? Better a bird in the hand. I put the sale proceeds into BT. The company will reduce it's dividend - some analysts said it would pass its dividend. Div. should be about 7% on the 97.5p I paid for the shares. I countered the run-up in the FTSE by splitting my 5 short contracts in 4500 Calls (May) into 5 x 4550 May Calls and 5 x May 4375 Puts - with the FTSE at 4520. Then I went to haircut the lawns. When this was done I returned to the laptop to find some expert in the European Central Bank had been raving about rolling the printing presses to create enough funny money to save the world. (Hasn't Gordie Brown already done that?) London responded by selling the FTSE down to 4380 putting my 2 hour old Puts under pressure. It's a funny old game, this Option Trading. Total take for May FTSE contracts now £1118.00 - but that now looks far from safe! Watch this space.

The Last Few Days

See next post down!  FTSE going up because it's going up!  The guy at the next screen is buying shares in any plc that's going up, so I better buy some as well!

Option on U.K.Gilts . . .

. . . there aren't any! This is because bond markets are proper markets whereas equity markets are not. So the bond prices do not gyrate the way equity prices do. Bond prices move with interest rates and anticipated changes in the inflation rate (and approach to maturity) and to some extent with equities. Equity prices move with the weather, the vapourings of experts, the snapping of red braces and with the Masters of the Universe (including your pension fund managers) buying and selling them by the millions and tens of millions so that the bets they have made on their "futures" positions come out right. Equities go up because they are going up because traders can see lots of buy trades going across their screens, and go down because etc. . etc. Fear and greed rule the trade in equities so price fluctuations are sufficient to create a worthwhile market in derivatives (options). Many traders also use options to hedge their futures. Futures expire quarterly in June, September etc. Consult the Euronext pages to see the huge "open interest" options in these months.

Bank Holiday . . .

. . . so while the stock market and the options market are  on holiday, let's think about what the bankers will do next. Easy! They will dream up new names for crazy schemes.  So -  "Collateralised Debt Obligations" and "Credit Default Swaps" will re-emerge wearing new hats.  And the game of lending money that doesn't really exist to borrowers who have no expectation of repaying it will start again.  In the process, a few people will get very rich.  They are called "bankers."  Some of them will be the same people who from "Big Bang" to 2007/08 put the "W" into "banking".  In due course the rest of us will be asked by H.M.Govt via Revenue and Customs to bail them out. Again.  From the sidelines, Keynsians and Will Hutton will cry "More regulation!" whilst Thatcherites will cry "Less regulation!" or even "No regulation!" And where will base rate be in 12 months time?  Don't ask me - ask the academic economists. Between them they will have at least a dozen answers because it's a well known fact that economics - with or without regulation - is a very, very exact science that invariably predicts what will happen to base rates, inflation, GDPs and so on very, very precisely

Random Questions . .

Blogger gives you "random questions."  Here's another -

Name  3 "professions" whose help you do not need provided that you can read.

The Good News is . . .

. . . that we are now in a Bull Market! An expert on the BBC "Today" programme today said so. Makes one wonder whether there is a definition of a Bull Market. There is a definition of "recession" but where it came from and who dreamed it up is probably not worth finding out. Soon the FTSE will reach "a permanently high plateau" . . an American Expert said this of the New York Index in 1929, shortly before the Wall Street Crash . . .

Pig Flu!

The Media are falling over themselves to get another health scare going. Remember BSE and it's handmaiden new-variant something-or-other that was going to kill beef eaters by the thousand and the tens of thousands? Remember salmonella, SARS, and avian flu - and tremble! But help is at hand! The one 0'clock BBC news today tells me that H.M.Govt. is sending me a leaflet about pig flu. This can be used to swat the viruses away. Or if you collect enough of them, you can bung up the cracks in your doors and windows to stop the little blighters getting in. Pass the time till some new pandemic turns up by reading "Scared to Death" (Ed Christopher Booker and Richard North, available from Amazon) . . . and remember, you gotta be scared of something! That's how they keep you in line. Now wash your hands.

May FTSE Options. Part 2

It may be only a "bear rally", but with the FTSE up 58 points by 9.00 a.m., I redeemed my 5 "short" contracts in May 4400 Calls and recouped the cost by selling "short" 5 contracts in the May 4500 Calls and 5 May 3950 Puts. This leaves me in the middle of a 550 point spread with 10 trading days to expiry on 15th. May. Net receipts for May contracts now £849. Watch this space.

Bought . . .

. . . a tranche of Taylor Wimpey shares yesterday. New houses will get built in the fullness of time, I guess.  And the banks and B.Socs will use money they've nicked from us taxpayers to lend to other taxpayers who can't afford the repayments and the game will start again.  But it will be different next time, won't it, because the Men in Red Braces will tell us so . . . don't forget, folks, there can't be bust without boom or even vice-versa . . .

And here's an interesting thought.   Mr Brown wants to resolve the question of M.P.s' expenses by paying them a per diem rate JUST FOR TURNING UP AT THEIR PLACE OF WORK. This daily hand-out of taxpayers money is to be more than most of us taxpayers get for doing our day's work!!!  And 650 snouts-in-the-trough Members wonder why we don't respect them any more . . . . even though they are very very important and clever people that this bankrupted country cannot possibly do without.

Centrica plc . . .

. . went ex-dividend this a.m. The share price dropped by (more or less) the value of the dividend. Refer to my posting of 16th. March. The share price remains below the strike price of my "short" September 260 Calls options on the stock. So I was not assigned for the dividend. I keep the stock and will be paid the dividend in due course. What happens next? If the stock price climbs above 260p before the options expire in September, I could be assigned at any time and will certainly be assigned on expiry day - i.e. I must sell the stock to the counterparty at 260p per share regardless of the market price. If the stock price remains below 260p through to the September expiry, I will keep the shares, pocket the loot paid to me when I sold the Call options and look to selling a further round of Call options for December (or March 2010) expiry, at a strike price to be determined by the current price of the Centrica shares. Look at it another way. Every time I sell Call options on the stock without subsequently being assigned I effectively reduce the price I paid for the stock when I bought it . . .

The Alphabet Recession . .

. . . featured on Radio 4 Business News this a.m. (22/04/09) Three experts held forth. No.1 thought the recession would be "V" shaped. Sharp drop, sharp rise towards end of this year. No.2 disagreed. It will be "W" shaped. Drop, bullish blip for a bit, down again then up,up and away! No.3, the ultra-pessimist argued for an "L" shape. Down into recession so deep that government borrowing would exceed GDP and eventually the interest payments on that borrowing would exceed GDP, and we'll all be murdered in our financial beds! I think we can average the vapourings of these 3 redbracers and conclude that the economy is probably well and truly pear shaped.

Unloaded . . .

. . . my tiny holding of W.S.Atkins plc yesterday, adding about £240 to the Save-The-Richard fund.

Every little helps, or as most under-40 year olds say these days, "Ev'ry li'ul 'elps" And I'm not excluding radio and t.v. announcers . . .

May FTSE Options

I guess my "short" FTSE 4350 April Calls (5 contracts) will expire worthless (i.e. in my favour) tomorrow morning, 17th. April, and I will trouser the £806 I got when I sold them.   So today I opened "short" on 5 contracts in the FTSE 4400 May Calls, at £160 per contract, £756 net of expenses.  These contracts expire on 15th. May.

Market movements are as unpredictable as usual.  One expert on BBC Business News this a.m. was talking the market down to 2750 or maybe it was 2350. Others can see the green shoots of recovery. The City rings to the twanging of red braces. The Masters of the Universe are straining at the leash. The next bull market is just over the next hill and I can predict where the FTSE Index of 100 leading shares will  close on any business day you care to name in the next 10 years . . . .

My Friendly Neighbourhood stockbroker asks . . .

. . . "Why is it that nearly everybody is obsessed with money, but hardly anyone is interested in it?"

April First, so watch out . . .

One commonly hears experts, i.e. men in red braces, say "The market always looks two years ahead" If this is true, why did not the equities market fall to its present level in the autumn of 2006, two years before the credit crunch hit stock prices . . .

. . . and remember as you peruse the money/investment sections of the Fat Sundays, the expert's most useful weasel-word is "could" - as in "The price of BoilerRoon plc could double in the next twelve months . . . " They always miss out the next bit which (roughly) states " . . or you could lose your shirt, pension pot and des.res."