November FTSE 100 Index Option Contracts

Opened "short" at about 3.45p.m, 6 contracts in the 4550 Puts and 5550 Calls. Total receipts for these sales was £1528.40p, mine to keep if the FTSE100 Index lies between 4550 and 5550 at 10.30a.m on Friday 20th.November. At close of business (4.30p.m GMT) the Index stood at 5190.

FTSE 100 Index . .

. . . stood at about 5248 at 10.30a.m when the October contracts expired, so I trousered the £1018.40 (see above) that I got 4 weeks ago when I sold a 4500 to 5500 spread with 6 short contracts each end. The next series (November) expire on November 20th - by which time I will have referred fans and followers back to the Merry Angus again! (and see earlier post)

David What'sHisName . . .

. . . can't understand why he has been sacked. Sorry! Been asked to resign from his job as Minister of Silly Dancing (see picture). Sorry again! Been TOLD to resign. I would have thought he was the Ideal Silly Minister. Consider his achievement. He devised a method of channelling £100K of taxpayers money (your money, my money) into his own back pocket without it looking like he actually stole it. First step is - he helps to make up the rules which allow him to do this. Then he votes to approve them. Then he whines he was only operating within the rules. (If you can hear him when his nose is so deeply buried in the Taxpayers' MoneyTrough. Makes our greedy b(w)ankers look like bumbling amateurs, innit?) Dance on, pal. And the Best of British!

Another David

OOPS! Where's he gone? CLICK the links below.

Just a hard working friendly gent, traduced by the media and generally being given a hard time. Life is soooooo unfair, innit? He has recently given up his steady job(*). For details of his misfortunes, see his "Local Guardian." Looks like yer favourite uncle, don't he?

(*) Conscientious MP for Spelthorne, devoted to the interests of his constituents . . . etc., etc. . . but as far as I know, never yet been on "Desert Island Discs"

Bloggers, Fans and Followers . . . and all who believe our banks are just TOO BIG to fail. Lloyds Bank have just tapped Mr. Darling for another £5bn of your money. Read all about it in today's "Guardian." Wonderful invective!

Here's a little riddle . . . which of these 3 do you depend on most?

Honey Bees . . . . . . . . . . . . . SUVs . . . . . . . . . . frozen seas?

Despite the DOW JONES index zooming through 10000 yesterday,

the FTSE 100 Index fell back by 9.30 a.m (GMT) to 5237.

So my OCTOBER spread (4500 to 5500 Put to Call, expiring tomorrow at 10.30 a.m)

looks pretty safe.

Lots of PC Fans out there?

My Mac G4 Powerbook developed a fault. CDs and DVDs weren't recognised and didn't always eject. Drove it to the nearest Mac "Genius Bar" (Google it, all you Dell fans) Diagnosed replacement required. I left the Mac for repair, which they would do "without labour costs, because it's only a two minute job when we get the replacement drive" (Would Acer do that?) No sooner home than the Genius Bar called. "Er . . we may have damaged a connection taking out the old drive. So we will replace the connection as well . . for free . . . and just in case we damaged the logic board when we disconnected, we will put in a new one . . also free." (Sounds familiar, HP fans?) But I would need to return to the Genius Bar to sign additional repair authorisation. Nuisance . . but . . . . while waiting for the paperwork to print out, Genius Dan gave me lots of broadband and other tips. (Presumably PC users have access to similar dedicated young folk falling over themselves to help sort out problems?) And the displays of OSX, iPhone and iPod tips on king-size screens behind the Genius Bar are worth a visit in themselves. By the time paperwork was ready, so was the Mac! (I think they didn't want me to drive home for the second time without it.) One minor gripe. Some Google hits will tell you that Apple's Genius Bars open at 9a.m. They don't. It's 10a.m. One other gripe. When will Apple open a Genius Bar in Leeds? There's one slated for Newcastle-on-Tyne towards the end of the year . . even further than my nearest. The Big Downside to all this, of course, is the usual one. If you're a Mac fan there's only one MacMaker to choose from. No competition between manufacturers means you must be prepared to dig deep for your Mac, compared to Dells, Acers etc.

The Technological Fix strikes again . . .

You will all know by now that NASA recently whacked 2 space vehicles into a crater near the Moon's south pole, hoping that the resulting 6 mile plume of debris would hold evidence of water. Apparently the Moon's south pole is one of the many places in the Solar System where the Sun never shines. Next day . . a BBC announcer or anchor-person or similar technological illiterate announced "That will be good news. It means that the next time astronauts visit the moon, they won't need to take any water with them." As if "visiting the Moon" was a bit like visiting Bognor Regis for the day with your supplies in a hamper in the car boot (trunk) . . . and way-hey! . . . finding a MacDonalds open when you get there! Trouble is . . . there seems to have been very little plume. So on Saturday (10th. October 2009), the "Guardian" reported "One theory is that the impact site was unexpectedly hard." With bated breath, trembling hands and pounding heart, I read on. Was the newspaper article about to suggest that "maybe the water was frozen"? (From time to time I will post more examples of technological barbarians uttering statements from craters where the Sun never shines.)

FTSE 100 Index . .

. . . ended the week at 5162, up 173 points on the week. October options expire at 10.30a.m next Friday. No action needed.

Any Posties Reading This . . .

. . . remember . . . when you go on strike:-

1. NO MORE JUNK MAIL FOR WHILE, T.G!

2. I won't get my Christmas Cards, nor will I send any.

3. You won't get paid, with serious implications for Christmas Stockings etc

4. Your union officials will explain to you that they're not on strike, and in fact

are working harder than usual in defence of your jobs, pay etc and so . . .

5. They will continue to receive their emoluments . .

6. Lots of businesses that rely on sending and receiving mail will find other ways of doing business that don't so rely, and won't be there for you when strike is settled . . . but the best (or worst) is . . . OOPS!

7. Royal Mail could well be one of them!

8. There's always winners and losers, innit?

FTSE Index opened this morning at 5147, a few points down on last nights close, and I look like being one of the winners when the October options expire next Friday.

A lot of 1 through 8 above is ironic, of course. My postman is very friendly and helpful, and I often wonder how he feels, lugging a great sack of processed trees that he knows will be going straight into the bin . . .

"Remember Me . . . ?"

"That's right! Sir Fred "Slasher" Goodwin, former CEO of the RBS. Today's "Guardian" (Money section) reports that I have been referred to as "World's Worst Banker" Not fair to so traduce me - just because I destroyed a business which, in terms of its total assets, was the Biggest in the World!

I'm actually the "Man Who Really Put the 'W' into Banking" And don't you little creeps still working for the RBS ever forget it - or you'll find your pensions get slashed. If they haven't been already. Or you'll lose your jobs. If you haven't already. I know where you all live!"

FTSE 100 Index . .

. . . closed the week at 4988.7, nicely in the middle of my Put to Call spread in the October series - 4500 to 5500, with 6 contracts of each. The contracts have two weeks to run to expiry on 16th. October (Expiry is always the 3rd Friday in the month at 10.30 a.m.). Potential profit is £1018.00

Broadband

Life is full of coincidences! Only one day after hearing on the BBC about the appointment of the UK's first "digital inclusion champion", we hear that "Great" Britain ranks 25th of out 66 countries surveyed for the quality of their broadband infrastructure. South Korea came top. Oh well . . . . at least lumbering, unreliable UK is in the top half.

Historic Octobers

A RedBraced expert recently told us that "October . . is historically a weak month for equities." Worth checking, I thought. So I checked. The results are shown above. . My basis of calculation is - % change in the FTSE 100 between market close on the last trading day of September to market close on the last day of October in each year shown. We see that in this "historically weak month", the FTSE 100 Index has risen 19 times in 25, and has fallen in the other 6. The average change over all the Octobers since the FTSE 100 index was originated (January 1984) is only +0.29%. The maximum October gain was in 2002, when the FTSE 100 rose 8.55%. The biggest October fall was in 1987, when the FTSE 100 fell 26.1%. Now - this doesn't prove that RedBraces Angus talks through his hat, because we haven't compared this result with FTSE 100 performances in Januaries, Februaries . . . etc. And this analysis doesn't compare the FTSE 100 October performances with other indices, for example, the FTSE 250 Index or the FT All Share Index. Nor do we know what Angus would consider a "strong" performance. So in his own terms, he may well be right. But in my view the important thing to remember is . . . in randomly changing systems such as the FTSE 100 Index, the past is no guide to what will happen next, and your guess of where the Index will be at end October 2009 is just as good as the RedBraced oracles' . . . . or mine! Remember - if a consensus of experts COULD predict market movements reliably and accurately . . . there wouldn't be a market.

And While We're On The Subject . . .

. . . of Global Warming, Climate Change, Saving the Planet and all that . . . I'll swap my incandescent bulbs for those depressing yellow-green (or 6500degK brilliant white) low energy monstrosities when H.M Government TURNS OFF THE FLOODLIGHTING on the Palace of Westminster and instructs local councils to do the same on its Town and City Halls. Until that happy day, it's another case of "do as we say, not as we do." FTSE 100 Share Index closed last night at 5159 and Apple have borrowed my trusty old G4 Powerbook OSX v4.1 Tiger to bung in a new CD drive.

Public Spending Cuts . . .

. . . we are told - by all 3 political parties - will be necessary. This is because H.M Government has given so much of our money to our busted banks and to Sir Fred Goodwin. (because he needs more yachts, Lear jets and holiday homes.) Well and good! We are all enthusiastic socialists, and so must be prepared to tighten our belts so that the reckless rich can be made even richer. But how do we - or rather you, dear FellowBloggers - reconcile Public Spending Cuts with the appointment of Martha Lane Fox to the post of "Digital Inclusion Champion" (BBC Business News, 29th.September 2009, interview with Robert Peston.) I intend no criticism of Ms.Lane Fox. Far from it. She could probably combine the roles of First Lord of the Treasury and Chancellor of the Exchequer better than the present ambiguous and dithery incumbents of those high offices. (But it would be nice to know her "job description" and how much impoverished Public Spending is paying her to execute it.) If Ofcom can't tell BT and the ISPs to get their fingers out and lay down twentyfirst century broadband infrastructure, what can Martha do? The same interview brought tidings that the French Government has declared that internet connection is a "human right" equivalent to electricity and water. Gordie Brown was twittering along these lines not so long ago. Well, if that's what EU leading lights think, let them try the following experiment. Do without broadband for a fortnight. Then try doing without water for a fortnight. Then try thinking for a fortnight before you open your mouths.

More RedBracesSpeak . . .

. . . from the "Guardian", Saturday 26th. September. Here's a typical pronouncement from One Who Clearly Knows, to whit, Angus Campbell, Head of Sales at Capital Spreads. (Spread Betting.)

"It was a poor week for the markets, and the lack of any revival or concerted effort to recoup the losses so far doesn't bode well as we approach October which is historically a weak month for equities." Decode that. Check it against the facts. Like . . October 1987 was "weak" and so was October 2008. But what about all the Octobers in between . . . and now Angus has pronounced, do we better know where to strike our October FTSE Index contracts? If he means "last week", the FTSE fell 90 points. 90 points in a whole week! A fall of a gigantic, never-to-be-recovered whole 1.73%! Oh My Gawd! Give us a show, Angus - jump from a high window to celebrate the End of the Financial World. The Business Press and News is loaded with Anguses, whose guesses are no better than yours or mine. Opened short 6 x 5500 October Calls and 6 x 4500 Puts, expiring on 16th. October, receipts for these opening sales - £1018.40. FTSE just now at 5100.8

Yeah . . right . . . whatever

Today's 'Daily Mail' tells me that ". . . Alistair Darling is to haul in bank chiefs and demand that they do not pay lavish bonuses ahead of legislation to crack down on 'recklessness and greed' in the City . . . " Methinks he's lost that one before he starts . . . . Non-U.K nationals may care to know that Alistair Darling is Chancellor of the Exchequer, and there are no strings on him . . . except the ones pulled by the Lads Who Put the 'W' into Banking . . . the IMF . . . the World Bank . . . the PSBR . . . the European Parliament . . . the European Commissioners . . . and probably Mrs.Trellis of North Wales . . .

September FTSE 100 Index Contracts

Opened (short) with 6 x 4300 Puts and 6 x 5200 Calls on 21st. August. Raised the Puts strike to 4675 on 8th. September, and closed out the Calls on 10th. September as the FTSE rally through the 5000 level continued. Net profit on the September FTSE contracts - £881.00.

Centrica plc Contracts

My main concern during the September series (expiry 17th. September) was with my covered Call options on 5000 Centrica plc struck at 260.0p. I opened these Calls when the stock stood at 246.5p in March 2009. During the contracts I received the half year dividend (£436.50), paid in June. Towards the end of the contract the stock rose from a low of 217p to 268p a few days before the contract expired. I was in some danger, therefore, of being assigned. I would have had to sell the shares for 260p. Well . . . counting the div and the opening receipt for the Call options, that would have made a nice profit. But with the next ex-div date coming up on 23rd. September, I closed out the 260 September Calls and sold 5 x March 2010 280 Calls. The net receipt for this transaction was £187.00. Counting in option receipts, and including all expenses, the shares have cost me net 226.36p. Centrica stock at the moment is 257.4p mid. I have qualified for the next dividend payment, but it would be unwise to sell the shares. Fans and Followers will by now be able to say why!