Options and Spread Betting

[GoSeigen]

The Options and Spread Betting Board on TMF was regularly used but hasn't survived the move to TLF. I'm starting this thread in the hope that former and new members will post and demonstrate demand for a dedicated board here.

For the board sub-heading I suggest "Leveraged and short-term trading: strategy and practice"


GS

[GoSeigen]

The VIX term structure has been showing signs of inversion for some time now. I have been gradually buying S&P straddles since March expiration, with the odd FTSE put and calendar spread thrown in. Overall long vol with a small downside bias. No idea how it will work out.

What are your thoughts and approach when the term structure is inverted?

[Aside: I'm also gradually increasing my JGB short position -- currently 40% of total capital, partly hedged by long gilts and treasuries. This position clearly is vulnerable to a rise in UK rates, but if UK rates rise then Japanese rates ought to be at least partially in step which would benefit the short JGB position. So I'm comfortable with the market risk here.]

GS

[GoSeigen]

Perhaps the title should be "Options, Spread Betting and Short Selling" or "Options, Spread Betting and Hedging" as I think most people posting here will use short positions as part of their strategy.

Any thoughts?

GS

[saechunu]

Perhaps the title should be "Options, Spread Betting and Short Selling" or "Options, Spread Betting and Hedging" as I think most people posting here will use short positions as part of their strategy.

Any thoughts?

Some of the traffic that would naturally fit here appears currently to be on the 'Trading my way to a million' section. Derivatives trading-type posts there that aren't specifically to do with the million challenge may need to be steered here by mods or other posters.

Names are always a problem. Something like 'Derivatives: Trading & Hedging' might cover quite a lot, but with no specific mention of options or spreadbetting could mean posters wouldn't realise it's where they should post!

[zxc100]

GoSeigen I like the Options, Spread betting And Hedging version. I'm not sure why but probably some irrational emotion about short selling.

I have reduced selling puts recently as I am cautious given the low premium on offer. I am finding strangles a more comfortable spot. I'm not brave enough to start buying volatility as I usually get that wrong. Good luck with your trades.

Zxc

[moorfield]

Perhaps the title should be "Options, Spread Betting and Short Selling" or "Options, Spread Betting and Hedging" as I think most people posting here will use short positions as part of their strategy.

Any thoughts?

Some of the traffic that would naturally fit here appears currently to be on the 'Trading my way to a million' section.

Hello GoSeigen

I am spread betting put ratio spreads and have parked my project over on "Trading my way to a million".

viewtopic.php?f=7&t=2124#p19239

M

[GoSeigen]

The VIX term structure has been showing signs of inversion for some time now. I have been gradually buying S&P straddles since March expiration, with the odd FTSE put and calendar spread thrown in. Overall long vol with a small downside bias. No idea how it will work out.


GS

Since the above post, it should be clear that the straddles I bought last March/April did not produce much profit! However, in the meantime they have acted as insurance against short option positions opened whenever the vix jumped up, so their cost has been somewhat mitigated.

After this morning's sharp drop I have again bought March 7250 straddles. Will be a bugger if low realised vol. continues all the way to March 2018...


GS

[GoSeigen]

1nv35t,

For the uninitiated, please, a quick primer on the benefits of Britannias over bars in your opinion?

Thanks,

GS

[tjh290633]

Isn't that the fact that a Britannia is legal tender for £100 and so is exempt from VAT. Gold bars are subject to VAT.

TJH

[JMN2]

Isn't that the fact that a Britannia is legal tender for £100 and so is exempt from VAT. Gold bars are subject to VAT.

TJH

I seem to remember investment gold has been free from VAT in EU since 2000.

[DrBunsenHoneydew]

Isn't that the fact that a Britannia is legal tender for £100 and so is exempt from VAT. Gold bars are subject to VAT.

TJH

I seem to remember investment gold has been free from VAT in EU since 2000.

I think Terry meant CGT not VAT.
Capital Gains Tax is exempt on all British legal currency. This includes gold Britannia coins , silver Britannia coins and gold Sovereigns . Meaning you can make an unlimited tax free profit on investments of any size and value on all these British legal currency bullion coins. CGT is payable on all other gold and silver coins which do not fall into the category and all gold and silver bullion bars are taxable.
The bad news is, unlike gold bullion, VAT is payable at 20% on silver bullion bars and coins. Perhaps because investment gold is now exempt, there is a misconception that investors believe other precious metals such as silver, platinum and palladium are VAT free.