Make money by standing still
December 23, 2020
–Relatively quiet day marked by a few large trades that benefit from rangebound price ranges with compressed vol to take advantage of time decay. For example, buyer of 20k FVH 125.75/126/126.25 c tree for 0.5 with the contract just at and slightly above the middle strike. Settled 0 vs 126-02. Fills out at expiry between 126-00 and 126-08. Late in the day a large block buyer of TYH 138/137/136.5 put tree for 6. Over 50k traded. Settled 7 vs 137-315. Same version in Feb settled 15, so there’s your decay over four weeks. Also an early buyer of 4k TYH 138/139 c 1×2 for 8.
–Jan treasury options expire Thursday.
–Headline on the FT site: “Fed backstop masks rising risks in US corporate debt market …Record 2.5tn borrowing binge has caused debt levels to balloon faster than profits can keep up.” Moving right along to more important news, Trump is holding up the covid bill in order to give Americans who frittered away their first stimulus checks by buying food and paying rent a second chance at Robinhood accounts with $2000 checks. I don’t know that this is even true, but the current bill apparently includes $130 million for Nepal, “including development and democracy programs”. I hope there’s some sort of matching grant for the US to work on democracy programs as well.
–March Corn settled 443 1/2 a new high. March beans settled 1250, a new high. Take THAT QuantumScape!
Merry Christmas and Happy Festivus, Alex
