Its almost Christmas

Can you ever be wise in the presence of random movements ? Poker is considered a game of randomness but good players manage to overcome the bad hands and win.

This is, of course, down to psychology and depending how you play your hands. How much you raise, varying your game are all part of it.

Can you bluff a share into dropping ? Hmm doubtful, but today just fear was in my favour and the share dropped 20p to 390p.

This set my option put value at 14-20 (14 to sell 20 to buy), so I might have been able to sell the lot at 16 as the share price fluctuated and break even on the second half of contracts. However this would still leave me with a 6p loss on the first half I sold. I need to sell the rest at 22p to break even (less costs)

However, there are a couple of ways I might be able to get out of this. If the share price drops further but the and the 390 put bid hits 22p I just sell the puts. However if doesn't get to 22p I might be able to sell the 400 put for 32p. Here's why. As an option increases in value the percentage difference in the spread will decrease.

So if the share price drops to around 370 I might see 21-24p for the 390 put and 32-35p for the 400 put. If I sold the 400 put for 32p, I get back the 22p but lose the 10p difference between the 390 and 400 put. If I just closed out my position I would get 21p back i.e. 1p short of my breakeven

What will tomorrow bring ? Watch this space