200k New Money
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I understand the idea, but the basics of options are lost on me.. I am looking at some info while reading this.
RISK RISK RISK RISK
The price of the stock is irrelevant. You do these trades in a wrap account unless the trades are above 30 contracts or the client gets hosed by fees. The risk of this trade is the risk of the Short Sale minus dividends or "special dividends" If a special dividend is declared you're paying for it. Agreed? On the same page?? That's the short and dirty. OK Rony lets hear you shoot holes in it, you cant, if you want to make some nice trades that will get you referrals ask a few serious questions. PS I have more and better trades.[quote=Gaddock]The risk is that the stock tanks below the strike price minus what you received
Example you sell 5 strike price for $1 and the stock goes to $1 you're down $3 per share ... yes? agreed?[/quote] Why am I down $3 per share? Told you I know nothing of optionsIf you are buying 100 calls, selling 100 puts and selling 100 shares of stock you are locked in at .54cents, no matter where the settlement is. Why not do just a million of those? FOR YOURSELF. Seriously, if there are sizeable bids and offers at those price without having to chase a leg of the three trades why give that money away.
There are no holes. I just don’t think there are sizable resting bids and offers to consistently do those trades.
If there is, you are gold, and I am opening an options account to trade in between cold calls!
Ron … not everybody is full of sh*t. I do these all the time.
You see there are ways to make money in any market. NOW do you understand why I was being suck a d***? If you think I'm not just a blow hard I can tell you where the holes are and how to quantify those risks. That's a trade with a 98% chance of profitability Pretty good edge eyy.I hear you. I know you don’t believe me, but when I was on the floor trading options on the SPX and NDX there was so much volume and market efficiency in those products that synthetic lock ins were few and far between. The smaller equity pits weren’t things I paid much attention to. Thats a great trade. I still question the size and scope of those type of opportunities. When on the floor it costs 15k just to stand there, you have to be doing a lot of those type of orders.
I developed a program that searches for them on every options chain there is out of Chicago. I’m able to code in anything I want to look for.
[quote=Ron 14]I hear you. I know you don’t believe me, but when I was on the floor trading options on the SPX and NDX there was so much volume and market efficiency in those products that synthetic lock ins were few and far between. The smaller equity pits weren’t things I paid much attention to. Thats a great trade. I still question the size and scope of those type of opportunities. When on the floor it costs 15k just to stand there, you have to be doing a lot of those type of orders.
[/quote] I don't do Madoff type volume, even though there was none he he, depending on the chain I can usually bang out a few hundred contracts.Again Ron, try to shoot holes in it. You wont be able to.
I told you I was an Arbitrage prop trader. There is a very nice ARB for your consideration. I hope you can use it. Bang out some trades like that for rich guys and the referrals flow in. Someday you will thank the guy that was such a d***.Yep .54 min but up to $3 max, not bad. Why not do a million? 1) Liquidity, I'm competing against others for the same trade 2) RISK if some crazy special dividend is X Date while you're short you're paying it. You can load the truck but not risk the house as I said. PLUS there is always another bus.If you are buying 100 calls, selling 100 puts and selling 100 shares of stock you are locked in at .54cents, no matter where the settlement is. Why not do just a million of those? FOR YOURSELF. Seriously, if there are sizeable bids and offers at those price without having to chase a leg of the three trades why give that money away.
Keep in mind one contract is 100 shares. 100 calls = 100 puts x 100 for shares (10.000 shares short, not 100)If you are buying 100 calls, selling 100 puts and selling 100 shares of stock you are locked in at .54cents, no matter where the settlement is. Why not do just a million of those? FOR YOURSELF. Seriously, if there are sizeable bids and offers at those price without having to chase a leg of the three trades why give that money away.
Yep .54 min but up to $3 max, not bad. Why not do a million? 1) Liquidity, I'm competing against others for the same trade 2) RISK if some crazy special dividend is X Date while you're short you're paying it. You can load the truck but not risk the house as I said. PLUS there is always another bus.[/quote] Im assuming the entire package is delta neutral. How do you get the $3 max?[quote=Ron 14]If you are buying 100 calls, selling 100 puts and selling 100 shares of stock you are locked in at .54cents, no matter where the settlement is. Why not do just a million of those? FOR YOURSELF. Seriously, if there are sizeable bids and offers at those price without having to chase a leg of the three trades why give that money away.
Any call is pos on the delta and put is neg on the delta not sure how to answer. $3 max is if the stock goes below the strike price minus the credit received.
What do you think Ron? is Gaddock the jackass you thought? he he he. I don't blame you at all. Many of my trading stories are off the beaten path.
There you have it. When you bring in a huge account I'll accept a bottle of Bookers as tribute. FYI I posted this one but have much better. If anybody has any like edges lets talk.If you are buying calls its long delta, selling puts is also long delta. So you are getting a 2.85 cent credit to buy the 5 strike, synthetically purchasing the stock at 2.15 and selling the actual stock at 2.69 thus a net of .54cents. I don’t know what the multiplier is but if one option contract equals 100 shares at expiration and you buy 1 call, sell 1 put and sell 100 shares the position is delta neutral.