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What?!?

This is not a drill to practise live trading...well at least not in every day battles. However it is important for anyone who is into options to know synthetics. It helps to square of positions in an efficient manner and to know how and where to look for edge. It is not impractical at all...

Thanks for participating, guys. And of course, there is a prize: https://akunacapital.teachable.com/courses/ An options basics course from market maker Akuna Capital. It's completly free and if you solve all the quizzes, you might even get a hire offer from them :) Good luck

You're right. The arb is for 10cts. The remaining 93cts is asuming that you've sold the fly right away at theo or better.

Heyyyy you found it! Many thanks, man, I haven't bookmarked that blog and was actually looking for it.

I think that's most of the puzzle pieces together here, so let's dissect the position: 1. We buy the 55 straddles for 4.15 2. We sell the 55 calls for 2.15 -> long 200 55 puts 3. We buy 400 65 calls for 0.05$ 4. We sell 200 65 puts at 20.10 - > long 200 55/65 straddles at 2.05$ AND we're...

these are all good risk rewards, but the edge I mentioned is an arb. Also this is a hypothetical example. I don't think you'll gonna find anything like that in a live market anymore. Again: Look at the synthetics

what about synthetics?

Not bad, dude. I guess you translated everything into vols and went from there. 60 is overpriced, yes and 65 are too low...in vol. Fly is also a good start There is over 1$ premium of edge in this if you make the right trades. What about the other option guys @Same Lazy Element @newwurldmn et...

Whatever, man. I usually take the other side of these trades and I love people who are takers in overpriced gamma bets....day in day out. To each his own :)

Well, that should be easy to compute if you fire up your analyzer, check the theta from your outright straddle and then increase the size of the short calendar until its theta matches the straddle. Compare the gamma of the two positions and you most likely get a lot more gamma per decay paid...

You could have made more by risking less, what's not to like about that? If you are just in the game to impress your subscribers with the yolo...well, that's a different motivation

So I found a little gem while cleanign up my notes...can't remember the source thought. Let's see if you guys can figure out potential trades: Expiration: 90 days, Interest: 0%, Size on each quote: 1000 Some guy walks in and offers 200 straddles at 4.15 What do you do and how do you...

Nice little trade you made there, however let me give you a hint: You use options for directional trading, so you play for gamma. Instead of buying dailies have a look at the vol surface first. Term structure is downward sloping, meaning short term is cheaper than long term. Historical vol is...

at least we can trade what we want

I agree. US clitizens get screwed even more since nobody wants them as customers. At least coinbase gets a little competition...

See, that's what I'm talking about. As a trader you generally want to be the bank. Either you pick off dumb orders or you want to PROVIDE liquidity for the other guys at YOUR prices. The last thing you want to do is trade in an ultra liquid market where everyone and their moms is fighting over...

0.3% is still robbery. Derivatives start at 7.5 bps...

I'm not talking retail gambling strategies here. Efficiency is LOB games and arbs vs other asset classes e.g. basis trades, spreads, even skew and term structure is moving with spot so perfectly that only the best can find edge here. If you want to measure how efficient a market is for...

You're afraid because you're ugly?