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I would not be doing it for the reason of low risk. Im looking to see if there is a good risk reward in merger arb. Do you have some experience in this field?

What sources do you use for your data? Are you ever dealing in microcap/nanocap mergers?

@mergerpie take a look at the RILY/CALL deal. Its expected to close at the end of the month. RILY to pay 8.71 cash for CALL stock is currently trading at 8.47. They are just waiting approval from HSR. I cant see the HSR causing a problem here. I can't find to much news on this tho. Thoughts?

Research shows that risk arb spreads have been decreasing since the 90's. This makes sense due to speed of information and interest rates decreasing since that time period. Some merger arb funds are lucky to make 5% a year. The Barclys Merger arb index has done nothing for the past couple of...

What is wrong with buying a good earnings surprise when a stock makes a new high? LULU for example

Yikes. Im not going to comment on your level of ignorance. But if tomorrows events were predictable there would be no money to be made in trading. So yes the element of randomness is your friend. If I am buying/selling a straddle I am making a bet on the element of randomness around the future...

Kev if I plot the dow jones components 1 month IV vs 1 month lag close to close vol, the spread is pretty close to 0. Its usually slightly above 0 because the shorts are short convexity but I mean I think it does a pretty good job at predicting forward realized vol. The Garch family indicators...

Kev whats your background? This math is a little over my head and I will need a day to work this out. I cant find good articles on this stuff. Are you on another forum that deals with the mathematics of options?

Still not risk free. The OP clearly watched a video of someone trying to sell him their road to riches option course.

huh? Did you read my post? Random does not mean unpredictable. Randomness follows a distribution. You can predict long run events. For example the stock market is random (it's returns follow a skewed normal distribution) but in the long run it will increase by 9% a year etc... trading is about...

Random does not mean unpredictable. Flipping a coin is random however after 1000 flips I know I will have roughly 500 heads. Start with that

Hedge fund mangers are supposed to give absolute returns (low beta) in up or down markets. SPX was up 23% in 2017. The guy who got 41% return was probably levered stocks and Im pretty sure he would be hurting if the market was down 5% instead!

You said you lost your money but you also say you are a lucky trader... this does not make sense to me. In regards to your post on spread analysis: what's losing you money is not your trading analysis but your risk management. With optimal risk management, buying/selling at random points should...

If you want to learn the risk free option strategy, I would suggest you read at least 1 book on finance first.....

.6028? Where is this # from? Thanks for the intuition there. However if I want to find the expected value of the stock price distribution is it not the straddle price? If it was more you could always sell and if it was less you would always buy? Thanks Kev

This is a bit more mathematical, but I know there are some smart guys on here. ATM straddle price = sqrt(2/pi) * S * vol * sqrt(t/T). where t = time to maturity and T = 1year in days and S = stock price This formula actually gives us the expected value of the trade. The expected value is =...

I think buying highs in bear markets could work to. Just maybe not stocks. Like if guv bonds/gold/biotech are rallying you could definitely go for the ride. Afterall, the money has to go somewhere

THERE ARE TONS OF MEGA CAPS ABOUT TO MAKE NEW HIHGS!!!! AAPL, AMZN, BABA, FB. ALL BIG RETAILS JUST MADE NEW HIGHS!!! I think this is THE crazy up leg before the end of the credit cycle. BUY BUY BUY!!!!

This was very well written

Bonds are taxed as interest, so are preferred shares and t Bill's. Are those for chumps? Dividend stocks give you the source of income as well as capital gain potential. As a group they dont fall as much as the general market in hard times. Sure in the long run much more growth potential in non...