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rofl no you dont, there is a strict risk-neutral relationship between cash and future, any deviation is due to transaction costs (or there is arbitrage)

Yes, I haven't been to this site in a while, I actually came to check and see if people still are profitable rebate trading stocks and noticed this thread -- felt that I could clear some things up about basis :)

I don't do index arb, my costs are low but not that low. If you're wondering whether you should start doing index arb, the answer is no way :)

Fair value should almost never be under 0. It's possible if dividend yields are greater than the discount rate. Also there are arbitrage bounds, so even if it goes negative and fair value is positive, you won't necessarily be able to profit from it due to B/A spreads, funding/lending spreads...

The post before that. I would contend that risk and cost adjusted you will always do better buying equities for long term. I have done quite a bit of research, both from MM perspective and retail perspective (costs-wise, and infrastructure, etc.) regarding this. I would suggest you do the...

Please scroll up and read my post before last more carefully. I've done my best to help you guys out, bye

You're right, it's not an edge, and I sure do know what is but it's not accessible on the retail level. I can give you your pick of a thousand contracts from a chain, I don't care which you trade because they're all priced fairly + risk premium for me. It makes no difference how many you have a...

lol, ok. If you're really that interested my knowledge of options is right up on the level of riskarb's (and I don't use it for trading tiny accounts either). If you read what I said I clearly stated that if used for hedging it's a perfectly fine instrument. However, transaction costs (spread...

I'm not trying to be condescending, it's the sad truth. Try is the key word in your last sentence. Retail investors have no edge in derivatives, and derivatives certainly don't have the same investment potential as equity (they are zero-sum). In addition to increased transaction costs, I see no...

Retail traders shouldn't be trading options in the first place; I somehow doubt the majority are using them for their real purpose (hedging)

Nothing wrong with what Vic was doing, he justhad no risk controls. Historically OTM (and ITM but to a lesser extent) put options on indices have had very consistent negative returns to holders. Writing them is not a bad gig if you aren't leveraged to the point Vic was.

Market just expecting higher vol in the nov forward (I dont remember perfectly, but I think these are 30 day forwards?) than dec, whats the problem?

Because the rate on the bank deposits will change (and can easily fall over a 6 month period to below the CD rate)

sounds good in theory but most people would get bored out of their minds after a few weeks

Are you sure these are trading and it's not just a block being printed?

I suggest you read some Harris (http://www.amazon.com/Trading-Exchanges-Market-Microstructure-Practitioners/dp/0195144708/ref=pd_bbs_sr_1/105-5896708-1825260?ie=UTF8&s=books&qid=1187848360&sr=8-1) In a nutshell, the risk of asymmetric information will be priced into the bid/ask spread. What...

Crossing networks dont show your order to the open market (NYSE/nasdaq/etc), instead they try to find a match on their own system, which is made up of large orders like yours

Why concern yourself with theory when it rarely plays out like that in the market? Convexity hedging moves the treasuries, and the correlation between treasuries and equities comes and goes (usually based on whether the move is rate-related or not)

Take a look at some of the dark pool/crossing networks: NYFIX millenium, SigmaX (through redi/goldman), pipeline, etc. Best place to cross 10k+ (for some you need to be doing more, 50k+) since you dont have to show your orders in most

hedging? bonds? what is this, 2002? BUY STOCKS BABY