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Z ... What products are you trading? ... James

I thought that is what I said ... if you specify the wings as being 'long' or 'short' ... the spread is defined ...

As ever with options the terminology can be confusing, and the simple way to remember the convention is, when referring to 'Long the wings' butterflies/condors is - you are buying for a debit a 'long the wings' call/put fly/condor - you are selling for a credit a 'long the wings' iron...

Magic ... it sounds like you belong to the Chicago school of rational economics where all know information is already priced in and market participants behave rationally .... the opportunities frequently arise when the participants are behaving irrationally ... long may that continue .... James

If you are seeking mathematical proof, you are going to be disappointed and probably unsuitable to option trading, as the markets are really a study of behavioural science and don't really obey 'cast iron' rules ... but wish you best of luck in your search. James

Hoadley ... not free .. but not far off

Don't think there is any arb; you wouldn't expect adjacent straddles to be same value; assume you; - Buy the 5300 straddle for 244 - Sell the 5200 straddle for 246 - Nett credit of 2 Synthetically you are either; - Long x2 the 5200/5300 put spread for 98 debit - Short x2 the...

Why not hedge your stock by selling it?

Initial margin is irrelevent ... you need to work out your margin when the worst case happens .... otherwise you will be carried out on your shield ..... James

CM Going back to your original trade; long the 37/39 strangle; a couple of simple trades that might have worked better as the UL price moved up; 1. Sell the 37p / 44c strangle for a credit of $15.00; would leave you long the 39/44 call spread for nett $1.50 debit. 2. Sell the 44p / 44c...

Nice job, dissection can be art as well as science ....

Donna You may find both answers are correct. It is the traders choice which strike they remove the conversion [-u +c -p] at in order to determine the synthetic equivalent. If you remove the conversion at the 70 strike; you get +70c / +70p / -80p If you remove the conversion at the 80...

Donna No, dissection can be done in different ways; I specified that if this position was dissected at the 80 strike it would be the equivalent of -2 x 70/80 put spreads and +1 80 call. If you dissected at the 70 strike; you would have, as you say, the equivalent of -1 70/80 put...

You can 'dissect' this position by taking out the conversion [-u +c -p] at one of the put strikes. For Example; Long 100 shares Short 1 put at 80 strike Long 2 puts at 70 strike If you dissect the conversion at the 80 strike then the synthetic equivalent of this position is Short...

NewGuy ... Your suggested trade is a slingshot .... a 30/40/50 butterfly with an extra 50 call wing ... given IV north of 100%, the embedded 40/50 call backspread [-1/+2] is relatively expensive .... may be worth thinking about selling 30/40 put spread or buying OTM call spread as...

Adam Index Options such as CAC and FTSE are priced off the futures / synthetic futures price for the relevant expiry month. The above prices imply a futures price of 4052 for April and 3978 for May. The futures price is calculated as Underlying Price + Interest - Dividends and can be...

WJ ... Option Trading can be a great game ... albeit an expensive one if you learn the hard way and let the market do the teaching .... are you based in the UK .... noticed a previous post about ManUtd .... if so, I could give you a hands on demo .... James

Pinozi ...Is this the kind of analysis you are looking for? Pinozi

Charles Cottle has a new software package called 'Risk Illustrator' which can be used as a simulator where you can - analyse either real or hypothetical positions - simulate change in underlying price / implied volatility / time - evaluate alternative potential adjustments under each...