50% profit per year is easily possible

Q

Quanto

The below conclusion resulted from a bug in the program.
The said conclusion/claim has been retracted.
Sorry for the confusion.


50% profit per year is easily possible
My internal research shows that with some stocks w/ options, an arbitrage of at least 3.5% per month is easily possible.
One has to search for such opportunities by analysing the broad options market data, but it's much data to analyse.
Arbitrage of course means "guaranteed", ie. fixed income, by using some options trade constructs.
Works for accounts of any size, also for big accounts ($1M+).
Btw, it does not require a MarginAcct. A simple CashAcct w/ basic options trading is very much sufficient to apply this strategy.

Monthly to Yearly:
2.0% p.m. --> 26.8% p.a.
2.5% p.m. --> 34.5% p.a.
3.0% p.m. --> 42.6% p.a.
3.5% p.m. --> 51.1% p.a. (median, average)
4.0% p.m. --> 60.1% p.a.
4.5% p.m. --> 70.0% p.a.
5.0% p.m. --> 80.0% p.a.
 
Last edited:
TrAndy2022 said:
What kind of strategy applied ? Is it that neutral options strategy on high implied Vola stocks or something different you have in mind here ?
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It's independent of IV.
Some stocks just offer such opportunities, though most offer none.
Can be caused by market inefficiencies, but there are enough out there to find some.
 
Quanto said:
50% profit per year is easily possible
My internal research shows that with some stocks w/ options, an arbitrage of at least 3.5% per month is easily possible.
More...
I take from the wording that although it is possible it is not something you have achieved.
 
I challenge anyone to make a riskless return of half of this in a cash account and it be "easy". If it were that easy, there would be bots from MM, Prop groups and hedge funds happy with low risk 12% to 15% returns blasting these "arbs". These types of posts promote opportunities that if they existed, you would never share with another person on the planet except your investors. It makes others feel foolish for taking risk and building assets with real money and real trading. Yes, there are those that make 100% to 200% on their money often, but it requires RISK. 51.1% per year in a cash account with no risk arb-sounds like fantasy trading in a paper account that can't be replicated in real trading.

Quanto said:
50% profit per year is easily possible
My internal research shows that with some stocks w/ options, an arbitrage of at least 3.5% per month is easily possible.
One has to search for such opportunities by analysing the broad options market data, but it's much data to analyse.
Arbitrage of course means "guaranteed", ie. fixed income, by using some options trade constructs.
Works for accounts of any size, also for big accounts ($1M+).
Btw, it does not require a MarginAcct. A simple CashAcct w/ basic options trading is very much sufficient to apply this strategy.

Monthly to Yearly:
2.0% p.m. --> 26.8% p.a.
2.5% p.m. --> 34.5% p.a.
3.0% p.m. --> 42.6% p.a.
3.5% p.m. --> 51.1% p.a. (median, average)
4.0% p.m. --> 60.1% p.a.
4.5% p.m. --> 70.0% p.a.
5.0% p.m. --> 80.0% p.a.
More...
 
Here's how the error happened:

A 3.5% arbitrage trade is possible for a year. This is a fact.
But when I ran the program for DTE=30, it again gave similar results.
My error was in the correct interpretation: the program gave for any DTE I chose around 3.5% p.a. :)
Since it gave 3.5% also for DTE=30 (ie. a month) I then wrongly concluded it means 3.5% per month... :banghead::mad:
Of course it always just meant 3.5% per annum...

So, it even wasn't a program error, but a silly human error!... :D
 
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