Is it possible for someone to make money selling conversions / reversals using a retail platform such as IB? I don't see how such a strategy could work for something such as SPY where option spreads are tight, but it looks like there might be some opportunity for trading conversions / reversals on less-liquid stocks or ETFs with weekly options where the bid / ask spreads are wider. On the other hand, given that the opportunity is nearly-risk-free, it seems too good to be true and impossible to compete with large banks / HFT. Obviously, one would need to have low commissions and a broker which treats options assignment / exercise the same as trading a stock. Does anyone on here do this for a consistent, small, but almost risk-free arbitrage profit?
Conversion / Reversal Strategy for Retail Trader
- Thread starter ET180
- Start date
As a conversion order? No. Trade the conversion via a covered call? OK, say you sell vol well in the call and then buy the put. Why not simply cover the CC at a profit -- zero utility in the conversion in that case. So no, there is no strategy to leg it. Carry on HTB reversals can/will change and you can blowout.
Let's say someone here has tickers that they babysit for reversal opportunities. They would have to be brain-dead to tell you where to look.
Are you just bored and feel like posting?
Let's say someone here has tickers that they babysit for reversal opportunities. They would have to be brain-dead to tell you where to look.
Are you just bored and feel like posting?
what consistent small but almost risk-free arbitrage profit can you lock in? Do you fund better than the OCC? Are your borrow rates better than the banks with custodian businesses? Do you have commission rebates like the market makers on the Philly or PCoast?
Borrow rates are implied in the options market. So you would be aiming to earn 25bps-40bps/year less commissions.
This is Elite Trader!!!!!!! Roar!!!!!
He would beat most of the guys on here.
