Credit spread 1:1

[wxytrader]

Knowing that… what do you do with it? You’re only going to short slightly otm cs?

Short otm cs and dynamically hedge shares?

Short the cs, buy the ps and buy 11 SPY to be neutral in time? All of this sht is artifact of a vol-skew. Welcome to the 20th Century! Let us know when you accumulate enough to cover that $300 in losses from the binary thing. We’ll all be slaves of our AI-overlords by then.

I don't trust the derivative market any more than I trust the real market. My strategy is to piggyback on the corruption.

 

[destriero]

I don't trust the derivative market any more than I trust the real market. My strategy is to piggyback on the corruption.

You ignore skew and the forward and call it corruption. May as well call it magic as you're in no way able to monetize it. It's artifact of institutional hedging bc markets weren't corrupt prior to 1987.

 

[wxytrader]

lol read your opening post.

I edited my post after I thought about it lol.

Wait, so I have just illustrated the volatility smirk with my example? The reason that short calls will out perform long puts is that by nature puts are more expensive so you lose when purchasing them, that and the time decay favouring the short calls. In otherwords, the short call will lose more value than the long put gains in a downturn, and it will gain less value than the long put loses in an uptrend?

This reminds me of:

Bilbo: "I don't know half of you half as well as I should like, and I like less than half of you half as well as you deserve."

 

[wxytrader]

You ignore skew and the forward and call it corruption. May as well call it magic as you're in no way able to monetize it. It's artifact of institutional hedging bc markets weren't corrupt prior to 1987.

I am really just referring to predictive price patterns.

 

[destriero]

I am really just referring to predictive price patterns.

lol.