Does this strategy have a name?

J

Johnmaine

What is this risk-free strategy below called, by the way? Does it have a name?

"Here is a recommendation we gave for the stock AXON recently, when it was trading at $14.94.
  1. Buy AXON strike price 12.50 call expiring Aug 18, 2017
  2. Buy AXON strike price 5.0 put expiring Aug 18, 2017
  3. Sell AXON strike price 15.0 call expiring Dec 15, 2017
  4. Sell AXON strike price 12.50 put expiring Dec 15, 2017
if the stock drops to $0 we have a profit of $330 and if it goes up to $60, our profit is $1,004. The only time we make a smaller profit is when stock remains flat."
 
I would say it's a 5-15 risk reversal hedged with a long synthetic in the 12.50 strike.

EDIT... scrap that.. didn't see the difference in maturities :D... I need a holiday (again)
 
Attempt #2 - It's (likely) a long gamma, although it depends on IV at this time... maybe the front position doesn't have anything left. Definitely short vega spread. And long delta. No name for it... and it's not risk free... can we quit the risk free thinking? It's never risk free....

"Even though the risk is $0, we tell our clients to assume it be about $200 to account for any uncertainties" :D:D:D:thumbsdown:
 
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Also... this:

"We picked up a stock whose March 17th weekly call and put options can be bought at a relatively lower price than the ones for March 10th which can be sold at a relatively higher price. In this case we bought the calls and puts which expire on March 17th"

Is very short sighted... it would completely depend on the actual prices traded. And again, those are not provided by the writer. Definitely not risk free... although it could be a good strategy, not without risk.

source: https://drsinghoptions.com/risk-free-strategy/

IMO, Dr and PhD are very overrated in actual trading conditions... usual they miss some real-life issues. Lending, dividends... some corporate action. I would take anything this Dr says with a few grains of salt.

That entire website screams SCAM
 
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losingtrader27 said:
how about Kim Klaiman https://steadyoptions.com/ ?
More...

I think his strategies are more realistic, he doesn't throw the term "risk free" around. That make him more reliable... I think anybody that says some or any of their strategies are risk free is bullshitting, and Kim doesn't do that...

I do have a different viewpoint then him about certain things, but in general his ideas are doable.
 
I'm not even sure if there's a strategy behind this.. it's much too complicated with the different expiry.

Johnmaine said:
"
if the stock drops to $0 we have a profit of $330 and if it goes up to $60, our profit is $1,004. The only time we make a smaller profit is when stock remains flat."
More...

No, worse case is stock flat until long options expire and then moves rapidly in either direction. Unlimited losses in fact are possible if it surges upward.
 
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