help creating this

[realgambit]

Can you create this with a 1-2 yr leap?

no leverage on returns just one for one. seems like a straddle but once stock is down > 25% you begin to start losing 25%+

 

[magicz]

Quote from realgambit:

Can you create this with a 1-2 yr leap?

no leverage on returns just one for one. seems like a straddle but once stock is down > 25% you begin to start losing 25%+

thats almost a broken wing butterfly its not possible to have that kind of broken wing on one side.

 

[newwurldmn]

School project?

Buy write with a knockout put.

Make that two knock out puts.

 

[spindr0]

I think you could do a better job of creating that by using Microsoft Paint.

 

[realgambit]

newwurld.

Thanks for the reply, I didn't know what a knockout put was until you posted. Where can you buy those, if at all, look like they are all OTC and maybe institutional?

Also why two knockout puts and not just one?

Thanks again.

 

[newwurldmn]

Quote from realgambit:

newwurld.

Thanks for the reply, I didn't know what a knockout put was until you posted. Where can you buy those, if at all, look like they are all OTC and maybe institutional?

Also why two knockout puts and not just one?

Thanks again.

You need an isda to buy a knockout put. So it's only institutional.
Two knockout puts: one to neutralize the long stock and one to make money on the downside.

 

[magicz]

Quote from newwurldmn:

You need an isda to buy a knockout put. So it's only institutional.
Two knockout puts: one to neutralize the long stock and one to make money on the downside.

come on let him borrow a few hundred million.

 

[urrterrible]

How do you guys know this stuff?

Thanks for the help.

 

[newwurldmn]

If you trade derivatives at a bank you will see these types of products.