How is this strategy possibly sustainable?

[destriero]

Looking at the chart I'm selling an ATM call spread if being aggressive versus any long put spread. This is just by eyeballing it...I might sell a put at the .50 fib retrace to start legging in too and take the stock but not this stock too pricey...usually just indexes. Anyway look at the range for 1 SD and tell me which side of the trade you'd want to be on , or chart the BE on buying a put or put spread to see the likelihood you'd be paying into Christmas charity for the big boys.

Fuck your chart, Bro.

The question posed was a random $10 move up or down.

 

[destriero]

Looking at the chart I'm selling an ATM call spread if being aggressive versus any long put spread.

Sidebar: No difference between the cs and ps.

 

[destriero]

You cannot judge value on same-strike cs/ps. They are equivalent. I didn't show the synthetic but it didn't make any difference. You don't understand any of this. You still believe short spreads are "better" because they are long theta.

The arb-condition results in *zero greeks outside of rho (*entry value on box). And that's meaningless as it's simply an opportunity loss.

Understand that you know less about this than a CBOE runner in his first week in the job.

 

[wxytrader]

View attachment 330365

You cannot judge value on same-strike cs/ps. They are equivalent. I didn't show the synthetic but it didn't make any difference. You don't understand any of this. You still believe short spreads are "better" because they are long theta.

Understand that you know less about this than a CBOE runner in his first week in the job.

Yes you have posed this question before about them not being different but they are entirely different due to the positive theta...perhaps you need to retrain your runners..

 

[destriero]

Yes you have posed this question before about them not being different but they are entirely different due to the positive theta...perhaps you need to retrain your runners..

They are not (different).

Buy the cs (bull) and buy the ps (bear) = box arb.
Buy the inside strangle (100C/140P) and short the outside strangle (100P/140C) = box arb.

If you're in one you can cover in the synthetic... the synthetic of the cs is the ps. It results in no greek exposure outside of impact to fwd rates (oppo).

The options are marked to the synthetic (shown in the pic) not the price of the share-actual.

 

[wxytrader]

They are not (different).

Buy the cs (bull) and buy the ps (bear) = box arb.
Buy the inside strangle (100C/140P) and short the outside strangle (100P/140C) = box arb.

The options are marked to the synthetic (shown in the pic) not the price of the share-actual.

I'm talking about selling the call spread versus buying the put spread are entirely different probabilities of profits.

Hey while on the subject of boxing....why is it illegal to box a stock position? Is it because then you could just sell premium on it with no risk?

 

[destriero]

I'm talking about selling the call spread versus buying the put spread are entirely different probabilities of profits.

Hey while on the subject of boxing....why is it illegal to box a stock position? Is it because then you could just sell premium on it with no risk?

I am talking about what makes them equivalent... and the result is that their greeks net to zero. Stop changing the subject and hit yourself.

The ps is not worse because it's short small theta. The arbitrage makes them equivalent. You're never going to get it bc your dumb and assume you're smarter than everyone because you conflate intellect with owning a 15yo peasant model exotic.

By the same reasoning Trump is a genius.

 

[destriero]

Synthetics have a ton of utility, not the least of which is to show you that you know nothing w/o an understanding of synthetics.

To quote a common tautology that is esp fitting here, "you don't know what you don't know."

Merry XMAS.

 

[taowave]

Dont you have OptionStrat???

Simulate both positions,i.e the call spread vs the put spread..

They will be slightly off due to bid ask spread (buying spread vs selling spread),but the graphs are identical as are the max risk vs return(adjusted for bid as spread)..

Why are you trading options vs the underlying?

I'm talking about selling the call spread versus buying the put spread are entirely different probabilities of profits.

 

[destriero]

I'm talking about selling the call spread versus buying the put spread are entirely different probabilities of profits.

Wrong.

One of the reasons (among others) is that you're looking at the share price and not the forward to Jan 19.

Listen to tao and simulate both.