if i had 10 cents for every arb I've seen...

MrMuppet said:
I admit, retail punters will never get access to loans like that, because they are not big enough, not connected enough and don't treat trading as a business (-> no idea why and how to make money, no business plan, not full time). So from a retail perspective 100m seems a bit steep
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Dude. Major Brad Pitt/"Big Short" energy here, laying down the real story to enthusiastic but seriously under-informed newbies. (Yes, it's a compliment. :))

I, for one, am seriously grateful for these glimpses into how the pros do it. I may never get a chance to build a trade of that sort myself, but it all gets folded into context for what I do trade. Thank you.
 
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delta_1 said:
For those who didn't know:

You can borrow cheaply by emitting a "synthetic bond". There is an options position that will allow you to get close to LIBOR rates explained e.g. here:
https://docplayer.net/37966608-Box-...strategies-for-borrowing-or-lending-cash.html

You will have to post at least 2% margin depending on your broker.
The money you will get is part of the margin and can be used to finance something else.
While this is very cheap it can not be done with every broker. The margin required can change quickly which can lead to sudden death...

The discussed trade was this: borrow cheap and invest in higher yielding security
I am pointing out how the cheap borrowing could be done.
I am not suggesting to take on more credit risk, ignore the interest rate risk or any other of the many possible fallacies.

What MrPuppet mentions: "Robin Hood Box Trade"
A guy did that on Robin Hood. Initially it worked as he could borrow. RH had a software bug and didn't compute any margin for it. So he could put on many more boxes and borrow virtually unlimited. RH fixed that bug but the box trade still works and would save retail traders millions in margin loan interest payments if they knew it.

Not every broker will allow to put it on. Never do it with american options! Never try it if you don't understand every aspect of it!
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The issue with american style exercise boxes is the early asignment and that's what 1r0nyman did.
He put on an insanely leveraged box spread with american style options and POSTED IT ON REDDIT :banghead::banghead:

The thread got a lot of attention and most likely one guy who had taken the other side of the trade simply exercised his long call, knowing that this will blow up the position.
Since he's retail RH had to handle the position which means that they probably bought back his shorts as a packet and drove up the price so the exerciser could liquidate his long stocks into it. 250.000$ notional in UVXY is not really big but big enough to move the market a little

The MM probably didn't even have to hedge delta and bucketed the trade into their global book. For them it was a nice little chuckle, I guess.

I mean, when you're stupid enough to post your position in public you shouldn't be puzzled when someone kicks you in the nuts and takes your money.
Once @JackMorgan starts to trade real money and keeps posting here, he'll be in for some nasty surprises ;)
 
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The fat man claims $17.46 per share p&l on aapl today. it had a $3 range. and very little vol.
lol, they must be using the new math

the muppet posts his p&l using this method , no ?
upload_2022-8-8_15-41-25.png
 
we did take off the 171 short at 166 , nice $5 win .
sorry to interrupt your chatter with actual trading ideas


upload_2022-8-8_15-45-26.png
 

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muppet = "I mean, when you're stupid enough to post your position in public you shouldn't be puzzled when someone kicks you in the nuts and takes your money."


ahhh, so thats why you never post any trades. you're worried GS will target your 100 shares of that $1 meme stonk
 
RAES-arb in COMS/PALM spinoff in 2000-2001 (and other tickers). Peak PNL was 1.4 for the day, automated. Putnam at Terranova was making 5-10 on some days in his wife's account.
 
the palm trade was sick.

i had ipo shares of that turd, and got screwed trying to sell at 140.

wound up taking much less but still over $100 which was a lot more than the ipo price
 
JackMorgan said:
we did take off the 171 short at 166 , nice $5 win .
sorry to interrupt your chatter with actual trading ideas


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I don't know who you're talking to. I'm probably the only one here who doesn't have you on ignore and doesn't block out your bullshit :D

Nice after the fact trade again by the way...you copy those chart pictures from twitter?
 
i see you give yourself an out that it has to be on 1000 shares.

take a hike , clown

lets keep the comments to 20 year old trade, shall we

this way you dont have any skin in the game
 
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