Is this arbitrage?

W

wxytrader

MARA avg cost: 1500 shares @ 19.75
Sell at open @ 18.57 = loss of -1770

Or

Sell 15 AUG30 18 CALL for .93 = premium 1395
Adj avg cost: 18.80
@ expiry loss if itm: -.80 x 1500 = -1200

Did I not just arb myself 570? :)
 
In both cases, the outcomes involve risk and potential losses, which are not characteristics of arbitrage.

Arbitrage would require a guaranteed, risk-free profit, which is not the case here.
 
Sekiyo said:
In both cases, the outcomes involve risk and potential losses, which are not characteristics of arbitrage.

Arbitrage would require a guaranteed, risk-free profit, which is not the case here.
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Well profit is relative...it guaranteed me 570 less in losses which is essentially a profit when compared to the alternative of selling at the open.
 
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I don't fully get your example, but how possibly could you buy an ITM call for cheaper than the stock? A call is essentially a stock + put (ignoring interest, dividends, etc.), so your put is essentially negative if the ITM call + strike price is less than the current price.

So yes, definitely an arbitrage opportunity if the ITM strike + call is cheaper than the stock, but how could that possibly be?
 
this has got to be one of the stupidest fucking questions I have ever seen relating to options. No it's not an arb! In scenario 1, you are out of the stock and lock in a loss. In scenario 2, you could end up losing a lot more if the stock tanks.
 
AKJ said:
this has got to be one of the stupidest fucking questions I have ever seen relating to options. No it's not an arb! In scenario 1, you are out of the stock and lock in a loss. In scenario 2, you could end up losing a lot more if the stock tanks.
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Unrealized losses are not losses any more than unrealized gains are gains.
 
Actuarial_Fun said:
I don't fully get your example, but how possibly could you buy an ITM call for cheaper than the stock? A call is essentially a stock + put (ignoring interest, dividends, etc.), so your put is essentially negative if the ITM call + strike price is less than the current price.

So yes, definitely an arbitrage opportunity if the ITM strike + call is cheaper than the stock, but how could that possibly be?
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Selling an itm call...not buying
 
AKJ said:
Do you have Manatees just randomly pick balls with financial words on them to construct your replies?
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Lol it's a bit cryptic but sound. If you consider an unrealized loss a loss then that's the same as considering an unrealized gain a gain.
 
wxytrader said:
Lol it's a bit cryptic but sound. If you consider an unrealized loss a loss then that's the same as considering an unrealized gain a gain.
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Yeah, I understand what you're saying. I'm not an idiot. I just think the things you say are not intelligent.

Best of luck to you.
 
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