Is this arbitrage?

[engineering]

I don't fully get your example, but how possibly could you buy an ITM call for cheaper than the stock?

As I read this, he sold a call rather than selling stock he already held.
Assuming the stock gets called away he accomplished the same as selling the stock, but at a better equivalent price.

I've been resisting trading options so far but this is a case that makes me re-think that. I'll often have standing buy of sell orders a ways away from the current price.

Robert Morse mentioned selling options in a few other threads and perhaps it worth more consideration.

 

[wxytrader]

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.

How is that not intelligent? You'd rather realize a loss? That's not intelligent... the object of this game is to realize gains not losses.

Don't they say less than 1% of traders make money? And wouldn't you say that probably 99% of traders don't trade like me?

 

[AKJ]

t

How is that not intelligent? You'd rather realize a loss? That's not intelligent... the object of this game is to realize gains not losses.

Don't they say less than 1% of traders make money? And wouldn't you say that probably 99% of traders don't trade like me?

treating realized and unrealized PnL as different is a one-way ticket to bagholding. That's the last thing I'll say in what I hope is the stupidest discussion I'll have to partake in this week.

 

[cesfx]

LoL

 

[wxytrader]

t


treating realized and unrealized PnL as different is a one-way ticket to bagholding. That's the last thing I'll say in what I hope is the stupidest discussion I'll have to partake in this week.

I'm not treating them as different...I'm treating them as the same!

 

[newwurldmn]

Do you have Manatees just randomly pick balls with financial words on them to construct your replies?

 

[wxytrader]

As I read this, he sold a call rather than selling stock he already held.
Assuming the stock gets called away he accomplished the same as selling the stock, but at a better equivalent price.

I've been resisting trading options so far but this is a case that makes me re-think that. I'll often have standing buy of sell orders a ways away from the current price.

Robert Morse mentioned selling options in a few other threads and perhaps it worth more consideration.

Exactly ! If you're going to buy stock you might as well sell a put, and if you're going to sell stock you might as well sell a call and get paid for it.

To use your example if you're going to place a limit order OTM, you can just sell a call at the money or whatever the equivalent pnl and you're getting the same result with the added benefit of the stock finishing OTM so you can do it again. You could literally get paid two or three times to sell your shares lowering your break even and raising your pnl every time.

I got assigned @ 23 and the premium I received brought it down to 19.75... so the premium essentially acts like a synthetic stop-loss where it adds protection to the downside, but you don't have to realize a loss...that's my motto, Unrealized losses are for bosses...

 

[MrMuppet]

let's wait until he figures out that stock purchases can be cheaper by selling puts. He might reinvent the wheel XD

 

[Sergio123]

As I read this, he sold a call rather than selling stock he already held.
Assuming the stock gets called away he accomplished the same as selling the stock, but at a better equivalent price.

I've been resisting trading options so far but this is a case that makes me re-think that. I'll often have standing buy of sell orders a ways away from the current price.

Robert Morse mentioned selling options in a few other threads and perhaps it worth more consideration.

C'mon now....What kind of engineer are you?

When I first started, I went down the path of studying Black-Scholes, probability distributions, and Brownian motion before I got into standard TA.

 

[wxytrader]

C'mon now....What kind of engineer are you?

When I first started, I went down the path of studying Black-Scholes, probability distributions, and Brownian motion before I got into standard TA.

Both should be combined.