Liquid options with low spread

[fullautotrading]

If both calls and puts are sold deep in the money it is synthetically the same as selling otm calls and puts ie strangle. The spread for that strangle is going to be alot tighter than the itm spread you are suggesting.

that is right (example with current values, spread value for 1):

ES FOP 20230519 3900 C CME 50 E-mini S&P 500 [EW3K3 C3900, 557297895, mult: 50] ITM $ 112
ES FOP 20230519 3900 P CME 50 E-mini S&P 500 [EW3K3 P3900, 557297927, mult: 50] OTM $ 75

ES FOP 20230519 4100 P CME 50 E-mini S&P 500 [EW3K3 P4100, 557297707, mult: 50] ITM $ 62
ES FOP 20230519 4100 C CME 50 E-mini S&P 500 [EW3K3 C4100, 557297890, mult: 50] OTM $ 37.50

payoff (OTM, same as ITM version):

 

[statist]

Are taxes optional where you live now? I gotta move.

A lot of jurisdictions have no capital gains tax, some even no income tax(panama, Bahamas, Dubai,UAE, Malaysia, Thailand, Philippines etc). Of course you have to live there then. However if you are a US citizen or have a green card there is no escape other then renouncing your citizenship. I think there is a 100K Limit for the US citizens, if you earn under 100K per year and live in another country you do not have to pay the (additional) US tax if your tax load is lower in the other country.
Lots of people in Europe are currently "escaping" their tax regimes and go live somewhere else or travel permanently. If you move between jurisdiction there are some interesting options (pun intended). All this is perfectly legal if you follow some ground rules and really live in those tax friendly countries.

 

[statist]

that is right (example with current values, spread value for 1):

ES FOP 20230519 3900 C CME 50 E-mini S&P 500 [EW3K3 C3900, 557297895, mult: 50] ITM $ 112
ES FOP 20230519 3900 P CME 50 E-mini S&P 500 [EW3K3 P3900, 557297927, mult: 50] OTM $ 75

ES FOP 20230519 4100 P CME 50 E-mini S&P 500 [EW3K3 P4100, 557297707, mult: 50] ITM $ 62
ES FOP 20230519 4100 C CME 50 E-mini S&P 500 [EW3K3 C4100, 557297890, mult: 50] OTM $ 37.50

payoff (OTM, same as ITM version):

View attachment 299972

Will study your great post in depth tomorrow much obliged! Any way to see past option prices in depth? Yahoo and IB is just giving me crap numbers for the past regarding options pricing and I do not have access to a Bloomberg? I am currently in a really bad timezone to check RT prices in the US. Are options in Europe an alternative? My gut feeling tells me no, as the US is way ahead in my understading? Thanks!

 

[spy]

I appreciate the information, thanks. That said... I was primarily engaging the daft knave who thinks taxes are somehow "optional" in a Socratic dialogue. Of course, based on the response I got, it was probably a waste of my time

A lot of jurisdictions have no capital gains tax, some even no income tax(panama, Bahamas, Dubai,UAE, Malaysia, Thailand, Philippines etc). Of course you have to live there then. However if you are a US citizen or have a green card there is no escape other then renouncing your citizenship. I think there is a 100K Limit for the US citizens, if you earn under 100K per year and live in another country you do not have to pay the (additional) US tax if your tax load is lower in the other country.
Lots of people in Europe are currently "escaping" their tax regimes and go live somewhere else or travel permanently. If you move between jurisdiction there are some interesting options (pun intended). All this is perfectly legal if you follow some ground rules and really live in those tax friendly countries.

 

[fullautotrading]

Will study your great post in depth tomorrow much obliged! Any way to see past option prices in depth? Yahoo and IB is just giving me crap numbers for the past regarding options pricing and I do not have access to a Bloomberg? I am currently in a really bad timezone to check RT prices in the US. Are options in Europe an alternative? My gut feeling tells me no, as the US is way ahead in my understading? Thanks!

crap numbers ?

I am currently connected to IB and receiving real-time quotes for any instrument (I am in Italy).

For instance, this is ES FOP 20230519 4100 P CME 50 E-mini S&P 500 [EW3K3 P4100, 557297707, mult: 50] (a PUT option strike 4100 at CME, spread value $75) (real-time tick data of about the last 7 hours, as they trade practically H24, apart from brief daily maintenance):

You can also request the historic quotes, of course, which are fine (shown above, as I refilled the chart with them, and they overlap perfectly with the real-time data).

 

[statist]

Thanks for your post! My data is useless, I am not seeing anyting remotely similiar, I am seeing one bar every hour. Checked my data subscription and now got

CME Futures Level 1 and 2 for Display on Trading Platform. Examples - ES, NQ and HE.

That the one I should have? Updated my data subscription but maybe will see only data from date of change up to now only bars . Thanks!

 

[TheDawn]

Guys this is a serious question. I fully understand it looks very unprofessional but trust me it is not, it is related to estate planning for a client and has tax implications. I was hoping for a serious responses instead replies like on WSB show up.

Thanks!

Just ignore the trolls here. You can actually click on their names and then click on the link called "Ignore" to put them on ignore and you won't see their posts anymore. This forum really does get a lot better after you've put a couple of them on "Ignore". We all have to do that from time to time unfortunately.

Ok back to your question.

First, can you elaborate more on what do you mean by "market neutral"? Are you looking for securities that do not react a lot to the market or securities that do well in all markets?

Second, with regards to the type of securities, that would depend on the investment objective, risk tolerance as well as tax planning goals and age of your client. Criteria that your client set in these areas would determine what type of security(ies) is(are) best for your client. Are you an investment advisor? If not, I think it's best you consult with an investment advisor and perhaps involve him/her in your estate planning process with your client.

We can give you some ideas but it's best that you consult somebody who is maybe more qualified to answer your questions.

Good luck!

 

[TheDawn]

https://www.investopedia.com/terms/m/marketneutral.asp
Try not to spend too much time re-inventing the wheel kiddo.

I think it's time that I put you on "Ignore". I have had enough of your immaturity.

 

[fullautotrading]

Thanks for your post! My data is useless, I am not seeing anyting remotely similiar, I am seeing one bar every hour. Checked my data subscription and now got

CME Futures Level 1 and 2 for Display on Trading Platform. Examples - ES, NQ and HE.

That the one I should have? Updated my data subscription but maybe will see only data from date of change up to now only bars . Thanks!

I am not paying for any data. Just the free US bundle (waived). Top of the book.

Nothing fancy or special is needed. I am just using reqHistoricalData() for the historic data. But for your purposes, you do not need that. Just get the real-time tick data.

Don't get too fixated on the spread. That must the last of your concerns: it's not going to mean anything, in the big picture (once you choose ES). Just get the strikes you "strategically" need, at liquid hours. That is it.

 

[destriero]

A lot of jurisdictions have no capital gains tax, some even no income tax(panama, Bahamas, Dubai,UAE, Malaysia, Thailand, Philippines etc). Of course you have to live there then. However if you are a US citizen or have a green card there is no escape other then renouncing your citizenship. I think there is a 100K Limit for the US citizens, if you earn under 100K per year and live in another country you do not have to pay the (additional) US tax if your tax load is lower in the other country.
Lots of people in Europe are currently "escaping" their tax regimes and go live somewhere else or travel permanently. If you move between jurisdiction there are some interesting options (pun intended). All this is perfectly legal if you follow some ground rules and really live in those tax friendly countries.

Wait... tax avoidance? Wow, who knew?