lnkd put call parity out of wack

[sle]

Quote from FSU:
That customer is giving the extra money to the brokerage house who will loan it out for a fat profit.

Not true. If you own the stock, you will get paid the borrow, so there is no edge in trading a synthetic forward at all.

 

[m22au]

Quote from sle:

Not true. If you own the stock, you will get paid the borrow, so there is no edge in trading a synthetic forward at all.

In theory, a LNKD stockholder should get paid the borrow interest rate. However in practice not all brokers will pay this to the customer (or they might only pay a small fraction of the full borrow interest rate).

Hence why for some customers it makes sense to create the synthetic long.

 

[FSU]

Quote from sle:

Not true. If you own the stock, you will get paid the borrow, so there is no edge in trading a synthetic forward at all.

I have never gotten any money from being long stock. If you do I think your brokerage firm is unique.

 

[rew]

Quote from FSU:

I have never gotten any money from being long stock. If you do I think your brokerage firm is unique.

I do sometimes make money being long stocks. But just about as often I lose money doing the same. It's enough to drive a man to trading options.

 

[KPS21]

The borrow has loosened up considerably in LNKD. Still 20-30% though.

I am not aware of any arrangements for small traders that allow them to lend out the stock. Does anyone know a broker that pays a portion of the lending income to the holder? I figured that would only apply to very large accounts.

kps