My Options Play II

The "box spread":
- European-style options: the pay-off is the risk-free interest rate
- American-style options: the pay-off is a little better due to the risk of assignment
Quote from Multioption:

That's a good one....one more to go. :)
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Quote from Peppy:

How do you get a "box spread" fill ? I have tried this for several days and it never seem to get hit.
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You'll need to offer the MMer a +expectancy > the risk-free rate to see a fill. Conversions are similarly risk-averse, but involve a 3-way instead of the 4-way. It's a very difficult market to game -- there are fully automated systems that execute these w/o any human intervention with direct lines to the exchange.

There are some limited opportunities in hard to borrow short-stock reversals and an occasional mispriced arb due to merger complexities. By and large it's an academic exercise.
 
This was posted on another thread:
  • <table> <td vAlign="top" noWrap width="150" bgColor="#FFFFCC"><a name="post1063762"></a><a name="newpost"></a><font class="vb"><b><a href="http://www.elitetrader.com/vb/member.php?s=&amp;action=getinfo&amp;userid=44598" target="_blank">WD40</a></b></font><br>
    <font class="t2">&nbsp;</font><br>
    <p><font class="t2">Registered: Dec 2005<br>
    <a href="http://www.elitetrader.com/vb/search.php?s=&amp;action=finduser&amp;userid=44598">Posts:
    121</a> <p>&nbsp;</p> </font><!-- --> </td>
    <td vAlign="top" width="100%" bgColor="#FFFFCC" colSpan="2"><font class="t2"><img alt="New Post" src="http://www.elitetrader.com/vb/i/posticonnew.gif" border="0" width="10" height="11">
    05-07-06 <font color="#000000">07:27 PM</font></font><br>
    <p><font class="vb">maybe this can help<br>
    <a href="http://www.traderslibrary.com/tradesecrets/manuals/3342047.pdf" target="_blank">http://www.traderslibrary.com/trade...als/3342047.pdf</a></font></p> </td> </table>
 
lollol.gif

Multioption checking
his AMD trade.
 
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