New invention for the derivatives market - How to profit of it?

[thecoder]

Are you gonna use your alternative delta for hedging it?

Yes, of course, as it fits wonderfully

 

[thecoder]

1. I think publishing a paper would be a good choice, maybe even partner with someone who already published one. If you really invented something useful then you should get job and business offers, even if it’s a job first and a business later, maybe also some speaking engagements.

Yeah, that's indeed a very good idea, thx. So, with this product idea in my pocket I can offer it to the companies and also apply for a good job position in the finance world (btw, I haven't worked for others in the finance world yet, just for myself as a little trader).

2. Listing an alternative product to options may not attract customers. OneChicago has been promoting single stock futures for many years, but you probably never heard of them. While most traders, quants, developers and funds invested many years and dollars into learning, analyzing and backtesting options, including developing various libraries and toolkits for it.
Your proposition may require $billions in investment from thousands of organizations across the world, and abandoning profits that they are making from trading options.
Actually anyone can say “trading without HFTs and without front-running is better”, but so what? Trading firms are fighting to protect their profits from market flaws and inefficiencies...

As said, this new trading vehicle does not necessarily replace the current ones (though it very well can ).
So, it's an alternative to current ones.
If people see the maths behind it and its advantage then I'm sure this one will win the hearts of the traders by storm, and quickly overtake the currently used one.

 

[SunTrader]

Was thinking he came up with “options for options”. Always figured that was the next step.

Like options on futures. You got a derivative on a derivative.

Uhhh something tells me its not that ummm sophisticated. A futures on options maybe. Huh? Wait a sec - where is that patent office located?

 

[Overnight]

Fyi: "financial instrument" in this context means of course an option contract type, like CALL and PUT; the new one is just another similar one.
Ie. it's not something like a new index product like an ETF or so.
It's a new option type, similar to CALL and PUT, but of course different.

Let me guess. Something like a PALL. A hydrid between a put and a call, where you are entering a spread but with one single contract, at same expiry and strike, with some sort of offsetting premium v. cost.

 

[thecoder]

Was thinking he came up with “options for options”. Always figured that was the next step.

Like options on futures. You got a derivative on a derivative.

No, it's not "option on option", though that idea is cool as well

 

[xandman]

Yeah, that's indeed a very good idea, thx. So, with this product idea in my pocket I can offer it to the companies and also apply for a good job position in the finance world (btw, I haven't worked for others in the finance world yet, just for myself as a little trader).



As said, this new trading vehicle does not necessarily replace the current ones (though it very well can ).
So, it's an alternative to current ones.
If people see the maths behind it and its advantage then I'm sure this one will win the hearts of the traders by storm, and quickly overtake the currently used one.

File a patent and then send your white paper to Bluford Putnam at the CME. He is the Chief Economist. His team provides that intellectual backing for every product the CME Marketing team dreams up.

To make the idea fly, you will need both groups. It's what they do. And yes, they have considered everything including the 6 minute abs.

 

[Dazz]

so let me guess: no data on your new invention, no one can see it, and it does not have a name. Let us call it SCAM 007 for now, good?

 

[xandman]

The guy could be the long awaited "second coming" of Leo Melamed. That means exchange Chairman and Chairman Emeritus until death. Maybe a Nobel Prize.

I would rather make gazillions trading to the model with synthetically equivalent positions.

He is holding his cards close to his chest.

 

[Dazz]

Ever heard some say about someone smart: "he could be the next Einstein"? There has never been a 2nd Einstein or even close; no exchange Chairman and Chairman Emeritus until death. Maybe a Nobel Prize, just nothing and hot air. Long live Scam 007 in the smallest minds we have.

 

[guru]

so let me guess: no data on your new invention, no one can see it, and it does not have a name. Let us call it SCAM 007 for now, good?

Why would it be a scam when he doesn’t need you? Do you feel scammed? And no one needs to see it, just like no one sees my trades or your trades. In fact, indeed he shouldn’t show it to anyone until he has a patent filed, or decides to publish without it if cannot afford it.

@thecoder , maybe look for some comparable patents that can be adapted.
Options are too old to be patented, but you could find some options-related patents, and maybe VIX patent could be adapted:
https://patents.google.com/patent/US20150039532A1/en