No-Risk-of-Capital Trading Strategies
- Thread starter riskfreetrading
- Start date
Quote from IV_Trader:
Itâs practically the same ; you just have to read between the lines and use a bit of imagination
Whatelse are you keeping from us IV_trader?
Why you don't explain to the folks here in detail what you believe was leacked, otherwise you may risk to be seen as someone who takes and does not give back enough.
Atticus point (as I understand it) is that the money is made not because they mis-priced stuff, but precisely because they price them right. So, they price them right, but one can still "mis-use" them in the sense of using them not as originally intended when these components were priced. So the whole can be worth more than the sum and differences of the parts. One then pockets the difference between the whole and the sum/diffs of the parts.
Note that the above does not exclude both dealers to make money while atticus is making money at the same time. win/win/win is possible.
PS: What I will write is aimed at no one individual. I think that we should not involve in these discussions the question of ego. Atticus is contributing a lot. He did not insult anyone in this thread. Even it he were to show ego, so what? Notice that there are people here who insult out right, did not contribute much of value, and were not criticized. Therefore, I think that we should thank anyone who contributes positively, and leave the question of judging ego or all of that on the side. These people give and do not expect anything in return. So let us appreciate all of what they contribute.
I'm going to take a stab and say derivative?
deviation. first and second standard deviation.
Quote from riskfreetrading:
Atticus: you are extremely smart. I think I have an idea of what you are saying. Essentially, you are taking free the difference between the value of being european and the value of being american.
The name of the game is then: there is value in being american more than in being european. So, you buy as european thing and sell it as american, and pocket the difference (without moving anything between europe and america.)
I play something similar in a particular stock index, but I like better what you are doing as it seems to me that currencies offer better leverage, and also have the exotics which seem to offer a smoother implementation of these smart ideas.
PS: Do you manage money Atticus? If you do not, I think it is a waste for others not to seek your expertise.
I assume here when talking about european vs american that you are talking about expiration style. It would be helpful if you guys would explain this. Not everyone who reads these boards understands all the lingo. This is a brave attempt at translating though somewhat like the dead sea scrolls.
Dimension[ality]; with respect to duration. Don't bother trying to get the trade vetted. The arb was traded flat as of mid-Friday as someone had an "Oh Sh*t" moment. I found the arb in mid-Jan and the return has been on the order of 300% net of replication. I'll provide screenshots at a later date.
atticus, are you constantly on the hunt for these type of arb plays or did you stumble upon this one?