Research: new option type "Chameleon option" :-)

To reiterate the arbitrage stuff:

Since FairPut costs the same like a Put, then it has at any time the same value much like a Put
as far as the option parameters spot, volatility, risk-free rate and dividend rate stay constant.
Any change in these params means justly earned gain or loss, and not any arbitrage.

So, arbitrage with FairPut is not possible! Q.E.D.
 
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@thecoder — you win... you the shit.. the know all.. and we all are just dumb and blind enough not to see the light and smart shining out of your head ... and I really want to add my thanks for your saving us from the flawed BSM ... what’s left for you to do is to get some big finance firm like GS to fund your idea and make you a millionaire... so you did it.., no need for you to continue and argue/prove your invention..
 
Stamamarti said:
@thecoder — you win... you the shit.. the know all.. and we all are just dumb and blind enough not to see the light and smart shining out of your head ... and I really want to add my thanks for your saving us from the flawed BSM ... what’s left for you to do is to get some big finance firm like GS to fund your idea and make you a millionaire... so you did it.., no need for you to continue and argue/prove your invention..
More...
It's not primarily about profit, but about intellect... :)
 
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You're debit on both counts, Junior.

You first fairput threads died a fiery death when it was shown your dumb shit would be arbed out of existence. Now run along and fetch mommy her BBD.
 
thecoder said:
It's not primarily about profit, but about intellect... :)
More...

So you have just admitted that your idea is not about developing some new formula for options to help people make money, but rather to show you seem to have some basic grasp of maths which have variables in them. Like primary school algebra.

Well, you definitely win then on that front. You have proven over and over again that you can plug in arbitrary numbers for variables. Like paint-by-color. Very sophisticated.

Like how your new Chameleon option was supposed to be something brand new, yet you revert back to the FairPut thing. That's truly a chameleon all right. The same thing in different-colored clothing.

Stop trying to re-invent a wheel that is already round. You cannot make it more round.
 
destriero and Overnight,
FYI: the FairPut idea was right from the very beginning! But in the old thread I unfortunately had lured myself into some bogus and wrong argumentations about alleged arbitrage. That's the fact: never believe such liars like @destriero and @VolSkewTrader who just can yell loud and endlessly, but can't admit when they are proven wrong. These guys have some serious human deficits, they are not honest, no gentlemen. Never mind, they are unimportant, simply forgetting and ignoring them and carrying on...

Those two dummies will talk of arbitrage endlessly even after proving it that there is no arbitrage at all. That's the way their sicko minds works to impress other poor followers of them.

And regarding the fate of the Chameleon: it's not decided yet :)
As it looks like it would be useful for the trader only (ie. just one option type instead of two options to manage), and the broker would have to manage it for the trader... As said, this is just another idea, not ripe yet, not fully tested yet, and has a low-priority on my list.

Stop trying to re-invent a wheel that is already round. You cannot make it more round.
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Man, are you blind? I've shown bugs in BSM and have invented a replacement for it called FPM. This is independent of the FairPut option type for both BSM and FPM. Just check my journal https://www.elitetrader.com/et/threads/the-fairput-initiative.349291/
 
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As was pointed by @Kevin Schmit out earlier in your original post, where you admitted defeat and accepted your inferior intellect:

"If the put payout is unfair compared to the call payout, why does long stock plus long put replicate the [same strike] call payout?

....to be clear, if a fairput has the same price as a standard put, no one will buy the standard calls as they would get a better payout than the call with long stock and long the put. Similarly, just banning the standard puts on your exchange will do you no good, as people will just replicate the put with the call plus short stock, and arb that synthetic standard put against the fairput."

[+ 1 FairPut + 1 spot] > [+1 BSM Call]

[ -1 BSM Call + 1 spot] > [- 1 FairPut]

[+ 1 BSM Call - 1 spot] < [+1 FairPut]

Riskless arbitrage, Algernon. They must have kicked you out of Hitler Youth Camp. Would explain everything.
 
@VolSkewTrader, you all incl. @Kevin Schmit, are simply wrong!
There is no arbitrage at all! Even if you repeat it endlessly like a dumbo.
You have to question yourself, man, as you are clearly not fully understanding this options math and strategy and synthetics and arbitrage stuff.

And: This very thread about "Chameleon" was not intended to discuss FairPut.
Discussions about FairPut should be posted in my journal titled The FairPut Initiative.
Please respect this!
 
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