So, I think I just created some stock option ALPHA for you guys...

[FreeGoldRush]

It won't simply churn out money. It's informative to study things like this but your real money making strategy will be something different.

https://www.math.nyu.edu/~avellane/Lecture10Quant.pdf

and this

https://blog.quantinsti.com/dispersion-strategy-correlation-stocks-volatility-index/

 

[TheDawn]

How am I wrong guys? Seems pretty legit to me...

You are not wrong except it's something that's widely known already and in trading, the only way to make money is by doing something that is not known. This is what everybody is saying. Nice discovery though. I am sure it will be a good strategy when done right.

 

[SoyUnGanador]

It won't simply churn out money. It's informative to study things like this but your real money making strategy will be something different.

https://www.math.nyu.edu/~avellane/Lecture10Quant.pdf

and this

https://blog.quantinsti.com/dispersion-strategy-correlation-stocks-volatility-index/

Wow. Just WOW. My intellectual prowess follows in the footsteps of learned scholars! I shall study those until I die FreeGoldRush, and thank you for proving I was right with my general concept!!!

 

[Overnight]

Option prices on individual stocks are going to be higher vis-a-vis- indexes because individual stocks are more volatile than the indexes, obviously.

So. Buy 10 QQQ options. Sell 10 options, one on each of the biggest QQQ stocks. (I'm saying 10 but it might be 7, it might be 12, you get the idea I'm sure.)

You will come out ahead given premiums on individual stocks will be much greater than premiums you paid on QQQs, and any risk of loss is pretty darned small given that 10 stocks is plenty sufficiently diversified.

YOU ARE WELCOME ET!!!!

Try it in sim next week, because it will be the biggest and best week to try it, what with 4-5 of the biggest QQQ stocks reporting earnings next week. Enter your sim trade on Monday for expiry on Friday, see how it works out on the weeklys.

 

[FreeGoldRush]

Wow. Just WOW. My intellectual prowess follows in the footsteps of learned scholars! I shall study those until I die FreeGoldRush, and thank you for proving I was right with my general concept!!!

All that matters is whether or not you have put the odds in your favor. The link to that paper I posted shows no such thing. You may want to read it carefully before you consider it to be something that supports your money making goldmine.

 

[Sekiyo]

Pure arbitrage!

Guess there’s something to do here

 

[taowave]

Trust me,in the Summer,its no better

i thought about ignoring him but his pollution is everywhere: like needles on the Jersey shore. The only solution is to go to the hamptons.

 

[newwurldmn]

Trust me,in the Summer,its no better

ha. I told you Manhattan when all those douchebags go to the beach!

 

[Global OptionsTrades]

How am I wrong guys? Seems pretty legit to me...

Just a suggestion, but have you considered thinking these ideas through properly, modelling, backtesting, paper-trading (*) etc before you launch them upon us all like an epiphany and wait for someone else to tell you why they don't work?


(*) you know, the things that traders do!

 

[Overnight]

Option prices on individual stocks are going to be higher vis-a-vis- indexes because individual stocks are more volatile than the indexes, obviously.

So. Buy 10 QQQ options. Sell 10 options, one on each of the biggest QQQ stocks. (I'm saying 10 but it might be 7, it might be 12, you get the idea I'm sure.)

You will come out ahead given premiums on individual stocks will be much greater than premiums you paid on QQQs, and any risk of loss is pretty darned small given that 10 stocks is plenty sufficiently diversified.

YOU ARE WELCOME ET!!!!

Have you started this experiment like I told you to do in sim on the Monday open?