The FairPut Initiative

[Pekelo]

I repeat the question: You are saying the puts should be priced the same as calls, but how do you know if they are too cheap or calls are just expensive? Maybe the calls should be lowered, not the puts raised.

Hi Pekelo, have you ever heard of mathematics, probability, and logic?

Weren't they the 3 Stooges?

 

[destriero]

Hi Pekelo, have you ever heard of mathematics, probability, and logic?
The pricing model must be consistent in itself, ie. IMO it can be verified with its own methods, so to say.

BSM puts a volatility figure on a premium value. The edge is not in the relative value, per se, but predicting the shape of the forward curve as price moves. For example; there is edge in buying upside calendars/diags/calls in a high (put) RR-figure. You don't know why bc you're an idiot, but replacing BSM is a solution in search of a problem.

Applying the model consistently is all you need to do. Sure, stuff under a buck suffers from microstructure, but BSM "has no hair." It's perfectly suitable for anything you would do with any size you would like to trade.

Again, stop what you're doing and read... and stop posting.

 

[thecoder]

I repeat the question: You are saying the puts should be priced the same as calls, but how do you know if they are too cheap or calls are just expensive? Maybe the calls should be lowered, not the puts raised.

Nope, you just misinterpret the said stuff.
Calls and Puts can have different prices, but the payout must be equally proportional.
This is best to understand when Call and Put have same initial premium. But it works also with different premiums (ie. due to different strike)...

 

[thecoder]

Hey folks, please beware: this journal & discussion is not about trading strategies or specific option strategies.
This is so to say just an academic research on developing a fair and consistent options pricing model. Nothing more, nothing less.
So, please move discussions about trading strategies out of this area. Thx.

 

[destriero]

Nope, you just misinterpret the said stuff.
Calls and Puts can have different prices, but the payout must be equally proportional.
This is best to understand when Call and Put have same initial premium. But it works also with different premiums (due to different strike)...

Wrong (=proportion). I am done here. I'd ask to make a mkt for you, but you're broke AF. What is it with eurotrash and delusions of grandeur?

 

[thecoder]

@destriero IMO 95% of your postings here so far have been off-topic.
Please change that, or leave this journal.

 

[destriero]

Wrong (=proportion). I am done here. I'd ask to make a mkt for you, but you're broke AF. What is it with eurotrash and delusions of grandeur?

There is no topic.

 

[thecoder]

@destriero said:
Wrong (=proportion). I am done here. I'd ask to make a mkt for you,

Fine! Just bye bye! Hope never to hear of you here again as you can nothing but being off-topic and insulting!

 

[Pekelo]

Calls and Puts can have different prices, but the payout must be equally proportional.

There is no such a thing since the selling of the option can be based on lots of things (stop loss, news, chart, strategy,etc) So the statement is just plain silly.

 

[traderjo]

Hey folks, please beware: this journal & discussion is not about trading strategies or specific option strategies.
This is so to say just an academic research on developing a fair and consistent options pricing model. Nothing more, nothing less.
So, please move discussions about trading strategies out of this area. Thx.

Ok so one more time from the end user point of view
If current method put assuming ES is @3000 a 3000 strike , 1 day left for expiry ATM PUT costs 10 points
-what would your Fair PUT cost?
- and would there be a difference in Delta?
as a end user that is all I want to know rest is futile