The Most Important Lessons You Have Learned From Options

Quote from zdreg:

"The only free option I ever heard of was the mutual fund timing guys. Talk about real edge."

those were the good old days. most posters, because it is time past, are likely to be unfamiliar. why don't you describe the edge

Late trading of MFs after 4pm which reflected AH movement in futures.
 
Quote from drownpruf:
Late trading of MFs after 4pm which reflected AH movement in futures.
Quote from newwurldmn:
Some would trade early and then cancel if the after hours didnt go as planned.


So how would that work?

As an example would they buy GOOG calls before the market closes then if GOOG crashes in AH change the order to puts? :D
 
Quote from FXforex:

So how would that work?

As an example would they buy GOOG calls before the market closes then if GOOG crashes in AH change the order to puts? :D

Yeah. Exactly. Except they did it will real money and not fake one lots.
 
Quote from newwurldmn:

Yeah. Exactly. Except they did it will real money and not fake one lots.


Interesting .... So as tradingjournals stated in the first post there could be "free options in the real world".
 
Quote from FXforex:

Interesting .... So as tradingjournals stated in the first post there could be "free options in the real world".

Correct, but TradingJournals is wrong in the sense that, as with cocaine smuggling, it's illegal.
 
Another free option that is commonly traded are put/call rights in private transactions and partnerships.

They are free in the sense that two individuals will post the same proportion of money for equity in a private equity transaction but one will have put rights or call rights on the other.

It's done as a way to ensure liquity but keep the stock within the partnership.

So a PE shop and a strategic company buy another company, the PE shop will sell call rights to the strategic as an exit plan. The strike will be significantly higher than today's value imputing the return the PE shop wants.
 
Quote from drownpruf:

Late trading of MFs after 4pm which reflected AH movement in futures.

Remember when options were trading until 4:01 while some volatile stocks were reporting at 4:00 ?
I did few of these arbs before they moved the closing time to 4:00.
 
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