Very high premium on ITM iron condor
- Thread starter aleshinsky
- Start date
Yeah, I understand that it is "risk free" as laid out - just saying that it might not be any better then the .05 at best, even assuming all numbers are correct. I guess just because it is laid out as being risk free, I tend to think there is something missing. Also remember that the quotes as I understand sometimes may only be guaranteed to be good for a 10 lot or maybe a 50 lot or maybe that changed, but the point being maybe only $50 can be made. I guess the only thing the OP could do is try.
JJacksET
I just did some looking around and I can't find what the stock or ETF would be.
If the OP is still here, is this really a trade that you did and can you let us know what it was? Also, were you able to do any kind of quantity of the trade for $105/credit?
I found a handful of stocks near 50.00, but mostly with $5 increments.
The exceptions where like QQQQ, which wasn't super close to $50.00 and were nowhere near $1 credit for a $1 strike position for May options. Maybe farther out ones? If only farther out ones would work, wouldn't that mean holding for a long time just to gain the .05? Maybe OK, but maybe not so great.
For the fun of it I looked at DNDN which is in the upper 30s but has $1 strike increments and is very high IV. There are no exactly ATM ones at close, but you can get about .70 credit for the closest Mays. Further out the bid/ask spreads seem to get worse, and you don't even get as much.
JJacksET4
If the OP is still here, is this really a trade that you did and can you let us know what it was? Also, were you able to do any kind of quantity of the trade for $105/credit?
I found a handful of stocks near 50.00, but mostly with $5 increments.
The exceptions where like QQQQ, which wasn't super close to $50.00 and were nowhere near $1 credit for a $1 strike position for May options. Maybe farther out ones? If only farther out ones would work, wouldn't that mean holding for a long time just to gain the .05? Maybe OK, but maybe not so great.
For the fun of it I looked at DNDN which is in the upper 30s but has $1 strike increments and is very high IV. There are no exactly ATM ones at close, but you can get about .70 credit for the closest Mays. Further out the bid/ask spreads seem to get worse, and you don't even get as much.
JJacksET4
Yeah, you're right, my aplogies.
In my defense I must say that I didn't ask HOW to achieve such positions but rather WHAT ARE the risk characteristics of them.
Somehow however the conversation got focused on the latter.
Perhaps it is not a surprise, you guys are a very analitycal bunch
I also should say that I stumbled upon this unwittingly.
Now, based on the consensus that this is a "good to be in" trade, I'm going to explore it more systematically i.e. trying to pick out such opportunities off of a day chart.
Thanks to everybody!
In my defense I must say that I didn't ask HOW to achieve such positions but rather WHAT ARE the risk characteristics of them.
Somehow however the conversation got focused on the latter.
Perhaps it is not a surprise, you guys are a very analitycal bunch
I also should say that I stumbled upon this unwittingly.
Now, based on the consensus that this is a "good to be in" trade, I'm going to explore it more systematically i.e. trying to pick out such opportunities off of a day chart.
Thanks to everybody!
The reason that repliers focused in on achieving such a position is that seasoned traders know that in order to get a risk free position, 1) you have to leg in or 2) something has been overlooked and you're in for a rude awakening when you find out what it is (non standard options, etc.).Quote from aleshinsky:
Yeah, you're right, my aplogies. In my defense I must say that I didn't ask HOW to achieve such positions but rather WHAT ARE the risk characteristics of them.
Somehow however the conversation got focused on the latter.
Perhaps it is not a surprise, you guys are a very analitycal bunch