ATTN: another variant of FairPut will fix the classic PUT ! Still working on it.
@VolSkewTrader, as already said: you are talking BS as usual with your "negative stock prices" idiocy. I don't see any negative stock prices.
Q: Was (or is) this newly found flaw in the PUT pricing, the reason for many of the market crashes since 1973? A: YES! Especially those market...
Q: Does 'volatility smile/skew' exist also with FairPut? A: Yes, as it's caused by greed with big spreads in bid/ask for distant strikes
Let's see it this way: Say the CALL and PUT as we know and use today, exists since about 1973 when Black & Scholes published their paper. For 47...
IMO +50% / -100%.
Interesting scenario(s), indeed. IMO logically consistent, but I doubt the broker will accept this :-( Looks like a "chicken or the egg" causality...
Update3: when testing the above scenario for spot < K at expiration (for example spot 83.333333), then arb seems indeed possible: A long FairPut...
@Kevin Schmit, thx for the analysis, I'll respond later after testing your objection in practice. But just a minor correction: I meant: since...
Some changes in plan: - the code will be in basic C++ (using the GNU C++ compiler g++ on Linux), not C. - the code will be published at GitHub (...
Thx moderator, for removing the recent spam postings here.
@Hey destriero, you POS, don't spread lies here about me. Moderator, please take action against this liar.
FairPUT has always the same premium and the same payout of a CALL (be it long or short, respectively). I would say these facts even simplify many...
Announcement: The algorithm of FairPut will be posted here soon. It will be basic C code. I'll make it so that it will calculate all of CALL, PUT,...
@newwurldmn, does this answer your question? : Synthetic Short Put "A combination of owning stock and having a short call position on that stock...
I assume you mean the hedging an option writer usually does (or should do :)), right? Or do you mean hedging a long position? I must admit I'm not...
@MrMuppet, thx, I've revoked my posting. Sorry for the confusion.
I'm sure it can be hedged. There are many meanings of "hedging". I assume you don't mean Zero-Delta-Hedging, or do you? Can you please give an...
Moderator, please delete this thread. Thx
. My definition of FairPUT is that it's the exact mirror image of CALL.
Separate names with a comma.