analyze this trade

Discussion in 'Options' started by buybig, Apr 3, 2008.

  1. buybig


    havnt put it on and wont on this stock..

    but like the idea..

    what you guys think?
  2. buybig


    no comments?

    stupid concept?

    most people like to trash stuff..

    nows your chance

  3. You can get into the exact same position using a double diagonal and modifying the strike to be the same as what you have shown. The key differences will be that the DBL consists of 2 calls and 2 puts and your trade is 4 calls, your trade will yield a small credit where the DBL is a debit trade. Both take up about the same margin and have similar deltas.

    I guess they key would be to assume different stock prices near expiration and figure out what would happen if your May options got an early execution. Then compare that to the DBL. I don't have time right now or I'd do it.