Free money option strategy - seriously 100% risk free

Discussion in 'Options' started by failed_trad3r, May 4, 2010.

  1. I just found a free money options strategy. 100% risk free, you won't believe your eyes.

    Lets say you have a stock trading at $20.
    Write a put against the stock, strike $45, and sell the option for $25. This way the option it right at the money.

    What do you guys think? A good strategy no? :D
  2. If you are psychic, it works. You have unlimited downside,

    How about buying 100 sh of xyz at 25$ and selling a 10$ call
    @18$. Anything above $10, you lock in the time value of 3$ as your profit (although actual time values are probably even smaller--but a profit is a profit, right?). Your break-even if the stock declines is 7$. Looks like a high-probability profit here, but an extremely small one. Instead of a near-month option, use farther-out options or even leaps. Greater time values, but return is less because the returns are spread out over a longer period.
  3. ptrjon


    so you write a put, and then you sell that put?
  4. sounds like an awesome strategy. but i have a better one.

    how about buying a stock at .01 and selling at 999.99? risk a penny for 999.98 reward.
  5. MTE


    Yeah, don't you get it, first he sells-to-open and then he sells-to-close thus realizing a risk free profit! Brilliant!
  6. spindr0


    What an idea !!!
    Sheer brilliance !!!

    Are there any mortgage brokers here?
    I need to raise some money fast!
  7. ptrjon


    I just logged into my account, pressed the "divide by zero" button- now I have infinite money!
  8. i just sold some puts.. because its a bull market. wish me luck! :D

    i mean im minus puts at IB, so its like i wrote puts i think
  9. did you come from auto sales?
  10. spindr0


    Used car sales is the new prerequisite for becoming a Fool Service Broker
    #10     May 4, 2010
    Roberto Lopez likes this.