iron cockroach

If the claim is that it's 8 legged risk free, then that's bullshit.

Even a simple conversion or reversal isn't 100% risk free.

 

How do you do an 8 leg trade? I use OX and I am only able to do 4 max.

 

You leg it.

 

buy two cattle futures? (ps. i think cockroachs only have 6 legs)

 

send me 50 grand and i'll devise a titanium millipeed. That fucker will have a thousand legs.

 

It's a synthetic Killer Bee.

Or was that a synthetic hornstraggle-swap?

 

OK, so it is a waste of time but how do you do it anyway?

 

Shamelessly stolen from the Optionetics forum. I hope that doesn't break any rules (ours or theirs), it's a public board after all.

The six different legs of an iron cockroach are:
1. One long call at strike X
2. One short call at strike Y
3. One long put at strike Y
4. One short put at strike X
5. Long 100 shares of underlying
6. Short 100 shares of underlying

http://www.optionetics.com/forums/topic.asp?fid=191&id=39490&page=4

 

Long synthetic at X
Short synthetic at Y ... Box arb. Long the y-x debit at a premium to y-x. How do we make money? Volume.

Long 100 shares with a short against the box [not the above]? How can you carry 100 long and short in the same account? WHY? The only thing shameless is that they're suggesting a trade that's guaranteed to earn less than LIBOR. I can't really respond any further about the long/short 100 spot. That's ridiculous.

Priceless....

 

I understand the calls and puts and that is what I pictured, however I agree, how the hell can you be long 100 shares of the same thing you are short 100 shares of?

That means you have no shares.