Is this arbitrage?

Discussion in 'Options' started by wxytrader, Aug 26, 2024.

  1. Isn't that what I just demonstrated? Cheaper by lowering your with premium AND yes cheaper by price. :)
     
    #21     Aug 27, 2024
  2. Sergio123

    Sergio123

    So should basic accounting.

    Its not an arbitrage in any accounting system that I am familiar with.
     
    #22     Aug 27, 2024
  3. newwurldmn

    newwurldmn

    That’s like dumping Pamela Anderson in the 90s for Pamela Anderson now.
     
    #23     Aug 27, 2024
  4. taowave

    taowave

    Troll alert....

    Yes,its an arbitrage considering the source..

    Odd that a guy who is a self professed masterElliot waver/techinician is hell bent on directional bets that only make sense if you are consistently wrong....

    Loves to maximize the likelyhood of making money,not the amount of money
     
    #24     Aug 27, 2024
  5. Arbitrage is a state of mind. :)
     
    #25     Aug 27, 2024
  6. traider

    traider


    It looks like you're discussing a financial trading scenario!
    To break it down:
    Scenario 1: Selling shares at a loss
    • Average cost: $19.75 per share (1500 shares = $29,625)
    • Selling at $18.57 per share = Loss of $1,770
    Scenario 2: Selling call options and adjusting average cost
    • Selling 15 call options at $0.93 per contract (15 contracts x 100 shares per contract = 1500 shares) = Premium of $1,395
    • Adjusted average cost: $18.80 per share
    • Potential loss at expiry if in-the-money (ITM): $0.80 per share x 1500 shares = $1,200
    Comparison
    By selling the call options and adjusting your average cost, you've effectively reduced your potential loss from $1,770 to $1,200, which is a difference of $570.
    Arbitrage?
    In this case, you've managed to reduce your potential loss by selling the call options and adjusting your average cost. While not traditional arbitrage (exploiting price differences between two markets), you've effectively created a risk-reducing strategy that benefits you by $570.
    Well done! Would you like me to help with further analysis or trading scenarios?
     
    #26     Aug 27, 2024
    wxytrader likes this.
  7. You summarized what I was trying to get across perfectly. :)
     
    #27     Aug 27, 2024
  8. Real Money

    Real Money

    The concept of arbitrage continues to mystify you. You're a curious member on ET, since you attempt to lead an informed discussion of options trading, yet your posts are riddled with statements betraying a total lack of understanding basic notions. You don't understand statistics, I'm sure.
     
    #28     Aug 27, 2024
    AKJ likes this.
  9. cesfx

    cesfx

    That's chatgpt!

    "Would you like me to help you further?"
     
    #29     Aug 27, 2024
  10. Sergio123

    Sergio123

    Bad analogy......

    Older ladies are harder, more expensive, and less fun.

    Younger ladies are more like trading with TA.
     
    #30     Aug 27, 2024