No-Risk-of-Capital Trading Strategies

Discussion in 'Options' started by riskfreetrading, Mar 9, 2008.

  1. The purpose of this thread is to come up with trading strategies that achieve the following:

    1. No risk of loss of capital at end of position/strategy.
    2. The annualized maximum reward cannot be lower than interest rate on capital obtained from the treasurys/notes/bonds yield curve.

    You can use any underlying, any time frame (but annualize you returns), any strategy, any example (real or hypothetical). Do not take into account bid-ask spreads and commissions.

    Let us see what this forum can come up with. If you think that such a strategy does not exist, that is fine as well. Just say so in your response, and let us why if you can.
     
  2. How about opening a WaMu Online Savings Account when you open a WaMu Free Checking Account? You get 4%.

    https://online.wamu.com/banking/offers/Campaign001/landing/free.asp?hmelnk=phpwfcraprop022208

    As long as you do not exceed the FDIC insurance thresholds, you will beat the current Fed Funds rate of 3% and the current 3 month T-bill rate of 1.44%.

    Of course any fees would reduce your interest income. In addition, WaMu could change the interest rate at anytime.
     
  3. lool
     
  4. No free toaster?
     
  5. I have a pure arb paying 10% weekly. Long the natural European outside binary range trade and short the outside via the synthetic. A retail exotics dealer against a listed vanilla straddle hedge or the aforementioned outside binary range.

    If anyone here can decipher it and send me the maths I will hand them the arb.

    :p
     
  6. Is this thru Saxo? And is it with spot forex, european style options?
     
  7. Unfair! You know I suck at math. Damn you Atticus!

    :D
     
  8. dtan1e

    dtan1e

    i'm a statistician and a quant & still haven't got a clue what u on abt, my goodness !
     
  9. Short gamma (inside) in the synthetic binary range trade at dealer X at large-edge. Long the vanilla straddle of same duration or the long gamma (outside) binary range trade at dealer Y at a small edge loss. Obtuse, but I can't afford to be obvious. The dealer is pricing the Euro as an American.
     
  10. Hard to borrow reversals aren't that hard to find that pay >30% if you can source the shares to short. Short the box into the Fed has been money since 5.25% FF.
     
    #10     Mar 10, 2008