Please do... there is no way you can get a riskless collar and for a credit...... if you get 2% in dividend.. maybe, but that's not a brilliant strategy since the S&P500 has roughly a 2 to 2.3% dividend yield anyway... so by you taking the lower end, again you're probably losing out. And I'm 100% sure you still have risk. All the strategies you have shown, are either at not-tradable prices because pre-market open, cost more then they will deliver especially including transaction costs, or simply a worse strategy that can be done more cheaply. There's no point in discussing those types of hypothetical trades... If.. then... If these prices where real... then it's risk-free.. If my sister had a dick, she would be my brother... I'm not being an idiot. I just find it disturbing that people here are trying to pretend to have found something brilliant, that isn't there. This guy's argument is his service.. he tries to get people on board by pointing out brilliant strategies, which aren't brilliant at all and those clients can get more, better, for less... so his 'services' are totally useless.
The baseline for the "risk free rate" is typically a "risk free bond" like a treasury. Just because one can find situations where they can eek out a very small percentage return doesn't mean it's any better than simply owning short term treasuries. That's why people are pointing out that the difference is merely related to interest rates.
That was an Iron Condor on Tesla, Selling 345 put buying 340 put Selling 345 call, buying 350 call All of them the March expiration. Credit was 4.9K (you got that if price ended up at 345 at the 3rd Friday in March.) Max. loss was only $137, so that was an excellent play regarding risk reward. Now if you check Tesla's chart, even as late (close to expiry) as March 10th or so the price was at $345, but the IC was probably worth only a buck. So had you closed it one week before expiry you would have kept like 80% of the credit, so 3.7K. If you held it until expiry, you lost $137... Edit: If you think Tesla's price will be around the current $345, you could sell a similar August expiry IC 340/345/345/350 for $4.85 You max. loss is under $200 with commission (10 contracts) and the max. gain is 4.8K... Of course chances of the price being at exactly 345 is pretty much zero, but you want time work for you as much as you can before buying back the IC...
Yeah I just did. It is only phenomenal if price stays in the same range. Now it is OK if price goes away as long as later it returns... Here is an idea: set up 3 of these ICs among a wider spectrum. Let's say one with a midpoint of 310 the other with the current 350 and one with let's say 380. Each has the max. loss around $200 but the possibility of gaining 4.8K with 10 contracts. Now once they are set up, you just have to wait for the time to pass. Sure 3 ICs has 3 times the possible max. loss, but your chances of getting one price range right is suddenly 3 times better. Since Tesla fluctuates a lot, there is a chance you might be able to close 2 of these Condors with a decent gain. Let's say after a month price is at 380ish, so you can close that Condor for 3.8 (time value lost, working for you) making 1K. Then price collapses and you can close the 350 Condor for 3.5K, making 1.3K. You will lose on the 3rd condor 200 bucks, but over all you still made about 2K with fluctuating price...
I have never filled an arbitraged IC. I have bought verticals at a small credit during crash scenarios.