"didn't realize they were american-options" so you think or do you get the impression that thats what they are saying ? ..that this is american style ? is that what you think they are saying these loosers do not answer phones.. I like their platform. which IB plateform should I get IB webtrader ? or individual ? is vanilla option same as american ? thanx by the way
gkishot : i would have made more money exersising ( selling at the strike price )=1.2300 and buy back when it was at 1.2152, than simply selling the option. riskarb: I will only be using them to buy calls, and puts.. will not sell options with saxo !
If there is any arbitrage there it won't hold for long. And my understanding is that not for arbitrage those put options were bought in the first place.
Yeah, it will actually bleed more -edge for the customer as time passes. The discount arb/time increases. I am referring to the 10pip market in an option that is deep ITM with the bid < intrinsic. I haven't the vaguest idea what you're talking about with, "not for arbitrage the put options were bought in the first place" That has no relevance to the argument at hand.
Riskarb, here is quote from original post: <QUOTE>I bought september put ( eur / usd ) strike 1.2300, and it is now is in-the-money.</QUOTE> What it tells me is that those puts were in the money only after some time and not at the time of their purchase. If those options are priced with arbitrage it does not make any sense to wait some time until they may or may not become in the money. One can buy in the money put options immidiately & make money from arbitrage. So arbitrage was not initial intention at the time of buying put options. And that is relevant for me in terms of overall trading strategy which is not arbitrage.
Is it possible to buy options using leveraged money. eg, i need to buy option and it will cost me 8000$usd. using 1:100, can i just put down 80 and buy the option ? or am i greatly mistaken ?
You cannot buy options using leverage. You have to pay for their premium your own money or you can borrow money at margin.
when i bought the options (put ), spot price was @ 1.2355 .. so it was out of money .. then 5 days later it became in the money ..and thus wanted to exersise it. i would think it is better to exersise the option to gain 145 pips as oppose to just sell the option and gain lesser amount.