What's wrong with this Strategy?

Discussion in 'Options' started by nravo, May 29, 2009.

  1. nravo

    nravo

    I know something must be awry here, but I'm having a brain fart or something.

    Sell 1 near month EUR futures contract in account 1
    Buy 1 near month EUR futures contract in account 2

    Sell one EUR three-month put in account 1
    Sell one EUR three-month call in account 2

    Roll over both futures contract

    Let the futures contracts expire
    Let the options contracts expire.

    Is this a close to fool proof way to capture the time premium on the two option positions?

    Name for this? Alternatives?
     
  2. 1) ?.....The futures "offset". The options don't.
    2) Your net position is a short-straddle.
    3) What you may want to try to do is to have losing trades be allocated to Account-1 which is taxable AND allocate profitable trades to Account-2 which is tax-deferred and/or tax-exempt. Then you may really have "something". :cool:
     
  3. nravo

    nravo

    Apologies. I figured out my idiocy.
     
  4. Don't worry I do this all the time. At about 11:00PM i'll have the greatest trading idea ever, and then by 9:00 once i've had a night's rest and coffee, it's not so brilliant anymore. :)
     
  5. Heh, I get those while running. Arb seems so much easier when your brain gets less oxygen...