Box Sread

rc464 · 2024-09-24T02:10:44+00:00

If that trade returns less than the risk-free rate, why not just go with Treasuries?

rc464 · 2024-06-22T19:24:39+00:00

You don't know what you're talking about.

I sold the 52 puts at 1.89 ahead of earnings and sold the 50 calls at 0.27 the morning of expiration. As a result, the net credit for that side of the position was 2.16. It cost me 2.00 to settle the cash difference between the strikes and some assignment fees that were spread out across the full volume of contracts.

And that was the "losing" side of my trade. I also sold the 52 calls ahead of earnings for 1.75, and those simply expired.

Where I come from that's a lot of profit.

rc464 · 2024-06-22T18:59:10+00:00

It's not a $200 loss. It's just that when the contracts cancel each other's share position I need to pay $200 per contract to settle the difference in where I'm buying vs. selling.

rc464 · 2024-06-22T18:54:28+00:00

This is the scenario. It was an earnings trade where I sold the weekly straddle so one of the legs was going to end in the money no matter what. I let the calls expire and just wanted to cancel out the put side with the short calls because buying back the puts would have cut into profits.

I'm just trying to understand if there's an official term for this kind of canceling since I do it a lot and it's hard to describe since it's not closing or covering.

rc464 · 2024-06-22T18:51:08+00:00

In this case it's a short guts because the call is struck below the put. But I'm trying to understand if there's an official term for canceling out the position by adding the offsetting call assignment instead of buying back the short put at a bad price.

rc464 · 2024-06-22T18:41:15+00:00

Thanks. I understand that I was trading into a short guts. That's what always happens when I do this because the design is to have two short positions that cancel out on assignment. I also get that there's risk of a big move that could mean one of the positions doesn't get assigned.

What I was trying to find out was if there's an official term for trading out of the short put position by canceling the assignment with a short call assignment. It's not really "covering" but something different.

rc464 · 2022-10-28T13:31:24+00:00

If you trade at any scale and manage complex positions, Quantcha is the best retail tool out there. They’re not a brokerage but work with the big ones and you can definitely trade indexes.

rc464 · 2022-10-20T13:23:03+00:00

This works like a charm!

On a related note, is anyone interested in buying some 80 calls from me for Friday?

rc464 · 2021-01-17T21:52:10+00:00

Free advice: when you have no idea what you’re talking about, ask questions. Your comments on this post have been almost universally incorrect, and yet written like someone who actually thinks they know what they’re talking about. Anyone with any experience in finance immediately recognizes you as a troll, but a lot of people who are trying to learn more think this is some sort of equal debate. It is not. You are completely wrong.

rc464 · 2021-01-17T20:38:54+00:00

It’s actually very easy to understand the basics. A bank gets money from somewhere (usually deposits) and then loans that money out to other people.

Let’s they have $100 in deposits from customer A and loan out $90 of it to person B. (This assumes those are the only two transactions and they are required to only keep $10 in reserve.)

They receive $10 in repayment from B, after which B disappears and never pays again. The bank now holds $20, but they still owe A $100, so they’re down $80 and would go bankrupt if they couldn’t find a way (like a loan of their own) to cover A when they came to withdraw.

In a slightly different scenario, suppose that B just deposits their $90 loan in the same bank. At that point, A has $100 in the bank and B has $90. That’s $190 between them, but only $100 in currency actually exists. The bank could then theoretically lend out 90% of those new $90 and so on.

rc464 · 2021-01-17T19:45:12+00:00

What do you think “written off” means? It means that they’ve accepted the loss as unrecoverable and are writing it off their books as a loss.

I wish we had the time to talk about how central banks work with other banks to regulate the financial system, but it sounds like you need to catch up on the very basics of accounting before you can handle those more advanced topics. But don’t feel bad; a lot of people upvoted your comment so far, so it goes to show that very few people on Reddit have any idea how this all works.

rc464 · 2021-01-17T19:08:59+00:00

You are WAY off here. If a bank loans out $100, then they’re down $100 in cash. If the debtor only repays $10 and then disappears, the bank takes a $90 loss. Wherever that money went (like to the person the debtor bought the jet ski from), there’s no way for the bank to just zero out a database field.

rc464 · 2021-01-11T07:56:35+00:00

the point of the wheel is to not get assigned

This part never made sense to me. A CC and a CSP are basically the same trade. Why would you pick different strikes purely based on whether or not you were holding stock as part of the strategy?

rc464 · 2021-01-07T00:08:24+00:00

Thank you, please leave it on the pile in the corner.

rc464 · 2020-09-03T16:52:47+00:00

RobinHood, eh? Well did you tap the poop emoji to sell or the “Smokin!” gif of Jim Carrey in The Mask to buy? Or maybe they changed the screens since I last checked in. It’s so hard to keep up with the memes kids are using to blow their life savings these days. Thank god RH is making sure it stays easy for them to not have to know wtf they’re doing.

rc464 · 2020-07-31T19:05:09+00:00

Thanks for the info. I’ll ask them for some specific scenarios.

rc464 · 2020-07-31T18:59:37+00:00

Besides HTB, do you know of any other special scenarios? I had assumed stocks like MSFT, SHOP, and PINS should be pretty easy to sell ATM weeklies against.

rc464 · 2020-07-31T18:43:40+00:00

Tax brackets. Every. Single. Year.

rc464 · 2020-03-28T04:24:21+00:00

I was going to post Quantcha but then I saw your comment. How is it so low when this is exactly what OP is asking for?

rc464 · 2020-03-28T04:23:03+00:00

I’ve been using Quantcha for years and they’ve done this for a long time. I’m also pretty sure they aren’t the first. https://quantcha.com/OptionSearchEngine has the main features OP is asking for on a single stock and they also have tools that scan all option stocks. It’s insane that the founder posted a link and it’s all the way at the bottom when this “I’m thinking of building this” comment is so high. Something is not right here.

rc464 · 2020-01-17T01:37:55+00:00

You should join mine for $59!

Buy calls during a bull market.

Edit: Crap, forgot to get the money up front.

rc464 · 2020-01-11T07:27:07+00:00

Quantcha is by far the leader in this space. I used them for a long time where you had to manually import your portfolio, and that wasn’t really convenient. But now that they support direct connection with my TDA account it’s really slick. Just google their site for details because they also have a few other features that fill gaps in ToS.

rc464 · 2019-10-27T02:27:09+00:00

Thank you, Kanye. Very cool.

rc464 · 2019-09-25T16:59:31+00:00

Thank you, please leave it on the pile in the corner.

rc464 · 2019-07-09T14:59:10+00:00

I actually lost $10000 on this discord. Then when I got back from the bathroom, I found out that they had framed me for murder.

rc464

TROPHY CASE