Showing posts with label option parity. Show all posts
Showing posts with label option parity. Show all posts

Thursday, September 16, 2010

Sitting pretty

Re: the trade I posted previously (Uptrending Equity: TSLA option arb),  the interest rates on the borrowed shorts are falling off a cliff every day now, so the negative carry is dropping sharply while the implied volatility disparities between calls and puts is also dropping sharply.  Making me a bunch of money every day now.  


The VXX short/ BGU short pair has also been bringing in money for me nearly every day.  Still holding since Oct futures contango is also high.


Given Japan's decision to intervene in currency markets, other central banks with depressed economies may decide to compete to debase their own currencies, which will continue to be good for gold, which just hit new highs recently.  Gold to the moon!

Friday, August 27, 2010

TSLA option arb

I love risk-free money.  Because I can short TSLA in my interactivebrokers account, I shorted TSLA while buying the synthetic long with options (long calls and short puts with the same strike and expiration) to lock up .90 risk-free upon expiration of Sept options and 2.70 upon expiration of the Dec options all without using that much margin.  If TSLA becomes more widely shortable before then, the options should come back into parity and I can take my gains even sooner.