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money tree said:Clues thus far:
"Risk free means having nett zero exposure. It also means there is no market movement scenario that could cause the system to fail."
"Put your money into a Bankwest account for 6% return per annum. I can't see any risks in this system"
"think see-saw"
"The mission was to eliminate risk. Derivatives are risk-limiting instruments. You are on the right track."
"A + B = C + D
risk A + risk B = total risk + return
first problem is how to get A plus B to equal zero. The second problem is how to avoid a -D when C is zero."
"The strategy is not suitable for div stripping because of the risks of exercise."
JetDollars said:Therefore, there are no risk free return in the stocks/options....market.
Please proof me wrong.....
money tree said:Time value actually is a negative. The strategy would be a lot more profitable if time decay was on my side. But the risk becomes unbearable when time decay is the main goal.
money tree said:someone emailed me a strategy. I thought better to reply here:
that may work, but its nowhere near either of my strategies. I have 2 risk free strategies. one has nothing to do with stocks or options at all. that will make your head spin im sure. the option strategy is included in my course, but it was incomplete because I never give away my best strategy until I top it with another. I did that, so I gave away some clues so that only my students could put 2 and 2 together. but i guess there arent any on the forum, or they dont get it, or they did and dont want to tell everyone.
A good understanding of ACH rules will help. The strategy has a few defence mechanisms. ie, at first glance it looks like a loser but it does work. but many option traders dont know all the calculations involved, and simply discard the idea at the first hurdle.
it took me 2 years to get there, and even with clues I wont be surprised if nobody else does. I do know however that one of my students entered this trade a few months ago, and thats without all the clues. I know this because I saw the trade go through, not because they told me. Its possible that someone developed the same strategy by coincedence, but since I have not seen this trade carried out in the 6 months since I thought of the strategy, I very much doubt it. theres some more clues right there.
cheers
money tree said:someone emailed me a strategy. I thought better to reply here:
that may work, but its nowhere near either of my strategies. I have 2 risk free strategies. one has nothing to do with stocks or options at all. that will make your head spin im sure. the option strategy is included in my course, but it was incomplete because I never give away my best strategy until I top it with another. I did that, so I gave away some clues so that only my students could put 2 and 2 together. but i guess there arent any on the forum, or they dont get it, or they did and dont want to tell everyone.
A good understanding of ACH rules will help. The strategy has a few defence mechanisms. ie, at first glance it looks like a loser but it does work. but many option traders dont know all the calculations involved, and simply discard the idea at the first hurdle.
it took me 2 years to get there, and even with clues I wont be surprised if nobody else does. I do know however that one of my students entered this trade a few months ago, and thats without all the clues. I know this because I saw the trade go through, not because they told me. Its possible that someone developed the same strategy by coincedence, but since I have not seen this trade carried out in the 6 months since I thought of the strategy, I very much doubt it. theres some more clues right there.
cheers
money tree said:someone emailed me a strategy. I thought better to reply here:
that may work, but its nowhere near either of my strategies. I have 2 risk free strategies. one has nothing to do with stocks or options at all. that will make your head spin im sure. the option strategy is included in my course, but it was incomplete because I never give away my best strategy until I top it with another. I did that, so I gave away some clues so that only my students could put 2 and 2 together. but i guess there arent any on the forum, or they dont get it, or they did and dont want to tell everyone.
A good understanding of ACH rules will help. The strategy has a few defence mechanisms. ie, at first glance it looks like a loser but it does work. but many option traders dont know all the calculations involved, and simply discard the idea at the first hurdle.
it took me 2 years to get there, and even with clues I wont be surprised if nobody else does. I do know however that one of my students entered this trade a few months ago, and thats without all the clues. I know this because I saw the trade go through, not because they told me. Its possible that someone developed the same strategy by coincedence, but since I have not seen this trade carried out in the 6 months since I thought of the strategy, I very much doubt it. theres some more clues right there.
cheers
money tree said:wrote 20 XJO Jun05 4300.0 Call @ 63.0
money tree said:those xjo calls I wrote is a direction pick and definately not a risk free trade. hope nobody thinks that.
"How do you work out the percentage of profit if the trade is a net credit trade?" "It takes a lot of margin to protect it..."
so its a written position with a net credit. but then risk margin kicks in. still a credit? if its risk free, wouldnt risk margin be zero?
well DTM, I do believe you are nearly there.
money tree said:congratulations.
you are at the first of 3 hurdles.
money tree said:"But my normal trading has better returns.."
normal trading aka taking big risks and spending many hours researching, charting, lost sleep, stress, watching screens......
then theres passive cashflow from risk free investing. no risks, little time involved, no lost sleep, plenty of time to work or travel the world (which I plan to do shortly) and returns are stable and consistent.
"...are the hurdles strategic or rules based?"
2 strategic, 1 rules
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