Source
r/wallstreetbets•
2_uber

[UPDATE] My Risk-Free, Can't Go Tits Up NFLX Arbitrage Play

Options

Fuck all of you.

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It truly could not go tits up.

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Original Play

https://gyazo.com/c0eb1914e78c277a9bf7340b0c8071e2

Sell the 19th Jul $415.00 Call

Sell the 19th Jul $325.00 Put

Buy the 2nd Aug $400.00 Call

Buy the 2nd Aug $335.00 Put

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https://gyazo.com/6d628e89a276bea80dbbcadb8c3d6430

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For those of you that are mathematically challenged, (like many of you on my original thread yesterday)

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I closed my call calendar spread for a 33 dollar credit (sold the 8/2 400c and bought back the 7/19 415),

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And I closed the put spread for a value of 2,793.

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I didn't make very much money (2793 +33) - (1953) = 873

Posted Jul 18, 2019, 1:54 PM UTC

19256
SignedUpWhilePooping•

So your risked $1953 to make $873? Might not be a huge number but damn near 45% return on any option play is good.

The sub loves crazy risks with insane loss or gain but we also appreciate more conservative stuff. We're just quieter about it.

98
manixfan•

Just think, if he had done it with $1.9m he would have made $873k!

36
RBC_SUCKS_BALLS•

$1.9b = $873m!

22
ERECTED_PENIS•

$1.90 = 87.3¢

18
puuuuuud•

Now we're talking.

5
nsg_vwap•

€1,90 = €0,873!

2
dax-joel•

This guy stonks

2
Hamsmelly•

Hah the fact you think this is conservative.

24
SignedUpWhilePooping•

Ha, I think any play on here that even slightly tries to mitigate risk is seen as conservative. Conservative for everyone else? Probably not.

5
SteviaJ0bs•

The right mindset to read WSB is " Fuck all yall". Cheers.

76
csaw_88•

Ok I might be retarted but this wasn’t actually risk free right?

28
lazerflipper•

I’m pretty sure it’s risk free if you end up making money

41
Boldsmith•

I like this logic

5
ProudMakaroniar•

The max loss would have been the difference between the amount paid for the premiums of the options bought and sold :

Max loss = (premium 400C - premium415C) + (premium 335P - premium 325P)

​

Without considering IV, if NFLX had not moved below $335 (or alternatively, over $400), the position would not have bringed a profit if sold now

18
oeluy2004•

It’s definitely not risk free. It’s a double diagonal 4-option strat. Price movement chart literally looks like two tits facing up. What OP didn’t put in his pictures for the last post is the IV crush of his long legs. Some option pricing work better than others. OP got lucky af for this one; landed right on his tit

14
RBC_SUCKS_BALLS•

son of a bitch the bastard did it

25
satireplusplus•

It only worked because NFLX moved more than the estimated post-ER move (more than one standard derivation). And you were leaning bearish with the wider put strikes (10 vs 5 on the call side). I still think it wasn't a great option combo, as your chance of profit vs. risk taken wasn't that great. A simple straddle would have produced better results.

19
[deleted]•

[deleted]

19
jireliax•

its fun.

2
jesseross14•

No one thought this was a bad play. I just recall mentioning that light move or no move with IV drop could leave you in a loss. This clearly how the stock reacted to the earnings call. Good job. Nice gains.

18
2_uberOParbitraumatizes your mom's pussy•

I know. I don't have any hard feelings towards you or anyone else. Just banter.

11
jesseross14•

Well congrats. I didn't make this play because my brokerage would charge my $50 to open up a double calendar spread like this...

3
2_uberOParbitraumatizes your mom's pussy•

Being a RH degen comes in handy sometimes

7
jesseross14•

...Canada

7
[deleted]•

[deleted]

0
hungarianhc•

So much work for so little money.

18
[deleted]•

[removed]

1
Negido•

Yeah good call. Turns out I was wrong. Grats on your big dick victory.

13
2_uberOParbitraumatizes your mom's pussy•

Thanks man!

7
triptamimico•

Oh man. Remember me? I said i would do a calendar spread. Expected to drop 20$ not 40$

Nutted a 50%loss on a 300$ position

12
HookedOnData•

That part that you nutted part of it went into this guy's pocket

4
2_uberOParbitraumatizes your mom's pussy•

That's unfortunate man. Guessing you had a call spread?

3
triptamimico•

Yesh sadly

1
manixfan•

Always go for a credit when doing a single calendar spread.

2
manojk92•

I was pretty close to the 1k in profits estimate. IMO you should have waited until later in the day to close it. The short put would have lost ~10-15% of its extrinsic value. As long as netflix didn't go over $330 you stood to make more money by waiting.

11
2_uberOParbitraumatizes your mom's pussy•

I needed the money to jump into my next play.

12
St8Troopa•

What's next?

3
Drunkelves•

it's in his flare

24
2_uberOParbitraumatizes your mom's pussy•

CRWD bull put credit spreads

11
DBick289•

What was the NFLX stock price roughly when you bought these?

8
2_uberOParbitraumatizes your mom's pussy•

365

6
BigMacRedneck•

I would do a chimney top and double on the first week TV ratings are available.

7
[deleted]•

[deleted]

1
fco1017•

Good job.

​

I got raped.

6
2_uberOParbitraumatizes your mom's pussy•

Let me guess, OTM FD calls or short calls?

1
fco1017•

short 255P for 7/19.

2
2_uberOParbitraumatizes your mom's pussy•

How much did you end up losing?

1
fco1017•

Couple grand so far.

3
BlindDollar•

Congrats. What sucks with calendar spreads is if the price moves too far in your favor your long position loses its time value.

2
speedycerv•

You should have just done a strangle, not really any difference

2
2_uberOParbitraumatizes your mom's pussy•

Cheaper than a strangle

6
speedycerv•

Ah ok. Would this work for any earnings like bynd for example?

1
[deleted]•

[deleted]

1
hellojoe93•

Solid

1
Networking4Eyesϴ Theta Gang ϴ•

Nice.

1
[deleted]•

[deleted]

1