Risk Free Strategy with DWAC via /r/wallstreetbets #stocks #wallstreetbets #investing


Risk Free Strategy with DWAC

Buckle up retards I’ve got something for you : an infinite Money glitch.

I’ve recently seen someone on theta gang ask this question. So I decided to do some more digging.

Puts are usually overpriced relative to their call counterparty. Basically this is because the market drops violently and goes up slowly. The Difference between Put and Calls on the Same Stock is usually not too big.

Here’s an example with Apple :

We can see that the Puts are slightly overpriced

In This Case Selling the Puts and buying the Calls would result in a $7 credit(premium). Not worth my time, mcDanks pays more..

This Pattern with overpricement is remarkably consistent across our Options Chains.

Usually this happens when the Market anticipates a downturn beyond systematically overpricing Puts. (Stock go down + Put more expensive than call)

Let me give you 2 other examples before we head over to our target Stock.

  1. Trying to do this on Cathies ARKK ETF would give us a $40 credit per spread (expiry:Mar,18,22)
  2. If we apply the same thing on RSX Russia ETF (Everyone expects it to go down) we could make $38 in credit per spread (expiry:Mar,18,22)

OK Here’s our P/L Chart with DWAC

Now let’s move to our actual strategy : A reverse Collar

I’m not gonna explain to you what a reverse Collar is but just note that is is a limited risk strategy

1 Spread consists of :

  1. Shorting 100 Shares
  2. Selling an ATM put
  3. Buying an ATM call

Even if IV changes, we will make 437 if he hold the spread till EXP.

Keep in mind you will need $9K in colatorall for your 100 Shares short.

https://preview.redd.it/1wh8brhnakk81.png?width=992&format=png&auto=webp&s=69d627a179d4e9f93e5c392e48a96eae5c68b4d5

http://opcalc.com/IhShttp://opcalc.com/IhS

Submitted February 28, 2022 at 01:03PM by musiro77
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