Creating an Idiot-Proof Option Selling System

Would love a link also.

Billy Jeane

It's hard to know whether one is not priced accurately, because the two have different payoff profiles that would lead the implied move to look different assuming you're backing that out of the price.

Ben needs your money

No worries at all if you use chatgpt you should be able to get it to display the payoff of the call. I'd probably use that to check what the payoff at expiration looks like against the payoff of the polymarket bet

Ben needs your money

Dude sorry for bombarding you with questions, you're the only person with any amount of knowledge on this that i can ask, if its annoying just tell lol, anyways do I really care about having an actual arb on this? I could structure a trade like that i guess but optionsprofitcalculator doesnt work on crypto afaik lmao. Wouldn't buying the poly no's and a call as a hedge still be statistically really good? On BTC will hit market prices seem a lot more accurate but less and less the closer we get to the end date and the higher the strike which makes me doubt my maths a little bit but also kinda confirms the gambling psychology behind it? idk using monte carlo rn btw

KruczEEk

If you look at the payoff of the call at expiration at different prices vs the payoff of the polymarket bet that might help

Ben needs your money

Haha you're definitely thinking about it in the right way. Usually when I've looked at doing it in the past, I see in order for the call to compensate for the loss of the no shares on Poly, the call actually has to get in the money rather bigly. Instead I found it was easier to make an apples to apples comparison about the estimated price movements by creating a bet that's closer in terms of payoff to the Polymarket bet. That was usually some kind of very tight credit or debit spread.

Ben needs your money

hey, kinda still new to this stuff so excuse me if I'm stupid, but wouldn't going long on the call and no on poly still yield a statistical edge, without any exposure to unlimited risk? Since these markets have a different estimation of the price movement

KruczEEk

Have you tried to structure a spread that replicates the payoff of the polymarket leg? For example if you're short the call long yes on polymarket those yes shares have a capped payoff while the option loss is unlimited. You can figure out the right spread that gives you essentially a binary option. When i've tried to do it it's all an execution game, because in order to do the arb you've got to leg the spread to get great fills on the options, tho sometimes things are so dislocated it's easier like in the beginning of 2024. Could probably setup a really good strategy around this tho if you know how to code.

Ben needs your money

https://polymarket.com/event/bitcoin-above-105000-on-february-7?tid=1738700790268 here it's even more free cause you can just take the delta from the optioon chain, it's 14% on polymarket and 0.09 delta on options

KruczEEk

Great to hear

Ben needs your money

KruczEEk

This could be a far better and simpler idea

Ben needs your money

Okay but what if Ben we instead put all of our money into Tesla weekly options and constantly do this?

Colby Fornerette

One more thing I should have clarified is while this is intended to be an idiot-proof guide for selling GME options, it's probably not the best idea for beginners. This is more for intermediate to advanced idiots so please be careful.

Ben needs your money

Yeah

KruczEEk

Thanks I really enjoy your deep dive videos they kickass 🤣 and sweet music im gonna check them out I’ve only been trading for a week so anything to help me develop. Appreciate you! keep on keeping on 😎

John Isbell

Relentless Trader is another guy I'd recommend if you want to see people trading the low-float space on the long side. He livestreams on Youtube every day, but doesn't front-run his audience lol.

Ben needs your money

Are you seeing the probability on Polymarket being much higher?

Ben needs your money

Hey glad you like the vids! I did a bit of a deep dive into Ross and his trading style a while back, mainly just because he's popular on Youtube and I couldn't believe the numbers he was posting. In short, he definitely has real skill in the low-float space, but he streams his trades to a few thousand people every day and basically front-runs them. The stocks he's looking at are so thinly traded that a relatively small amount of size can move prices massively. He buys, everyone else piles in, and he sells into that buying. There is a real edge in the stuff he trades, but it's not nearly as good as the results he gets. If you want to get into that space you might want to checkout Brian Lee. He trades on the short side, but he has a more sensible approach and a lot of it can be applied to momentum as well.

Ben needs your money

using GBM to calculate the probability of a touch

KruczEEk

Hey, have you seen the mispricing of probabilities of bitcoin touching a given price on polymarket and the biance option chain? It seems massive, and I'm assuming options are more right cause of the higher liquidity but I might be doing something wrong

KruczEEk

day trading youtuber should raise red flags

KruczEEk

Hello Ben! :) I Have a question unrelated to options… how do you feel about Ross Cameron the warrior trading dude?? If you have heard or seen him.. I get the feeling he is bad News xD I’m really interested in an analytic review of his content and what you get out of his character if anything at all… also the YT video of the complex adaptive systems you posted ages ago has me laughing out loud but i am also intrigued

John Isbell

Hey Ben can you send it to me as well?

Colby Fornerette

Hey sorry to bother you, do you mind sending it to me as well? Im interested in that topic

Jonathan Demyan

Hi glad you like the videos! I had a cash secured put video that is now unlisted, but I'll send it to you.

Ben needs your money

Hi Ben, new here, did you make a covered call or cash secure put video by chance? great work!

L L

That might just be part of the pain of doing this

Ben needs your money

Lol please don't come after me if this goes tits up

Ben needs your money

This is not a bad idea at all imo. I've thought about doing this as I could also do it in Robinhood and pay 0 commissions on options.

Ben needs your money

thinking of doing this on amc but the weird but frequent iv spikes seem really scary

KruczEEk

changing my ibkr trading permissions for this one

KruczEEk

Good stuff. I personally do not want to live with the blowup risk. So I sell the 30 delta strangle and buy the 5 delta call. You will still make money. I think the money that you need to save for your potential static hedge is not worth it. If you don't need that, then you can trade slightly bigger which counters the cost for the call. Let me know what you think.

Maximilian Helm

Hey not specifically

Ben needs your money

Hey Ben have you ever traded 5 min orbs

Aleksander Avdjiev

Not that I can think of I don't trade them much

Ben needs your money

Any videos on trading indices?

ketan dontamsetti

TLDR you have a 10k account just doing this one trade (which probably wouldn't be the best idea), 3k/year on average but it won't be a clean 30%/year sometimes good sometimes bad

Ben needs your money

It's really impossible to say specifically because it depends on so many different things. For example how actively you're managing the trade, how your broker margins you for short options, there's luck involved, different people will be able to endure bigger drawdowns and more variance. I'm trying to get 30-40% on the margin used in the strategy tho

Ben needs your money

what's the expected return with this strategy assuming historical IV premium stays the same in the future

Andrew Marotta

Who is gonna be featured on coinfessions from TRUMP

Ben needs your money

Which one of us is going to debt from TRUMP?

FatMcDonaldMan

I'll keep telling myself that :_(

Ben needs your money

Consistent low premium OTM option selling 📈📈>>> degen gamble on TRUMP$

shubham agarwal

Alright which one of you is retiring from TRUMP?

Ben needs your money