poopy's risk to arb tutorial

I was told there would be cake.

 

I'll be back later with a Jan21 position so it relates to the tax concept. Obviously you don't meed to defer to the following tax year.

 

• How about this term

"I am long ES from 79. In size."

• What does in size mean?
• I asked over in the "poopy's risk to arb tutorial - Glossary" thread - but nobody has a clue.
• Looks like only @PoopyDeek knows.

 

i take it to mean balls deep

 

How many balls does he have?

 

https://www.urbandictionary.com/define.php?term=balls+deep

 

Short the MSFT Jan 110P/175C for 20.52. Jan fwd = spot. Jan box is $64.5 ($0.50 under strike diff). Example for illustration. Those are the figures you need to look at the opp. There isn't much to add until I cover by converting to the long box.

 

If it helps,hes short the strangle,which could also be called the Wings of a box trade,assumingg he later buys the "guts" of the box,I.e. 110 call/175 put. Let's see how it unfolds

 

Thanks for doing this, two questions if you don't mind:

1. Is tax deferment the only reason why you make the box instead of closing?

2. What is the advantage of shorting the synthetic straddle instead of the natural?

 

I will get back to the trade this week even though MSFT closed on the low.

1. No, I'll do these without rolling into the following calendar year.

2. Microstructure and the ability to trade gamma (dynamic hedge). Shares drop, reduce share component.