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I want to know how does one select the right choices of strikes to implement a box strategy?

(Last Updated On: April 23, 2012)

I want to know how does one select the right choices of strikes to implement a box strategy?

 

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American or European exercise?

 

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Check every potential pair of strikes automatically, and look for differences in (implied) dividend yield & “riskless” rate. Mispriced box spreads are really, really rare!

 

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SPY has box spreads priced above par before it goes ex-divident.
E.g. 136/140 bear call spread and 136/140 bull put spread would trade at 4.20 several days before ex-div. I’ve seen it several times. Short the spread and cover at 4 at expiration. Early assignment and pining are risk factors

 

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in box strategy main things that in 4 position one strike will be higher ITM. how you impliment you are buying Deep itm or selling. other things at how much your net premium debit and credit.and at how much premium debit credit should make position.

 

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no matter of implied volatility or dividend yield

 

NOTE I now post my TRADING ALERTS into my personal FACEBOOK ACCOUNT and TWITTER. Don't worry as I don't post stupid cat videos or what I eat!

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