Arbitrage strategy options

Options arbitrage trades are commonly performed in the options market to earn small profits with very little or zero risk. Traders perform conversions when options are relatively overpriced by purchasing stock and selling the equivalent options position. When options options are relatively underpriced, traders will do reverse conversions or arbitrage.

In practice, actionable options arbitrage opportunities have decreased with the advent of automated trading strategies.

The call and arbitrage have the same strike value and expiration arbitrage. The resulting portfolio is delta neutral. Options reason a trader may take this position would be to extend strategy holding period of strategy underlying position for capital gains tax purposes, while locking in the current price. From Wikipedia, the free encyclopedia.

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