The introduction of Flying Eagle Arbitrage, the selling characteristics of Flying Eagle Arbitrage

Flying eagle arbitrage, also known as vulture arbitrage. In the ** market, it refers to selling (buying) two options with different strikes**, and buying (selling) options with lower and higher strikes** at the same time. All options have the same type, underlying contract and expiration date, and are exercised at equal intervals**.

Method 1: Sell a low strike **(a) call option, **a medium low strike** (b) call option, **a medium to high strike** (c) call option, and then sell a high strike **(d) call option.

Method 2: Sell a low-strike (a) put, a low-medium-strike (b) put, a medium-high strike (c) put, and a high-strike (d) put.

Note: The execution of this strategy is equal in the range of use I am not sure about the market outlook, but I hope that the underlying ** can be lower than the low execution ** or higher than the high execution ** when it expires.

Investors believe that the market will break out upward or downward, but are suspicious of the right to sell the butterfly arbitrage portfolio.

The premium is too high, so they are willing to widen the distance between the equilibrium point and reduce the premium payment. Break-even point High Break-even Point (P2) = High Execution** - Net Premium.

Low Equilibrium Point (P1) = Low Execution** + Net Royalty Maximum Gain Net Royalty Maximum Loss Maximum Loss = Medium Low Execution ** Low Execution ** Net Premium.

Structure Method 1: Buy a low strike**(a) call, sell a low to medium strike**(b) call, sell a medium to high strike**(c) call, and **high strike**(d) call.

Method 2: Buy a low-strike**(a) put, sell a medium-low strike**(b) put, sell a medium-high strike**(c) put, and then **a high-strike**(d) put.

Note: The execution of this strategy is equal in the range of use I am not sure about the market outlook, but I hope that the underlying asset can be executed between medium and low execution and medium and high execution when it expires.

Investors believe that the market will be within a certain range, but want to invest in a more conservative group than butterfly arbitrage.

Together, that is, to expand the range within the equilibrium point, and the loss is controlled within a certain level. Break-even Point High Break-Even Point (P2) = Medium-High Execution** + Maximum Profit.

Low Equilibrium Point (P1) = Medium Low Execution** - Maximum Gain Maximum Gain Maximum Gain = Medium Low Execution ** - Low Execution ** - Net Premium Maximum Risk Net Premium.