Title: Protect Robert's $3.2M RSUs: $27,500 Arbitrage Opportunity with Put-Call Parity Tagline: $27,500 Arbitrage Opportunity: Secure Your Tech RSU Gains with Put-Call Parity Problem: After a stellar career at QuantumLeap Technologies, Robert, a 55-year-old SVP, holds $3.2M in QuantumLeap RSUs vesting over the next 18 months. He's concerned about a potential market correction eroding his retirement nest egg as the stock is volatile. He wants to protect his gains but also capitalize on potential upside. He's hesitant about simply selling his RSUs, fearing he'll miss further growth, but also worries about losing substantial value if the market dips. He is seeing put and call options with the same strike price that expire in 18 months, but they don't quite match up with the current stock price and risk free rate. Solution: By utilizing our Put-Call Parity Calculator, Robert identifies a mispricing in QuantumLeap's options market. Specifically, the call options are slightly overpriced relative to the put options, stock price, and risk-free interest rate. Robert implements a synthetic position by shorting the overpriced call option and buying the corresponding put option. He also buys shares of QuantumLeap to hedge his position and borrows money at the risk-free rate. Our calculator helps Robert determine the exact number of shares and options contracts to purchase and sell to create a risk-free arbitrage strategy. He calculates the implied fair value based on the other options, stock price, and interest rate. The difference between fair value and the market price represents the arbritage opportunity. ROI: Robert locks in a risk-free profit of $27,500 (pre-tax) by exploiting the arbitrage opportunity identified through the Put-Call Parity Calculator. This strategy effectively protects his $3.2M RSU portfolio from downside risk while still allowing him to benefit from potential upward movement in QuantumLeap's stock price (up to the strike price of the options). He is also able to defer taxes on the stock until he sells it in the future. Description: Discover a hidden arbitrage opportunity using put-call parity and protect your hard-earned tech stock restricted stock units (RSUs) from market downturns. This case study shows a 55-year-old executive how to leverage options for risk-free profit. Category: Lead Gen
