Thu 29 Nov 2007
Credit Card Arbitrage Return at 50.12%
Posted by RichSlick under MMO
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My most recent endeavor with credit card arbitrage has so far yielded, on an annualized basis, 50.12% but the actual return from October 2007 thru December 21st is 12.53 pct. I must confess, the recent volatility in the markets have made the returns a bit beefier than I anticipated.
So to reflect what I did.
Step 1. Borrow 40k from credit card company at 0% for 6 months
Step 2. Invest money in my ETF Covered Call Strategy.
Step 3. Profit
Step 4. Pay back loan (due in January 2008) and keep profits.
So far, I’ve banked $4,741 which isn’t too shabby as Christmas is around the corner and baby needs a new pair of shoes. I’ll have to pay taxes on this amount so I’ll only keep about $3200.

If you’re curious, you can view the 3 trade transactions here. Although it’s been fairly profitable, I am beginning to wonder if I picked the wrong time to do this; the markets increased volatility, if it continues, will eventually lead to a major sell off as people get tired of the roller coaster ride and begin to fear losing money and bail out. If there is a sell off in late December I’ll have to roll over the arbitrage onto another account for another 6 months and keep churning profits in 2008.
All I really want for Christmas this year is a stable monetary policy.

























November 29th, 2007 at 12:33 pm
Nice work!
Of course you should expect some year end tax selling in stocks that are down for the year, so like you said there is likely more volatility to come.
I really like this covered call strategy and want to give it a go soon. Maybe summer would be nice, quiet time of year for it.