Retail Option

I want to sell derivatives on retail commodities:

I want to sell an European call option: For the price of $100 (paid now), I will give you the ability to purchase a brand new 17" macbook pro, 2.4gz i7-quadcore, 4g ram, 750gb for $2,000.00, expiring in 90 days. This macbook pro is listed to cost $2499.00 , so it would appear that you saved $399 by paying $100 now and $2000 later instead of $2499 later.

Except, I don't just want to do it for that one macbook pro, but for all products and services on earth. The option can be a little more exotic having a range of time in which it can be exercised. E.g. from day 91 and 95 I may choose to exercise it if it comes into money.

On the used product side, I can try to sell a put option. This laptop that I just bought for $2499, I want to have the ability to sell it (in good condition) in 3 years for $1700. And I would pay $300 today to ensure that this happens. Again, this option is not traditional in terms of when it can be exercised. Probably pay $300 to decide to sell it in a period of there month from months 37 through 39 inclusive.

With companies like Apple, Dell, Hp, Lenovo leading the pack in computer electronics making equipments that are more durable than previous, and with market having a lot of different people from consumers wanting latest and bestest to to consumers who are willing to buy an used iPad-1 for $200 when iPad-3 is on the market for $500. I feel that I ought to have bought a put option for my macbook pro that just had its battery explode from "normal operations".

Naked all the way, of course...

The price of the option may increase as the strike price decrease. For instance, in our original example, paying $2000 now means you can pickup the macbook pro in 3 months for just a single payment of $10.

Another consideration is that this kind of ordering of products is typically in practice anyways. Ordering a non-prebuilt configuration of laptops or cars usually means it will take anywhere from 2 weeks to a month (or more, for hot items like the Transformer Prime Tablet from ASUS) before it arrives. So, as a consumer, I'd like to actually get a discount for that delay.

My friend Waylen suggest that most normal consumers do not have the sophistication to participate in this kind of market. He thinks that only for larger purchases like yachts, private jets and other very high end consumer items would some one put so much energy into thinking about the future price of the item is. My own personal feeling is that that's not the case. There are lot of low/mid-class people, like me, who want expensive stuff and who would also like to be thrifty while at it. $100 here, $250 there, and quickly our pockets and lives are enriched at lowered money costs.

 

But he is probably right to some extent. Because the laptop is now considerably commoditized: a "Intel i7, 15" screen, 4grm, 750gb ram" laptop from Dell, HP, Acer, ASUS, Mitsubishi, Sony, Lenovo are virtually indistinguishable from each other. Instead of his individual buyers of single expensive item, I would think that a large computerized firm would probably be willing to participate in a market like this. By creating a market, we actually make the system much more efficient.

 

Additionally allowing individual buyers to participate in this market means I can get just as good a deal as my employer gets.