These strategies are zero risk strategies, so naturally coupled with low returns. Since this being zero risk, the margin requirement is very low, of the order of less than 3% in the US, which is used for generating far better returns than interest. However, in India, the margins are whopping high even on zero risk strategies! Not to mention the killer STT on expiry on ITM options!
The trade is entered only when there is profit. And not any time! Any good trader would take a trade only when he foresees a profit, and that applies here too. This trade offers the additional advantage of knowing the profit during entry itself!
1. Buy Futures, Buy PUT and short CALL (Same Strike)
2. Sell Futures, Sell PUT and Buy CALL (Same Strike)
These strategies need to be used with Euro options to remain zero risk. With American options, the option that was sold, when exercised by the buyer, would take away the zero risk.