How Markets Work
Snowflakes vs Lemmings
First principles or fast-follow?
Kris Abdelmessih
Risk and Edge
How Much Extra Return Should You Demand For Illiquidity?
A market-based thought exercise for pricing the value of liquidity
Risk and Edge
Path: How Compounding Alters Return Distributions
See how the path of returns can alter the distribution of p/l independently of expectancy.
How Markets Work
Making Property Taxes Apples to Apples
Different state tax regimes make home price comparison difficult.
Options Theory
Straddles, Volatility, and Win Rates
If you sell fairly priced straddles you win more often than you lose, but the expectancy is zero. Find out why.
Options Theory
Binary Straddle Example Based On The 2016 Election
When an outcome is binary with an implied probability, the straddle will tell you the expected move in either direction
How Markets Work
DCF As A Lower Bound
DCF valuations underestimate the value of an asset will trade for.
How Markets Work
You Don’t See The Whole Picture
Syngerstic bids look expensive to those without the same diversification advantages
Risk and Edge
Lessons From The Layup – Corner 3 Spread
Practice relative value thinking
Options Theory
You Can Mock Trade With A Deck Of Cards
Card games used in training
Options Theory
Mock Trading Options With Market Makers
How professional option traders trained
Options and Volatility
Finding Vol Convexity
See how out-of-the-money options have non-linear responses to changes in implied volatility
Risk and Edge
Fun Analogy Between Combinations and a Correlation Matrix
Math fun relating ideas
Risk and Edge
Where Does Convexity Come From?
Convexity is a fancy word for "my position size is not constant"
Options Theory
Why Options Trades Focus on Vega
The most important greek for long-dated options
Options Theory
Lessons from the .50 Delta option
The .50 delta option is not necessarily at-the-money. See how the .50 delta strike holds information about the underlying distribution.