Money Math

The Scaling Laws of Risk-Reduction

In a misconception about harvesting volatility, you learn that you do NOT need to scalp the gamma to isolate the vol…

2 days ago

hurst

In a random walk where trials are independent, variance scales linearly with time. Since standard deviation is the square root…

2 weeks ago

stacking carry: an inflation hedge you get paid to own

US bond yields are rising as inflation re-enters the conversation. The 10-year yield is up to 4.65% and 30-year bonds…

2 weeks ago

A devilish question for option sellers: Which VRP is higher?

A well-supported and common belief in the options world is that there is a premium of implied volatility to realized…

2 weeks ago

how to get arbed with perfect information (again)

In this issue: cross the “bridge of asses” scaling laws of risk reduction “research collector” skill The “Bridge of Asses”…

2 weeks ago

a cleaner way to compute seasonal vol

Vivek emailed me a simple question after reading yesterday’s does revenue seasonality translate to vol seasonality? post: Why not just compute volatility from…

2 weeks ago

does revenue seasonality translate to vol seasonality?

Last month H&R Block (NYSE: HRB) sold off hard on AI fears. Implied volatility soared to a new 1-year high.…

2 weeks ago

high implied vol can work for or against you

Here’s how high vol works against you It's too expensive to buy puts to trade directionally once an asset has…

2 months ago

appreciating diversification

This week, I hosted class #4 of the Investment Beginnings for local kids aged 12+. The series’ materials are here: https://notion.moontowermeta.com/investment-beginnings-course This…

2 months ago

how a high implied vol can be cheap

EWY, the South Korea ETF, was an interesting source of disagreement in our Discord about whether the vol was expensive…

2 months ago