Money Math

collar shopping

At the end of July, Dean Curnutt tweeted: The thread should sound familiar. Weeks earlier, Dean tweeted about SNDK vols presenting…

3 days ago

How I Teach Middle Schoolers To Build Stock Portfolios

If you construct a portfolio from 2 stocks and one is $100 and the other is $10, buying a share…

4 weeks ago

Delta-hedged risk reversals

We recently added multi-leg support to our Attribution Visualizer, our tool for allowing you to track an option contract’s p/l…

1 month ago

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…

1 month ago

hurst

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

2 months 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 months 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 months 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 months 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 months 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 months ago