Money Math

DCF As A Lower Bound

Sunblock stock (SUN) makes 10% in a sunny year. Loses 2% in a rainy year. Umbrella stock (RAIN) loses 2% in…

6 years ago

You Don’t See The Whole Picture

Overpriced Or Just Overpriced In Isolation ☀️Sunblock stock (SUN) makes 10% in sunny year. Loses 2% in rainy year. ☂️Umbrella…

6 years ago

Lessons From The Layup – Corner 3 Spread

During an interview with Ted Seides, investor Andrew Tsai recounts an internship at the well-known trading firm Susquehanna in the…

6 years ago

You Can Mock Trade With A Deck Of Cards

Here's a mock trading game I learned as a trainee to simulate futures and options market making. This game was…

6 years ago

Mock Trading Options With Market Makers

I got into options trading straight out of college. In 2000, the option exchanges were bustling. The Amex in NYC…

6 years ago

Finding Vol Convexity

In this post, we will learn what it means for a position to be convex with respect to volatility. In…

6 years ago

Where Does Convexity Come From?

Unless you are a bond or derivatives trader, the term "convexity" usually just makes you want to say "beat it,…

6 years ago

Why Option Traders Focus on Vega

Options are derivatives. They derive their value from how the underlying actually moves as well as the market's perception of…

6 years ago

Lessons From The .50 Delta Option

I was chatting with a quant friend who was bouncing an options idea off me. In the course of the…

6 years ago

Shorting Bimodal Stocks

Revisiting A GENTLEMAN’S PRIMER ON SHORTING tweet My friend and former colleague Jason took exception to the viral tweet I referenced last week…

6 years ago