Moontower #330

In this issue:

• academic acceleration
• wrapping up Kelly
• option topics from the RH Summit
• game and food recs

Friends,

One of my close friends runs an advisory for HS students applying to college. He wrote this guest post years ago: Moneyballing College Admissions.

He lives in the Bay Area and told me he’s seeing more parents complaining about the lack of acceleration options in the public school. He said outside CA it’s becoming far more common for high schoolers to take AP Calculus BC before senior year. My 8th graders’ goal is to take it by junior year, giving himself a chance to take Multivariate Calculus by senior year at a local college. This is already offered in some high schools across the nation, including some on the peninsula. Just this week, I talked to someone whose 9th grader was in Calc BC. That only sounds crazy if you haven’t been paying attention to what I’ve been sharing about Math Academy students (my 8th grader says his 5th grade little bro is already doing the same stuff his “advanced” math class is doing.)

In our local school district, we are finally seeing the pendulum swing the other way on math instruction. A few years ago, they got rid of “tracking” in 6th grade, forcing all kids, regardless of their interest/aptitude, into the same class. Well, the seeds of change are obvious in this survey I just filled out, as I don’t think we could have even had this conversation 5 years ago:

That #7 offers choices besides “supportive” and “very supportive” tells me these 2 articles are as important as I think they are.

Smarter Than Yesterday (6 min read)

Pamela Hobart argues “the academic acceleration community needs a viable brand”. Co-sign. Terrific post. I’ve had many of the same thoughts, especially as my kid’s schoolwork will leave me wondering, as Pamela has, “what are we even doing here?”

Everyone Wants a Child Like Eileen Gu (10 min read)

”almost nobody today wants the childhood that produced her.”

Violet Gordeljevic spitting truth in this one. I’ll share a few excerpts that resonated with me. You should read it to see what lands or doesn’t for you.

On Discipline and Exceptionalism

• “So when people say she sounds and talks so disciplined, and that she knows her own mind—well, yes. That is what a decade of being asked to do your best looks like from the outside.”
• “Nobody arrives at exceptional by accident. It doesn’t turn up later as a nice surprise because the child was left alone and bored for long enough.”

On Passion and Competence

• “Passion doesn’t usually come first and then get supported. Usually exposure comes first, then competence (from actually having gone through practice), and passion tends to arrive somewhere after that, because human beings mostly love the things they are good at.”
• “What is important to understand is that she could not have fallen in love with skiing, or Mandarin, or Olympiad maths, if nobody had ever put her in front of these things…A child who is never introduced to numbers will not reveal unusual mathematical ability. A child who never sits at an instrument will not discover she has an ear.”

On Modern Parenting and “Full Schedules”

• “We didn’t lighten the load at all. We drive our children to more things than any generation in history. We just stopped asking them to become good at any of it.”
• “If we are honest, the schedule is full but the demand is zero. It’s honestly like we have swapped skill for entertainment.”
• “Underneath every version of this conversation sits the same line: I don’t need my child to be exceptional, I just want them to be happy. … But being the parent who stretches a child—who asks for one more go, who expects them to learn to write something properly or figure out that math equation, who holds the line at six when she wants to quit ballet—doing this is harder and considerably less pleasant than being her friend.”

On Warmth, Adversity, and Long-Term Value

• “Protecting a child from effort is not the same as protecting a child.”
• “What separates people with more demanding childhoods from those with easy, low demand ones, isn’t how much or even what was asked. It’s rather whether the asking sat inside enough warmth to be survivable.”
• “The choice was never between pressure and love. It was always meant to be both.”

And then my 2 favorite:

• “I have met a great many people who regret being allowed to quit”
• “The thing is, children are not good judges of what they will be glad to be good at at thirty.”

Money Angle

Wrapping up Kelly

I know I’ve published a few articles on the Kelly Criterion recently, but if you prefer other mediums:

🤳🏼 This is the IG story version

If you prefer a more in-depth lesson, the lecture version with Matt Zeigler dropped this week:

📊Accompanying Kelly Slides

 

Robinhood Summit 2026

I was in Houston this week for the Robinhood Summit to help with 2 sessions.

• A “trading lab” class where Mat Cashman and I gave a lesson on buying options.
• I was also invited to play the role of “trader” on a panel featuring a few of the data providers on RH’s new agentic trading platform. You can think of it like an app store, where users can subscribe to have vetted providers’ data accessible within RH’s trading agent.

Since this panel was on the “main stage” the recording is available here:

Money Angle For Masochists

2 examples from the Summit.

Mat Cashman and I did a teach-in session to a large audience of conference-goers who use options. Here’s one idea from that session.

What does optionality actually buy you?

The simplest way to understand the value of buying an option for directional reasons is to benchmark it to the counterfactual: how do I perform relative to “if I just bought the stock?”

If you buy a call, you do better in the large up move OR the large down move vs just buying the stock. You have more upside leverage, and if the stock craters, you only lose your premium. The tradeoff is that the option strategy underperforms owning the shares on intermediate-sized moves. That’s why we say owning an option is “long volatility” even if someone resists thinking in such admittedly abstract terms.

The chart subtracts the P/L of 100 shares from the P/L of ~2.2 calls on the 1-year 110 strike, at expiry. The calls cost $2,194 and carry the same delta as shares that cost $10,000 (100 shares of a $100 stock).

The shares win between roughly $78 and $137. The gap is widest at $110, where the calls expire worthless and the shares are up $1,000, a $3,200 difference. Below $78, the calls lose $2,194 at most while the shares keep falling. Above $110 the calls behave like 217 shares instead of 100.

If you buy a call and lose your premium, you can’t evaluate if this is a good or bad outcome without considering the counterfactual.

The INTC calls and a possible Micron sympathy trade

This was one of the examples I discussed in the live stream session where we talked about combining sources of data to reason through trade ideas.

1. The print. On Sep 28th, there was notable size buying in INTC October 16 130 calls.
2. An odd expiry. It was a lot of premium spent on high gamma & theta calls which expire a week ahead of Intel’s October 23 earnings call. Why spend that much premium on a short-dated bet that rolls off before the stock’s own catalyst?
3. The sympathy hypothesis. Micron was reporting on the day I was talking after the close, Sep 30th. Maybe the buyer was using INTC as a semis proxy, owning short-dated calls to catch a sympathy move off Micron’s print. It’s one possible story, not something I can confirm.
4. Did the seller make a mistake? A seller may think “these don’t capture earnings, so they don’t deserve a premium,” or INTC shouldn’t move much in the quiet blackout period before an earnings report, ignoring possible spillover effects from MU’s bellwether report and guidance.
5. The next question. Is Micron earnings even a big deal? Look at Micron’s earnings straddle. If the implied move is small, the market isn’t expecting Micron to move much. Then the sympathy thesis loses most of its appeal, since there’s less distance for INTC to get dragged along. Turn out MU earnings were priced cheaply compared to the last few years.
6. Then look at what INTC vol already costs. Implied vol was middle-of-the-road but high cross-sectionally (ie relative to other stocks in the current market regime). Call skew was rich, though not extreme.
7. Put it together. Rich vol plus a firm call skew, the primary market for MU volatility saying earnings are going to be a non-event, and a possible story for putting the INTC buyer “on a hand” adds up to making me more inclined to want to fade the INTC call buyer. Possible trades are selling INTC straddles or, if you already own the stock, writing calls against it.
8. You don’t have to sell the 130s to fade the 130 buyer. Heavy buying in one strike lifts vol across that whole expiry. Strikes near each other move together, so the bid in the 130 calls shows up in the 125s, the 135s, and the at-the-money options too. Selling the straddle, or whatever structure fits your book, still takes the other side of this buyer. Don’t anchor on the exact strike that printed. Put-call parity ensures the entire surface gets richer.

Finally, an analogy I didn’t make at the conference, but notice how much like poker the chain of thought is. The cards you can see (ie the flop) are the measurables like IV rank or call skew. The quantity of options purchased is the bet size. The expiry is like thinking about the position they bet from (ie “under the gun” or right after the button to last position or “dealer”). One of the market-makers’ advantages is that they keep tabs on notable flow, like a poker bot which examines online players’ hand histories and tendencies.

From My Actual Life

Once the RH Summit ended, I was rewarded with some nice personal moments. I took Mat Cashman to Camaraderie in the Heights area of Houston for an exceptional meal by super chef Shawn Gawle.

Shawn is a friend of mine. He lived with Yinh and I for a couple of months when he first moved to SF to be the pastry chef at Saison. If you are in Houston, do not miss Camaraderie.

Then on Friday, Yinh and I celebrated our 17th wedding anniversary. (We’ve been together for 23 years in total).

We both played hooky and went hiking up in Fairfax (Marin County) before an exceptional dinner at Vin in San Rafael. It’s both casual (we were still in hiking clothes) and worth going out of your way for. Unbelievable eating week. Might as well. I have a colonoscopy later this week, so I need to follow some dietary restrictions for the next few days.

We also did a bit of shopping in downtown San Rafael. Picked up some used vinyl at Red Devil and also went to one of the best game shops I’ve ever been in:

This Gamescape has a shared lineage with the classic one on Divisadero in SF but the San Rafael one is much larger. Their game wall is immense and ordered from least to most complex.

I picked up these 2:

Acquire is one of my favorite games and while I have it already, this newer edition has irresistible plastic buildings. I must support this.

Brass Birmingham has been at or near the top of the BGG rankings for nearly a decade, which is Nigel Richards’ level of domination. My favorite boardgame is the first edition of Brass released in 2007, but supposedly the 2018 Brass Birmingham is much better. Time to find out.

Stay groovy

☮️