Money Math

shortcuts to get implied vol from a straddle

I just want to say that you people are sick. This is the most viral tweet I can remember sending in recent times.

Because I happened to be helping the 3rd grader with improper fractions recently I saw 1.25 as 5/4 which is immediately recognizable as a square root of 25/16.

Sprinkle in some trader math that condemns you to see the sqrt(251) as 16 and you get an even more compact version:

Step by step:

The real masochism in that thread happens further below…

editor

Recent Posts

“Conversational AI custom media eats traditional media” thesis

I’d let this thread seep into your cells before we continue. Ok, now you are…

4 days ago

if it feels good you’re too late

I was chatting with a friend this week who I’m so happy for it makes…

7 days ago

hacking hope

Jared Dillian has this great essay, The Reason We Do Everything, from earlier in the…

7 days ago

Moontower #334

In this issue: hacking hopeif it feels good you’re too latethe geometry of volatility scaling…

7 days ago

Using Geometry to See Why Volatility Scales With √t

I had Claude make me a custom chalkboard app for making math and investing tutorials…

2 weeks ago

Staring at an Option Quote

Taking a small punt on gold upside before the end of the year. You can…

2 weeks ago