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

Share
Published by
editor

Recent Posts

investing orbits

Here’s a summer reading book rec for investors: My wife and I are both reading…

17 hours ago

present tense

I turn 48 today. Once again grateful that another year of life insurance premium went…

17 hours ago

Moontower #320

In this issue: investing orbits present tense Friends, I save my editorializing for the section…

17 hours ago

“betting as a tax on bullshit”

🎙️Wrong numbers and why they survive | Complex System Podcast Patrick McKenzie interviews famous Wall Street quant…

5 days ago

Delta-hedged risk reversals

We recently added multi-leg support to our Attribution Visualizer, our tool for allowing you to…

1 week ago

VIX and buy signals

Here’s Victor Haghani: A high VIX1 is widely considered to be one of the cleaner…

1 week ago