Solving A Compounding Riddle With Black-Scholes
A puzzle that demonstrates why option models assume lognormal distributions
Selling Calls: It Might Be Passive, But It Ain’t Income
The premium you receive for writing calls is not passive income but compensation for risk
Dispersion Trading For The Uninitiated
A gentle introduction to trading implied index correlation
The Monty Hall Problem Is More Than A Game
Real-life application of the Monty Hall conditional probability problem
What The Widowmaker Can Teach Us About Trade Prospecting And Fool’s Gold
How an option market decomposes probability from expectancy
Portfolio Theory And The Invisible Option On Hobbies
Portfolio theory is a portable idea to other parts of life
Jensen’s Inequality As An Intuition Tool
Practice in distinguishing linear vs non-linear phenomena
Option Lenses
The importance of looking at options comparatively
Understanding Vega Risk
Learn how option prices depend on changes in implied volatility
Berkson’s Paradox
Why correlations breakdown in the presence of "range restriction"
Interview Questions A Market Maker Gave Me in 1999
A focus on basic probability
On Delta Hedging
The broad trade-offs when trying to isolate volatility bets
Structuring Directional Option Trades
Options allow us to express bets on the distribution of the underlying instead of just "will the stock go up or down?"
Straddles, Volatility, and Win Rates
If you sell fairly priced straddles you win more often than you lose, but the expectancy is zero. Find out why.
Binary Straddle Example Based On The 2016 Election
When an outcome is binary with an implied probability, the straddle will tell you the expected move in either direction
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