Discover and read the best of Twitter Threads about #OptionBuyers
Most recents (1)
#Options have same maths as #Insurance.
Insurance Companies win because:
1) #Mathematically Options are priced expensive,
2) With their deep pockets writing large enough number of options the #Probability works for them,
3) Endless Covenants to the Contract protect 'em
1/n
Insurance Companies win because:
1) #Mathematically Options are priced expensive,
2) With their deep pockets writing large enough number of options the #Probability works for them,
3) Endless Covenants to the Contract protect 'em
1/n
Thus #OptionSellers can hope to win OVER TIME if they have the same wherewithal as #Insurance Sellers, i.e.:
a) Deep Pockets
b) Very large number of trades over time
c) Math / Actuarial Skills
d) Legal Wherewithal.
Thus option sellers will be destroyed at some point.
2/n
a) Deep Pockets
b) Very large number of trades over time
c) Math / Actuarial Skills
d) Legal Wherewithal.
Thus option sellers will be destroyed at some point.
2/n
#OptionBuyers are hoping beyond hope! They are in a worse position than #OptionSellers because:
#Probability is loaded against them & that makes a pressure to achieve #Extraordinary #Market Timing
3/n
#Probability is loaded against them & that makes a pressure to achieve #Extraordinary #Market Timing
3/n
