<t>Lets reinterpret this question a little bit.How do you really understand a phenomenon? Closed form does not always necessarily lead to greater understanding. In finance, it is crucial to understand the dynamics - what essence is captured, what is missed.I would be with Feynman on this. Models are...

<t>QuoteOriginally posted by: bryangWhat proportion of market participants understand the models describing the consequences of their behavior?As good a description as it gets. I suspect the number is very small. Pure quants with no trading experience usually miss the intuition and understanding tha...

Your option is very deep in the money if the delta is 100%. Correspondingly there is no gamma, and hence no time decay associoated with gamma. The only decay you see is funding ("carry"). So for a 100% delta option this is not a coincidence.

<t>Hi Catso,I was replying to the rather esoteric comment by HoracioAliaga. Not entirely sure what HoracioAliaga meant. Either, the article is not worth the read, or the thread not. Funny comment either way.Anyway the article is on correlation smiles in FX and Equity Markets. It was written one Frid...

QuoteOriginally posted by: horacioaliagaToo Many In, Way Too Many trying to get inBrilliant quote. Many trying to get out as well I assure you! There comes a time.....

<t>QuoteOriginally posted by: LookbackHi all,can anyone give sone insights on why does the FX carry trade works, how can we explaineconomically that there is a biais in the Forward prices?many thanksHi, it's simple enough but whether it is fair depends on your view.Nearly all hedge funds are long ca...

<t>QuoteOriginally posted by: Traden4AlphaQuoteOriginally posted by: CuchulainnQuoteAnd, yes this brouhaha is somewhat reminiscent of the "complex numbers are crazy" arguments. You have a very good memory. Tellz more.From what I've read of the history of math, lots of now-accepted concepts (e.g., ze...

Is this new, or have they always done this? Or is it only because the new Russel Crowe movie is about a trader?Any Bloomberg people here, I say tis a good thing....

Yep, TraderJoe, I think you are a nerd. I learn more every day about nerds when I visit this out of topic forum - sadly only once a month at most now.Have you ever tried your hand at any competitive sport? Till next month....

<t>You guys are extrapolating from equities. In equities you see prices, which may or may not have been simulatenously traded on an exchange and then try to imply the vols used.In FX you dont make prices, you make vols. The prices are then computed using BS formulas for vanillas.It's easier to do it...

<t>QuoteOriginally posted by: Fordeit's all in herehttp://finance.eller.arizona.edu/documents/seminars/2004-5/PCarr.Bifrost03-05.pdfMartin, This is NA from your previous institution. I have taught all my traders how to price all variance swaps in their head - they get to within 0.05% vol. Certainly ...

<t>QuoteOriginally posted by: DookQuoteOriginally posted by: flairplayI have noticed that they have certain chracteristics.First, if you ever take a stroll near the City/Canary Wharf etc and look at cars driven by finance professionals, chances are that Ferraris, Porshce's etc are often driven by ve...

<t>QuoteOriginally posted by: CollectorI ounce told a girl at work I was a Nerd, she told I only was a Geek. I think her comment must have been a nerdy way to check me out.Insecure?? I think overconfidence, how could so many smart quant-nerds loose so many billions if they where insecure in the firs...

<t>QuoteOriginally posted by: TraderJoeWomen denied entry to mosques to prayDaughters denied educationChildren "educated" to hate the WestWhat kind of religion is that?A facist one, that's what kind.Women denied entry to mosques to pray =>she wanted to pray at home, but liked going to the grand mosq...

<t>QuoteOriginally posted by: ppauperQuoteOriginally posted by: dopemanQuoteOriginally posted by: flairplayonce you know the control you should be able to come up with a static hedge involving only Europeans.I doubt this statement is true, see the paper "On the equivalence of the static and dynamic ...