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daveangel
Posts: 17031
Joined: October 20th, 2003, 4:05 pm

option hedging remarks

August 31st, 2011, 3:56 pm

QuoteOriginally posted by: listQuotenot true - if a new fangled approach can arbitrage market prices then everyone wil gravitate to it.you can not make money saying that the business is more risky than gurus teach their clients. It is only a possibility to explain unexpected losses from the perfect BS pricinghow do you know whether you can make money or not when you aren;t willing to trade even on paper ?
knowledge comes, wisdom lingers
 
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daveangel
Posts: 17031
Joined: October 20th, 2003, 4:05 pm

option hedging remarks

August 31st, 2011, 4:25 pm

QuoteOriginally posted by: TinManQuoteOriginally posted by: listQuotenot true - if a new fangled approach can arbitrage market prices then everyone wil gravitate to it.you can not make money saying that the business is more risky than gurus teach their clients. It is only a possibility to explain unexpected losses from the perfect BS pricingYou've no time for idle chit chat, don't you have an option to price?someone said we had hit a false bottom - they were/are clearly right.
knowledge comes, wisdom lingers
 
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TinMan
Posts: 613
Joined: September 21st, 2006, 9:42 am

option hedging remarks

August 31st, 2011, 4:36 pm

QuoteOriginally posted by: daveangel QuoteOriginally posted by: TinManQuoteOriginally posted by: listQuotenot true - if a new fangled approach can arbitrage market prices then everyone wil gravitate to it.you can not make money saying that the business is more risky than gurus teach their clients. It is only a possibility to explain unexpected losses from the perfect BS pricingYou've no time for idle chit chat, don't you have an option to price?someone said we had hit a false bottom - they were/are clearly right.It just goes to show, the market does have a memory.Clearly the challenge was too complex, you should have asked him to price a forward.
 
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daveangel
Posts: 17031
Joined: October 20th, 2003, 4:05 pm

option hedging remarks

September 1st, 2011, 5:25 am

Quote It just goes to show, the market does have a memory.let us hope that "list" has a memory and does not continue to pollute every thread with his ramblings.
Last edited by daveangel on August 31st, 2011, 10:00 pm, edited 1 time in total.
knowledge comes, wisdom lingers
 
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cridds01
Posts: 3
Joined: November 2nd, 2010, 2:42 pm

option hedging remarks

September 1st, 2011, 11:23 am

I'm just a stupid college kid doing a minor in finance, but isn't the call worth $33.33, with a risk neutral probability of 1/3? I must be missing something... Surely someone who writes a paper disproving BS would know how to do a discrete time binomial tree...
 
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daveangel
Posts: 17031
Joined: October 20th, 2003, 4:05 pm

option hedging remarks

September 1st, 2011, 11:35 am

QuoteOriginally posted by: cridds01I'm just a stupid college kid doing a minor in finance, but isn't the call worth $33.33, with a risk neutral probability of 1/3? I must be missing something... Surely someone who writes a paper disproving BS would know how to do a discrete time binomial tree...you are missing nothing - that is the price.
knowledge comes, wisdom lingers
 
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cridds01
Posts: 3
Joined: November 2nd, 2010, 2:42 pm

option hedging remarks

September 1st, 2011, 11:46 am

So I guess 'list' is learning quantitative finance backwards? It could be years before he finds out money actually has a time value.
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