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Or print money, but that's if they want to give you your money back. What happens if they don't want to, because of a 1917 like revolution or whatever? I know the probability is minuscule, but higher than zero. If it isn't being priced, maybe you can buy lottery tickets for 0. I know it's a...

Why are treasury bills risk free? It may seem extremely unlikely that you don't get your money back, but that possibility exists. There's counterparty risk. If that possibility isn't being considered, or priced, then it's similar to what you said about CDS.

OK, that was the other possibility, that options with extremely high potential payoffs don't exist in something like the SP500 market now, but maybe they existed before 1987 (or 1929 or whatever). So now we should be betting for something extreme that has never happened. Something that I found...

Even if he's talking about 67000 times what you pay in theta, it still doesn't make sense. To get that much in terms of theta buying something like a $1770 ES put that expires on December 18 (premium $0.4, theta -0.009), you need the price to drop to $1770 and implied volatility to jump to...

No, no, no. Not 67000 percent. Ignore that, that's what the introduction says. In the interview Taleb talks about 67000 TIMES and 750000 TIMES. "If you owned an option that was 20 standard deviations out of the money — and I had plenty of those — how many cumulative months of time decay could...

I don't know how much they rallied, but I guess that much less than multiplying for anything remotely near to 67000. I agree with Taleb in many aspects and I love his books, but I still don't know which OTM options he's talking about. I can't see how an OTM ES option could ever jump by that...

Maverick74, could you please elaborate more? Are those numbers made up, just an exaggeration, or what was Taleb talking about? Was he talking about 67000 times in terms of theta instead of premiums? I also think that the Federal Reserve meddling will eventually end really bad (like it has many...

On the interview he talks about 67000 times and 750000 times. The introductions seems to be wrong. I can't even imagine an scenario where an option could multiply its price by 67000... That means both getting into the money from being extremely far of the money and implied volatility raising to...

That link is broken, you can read the interview here: http://www.forex-ratings.com/forex-interviews/?id=12083 "Taleb has spent the past two decades studying the characteristics of options, but it was his windfall following the 1987 stock market crash that put him on the map. His long position...

If those returns are sustainable, they are impressive. Even if he can't keep reinvesting more money, and there's a "cap" on how much he can profit, $500 000 per year is excellent, also in relative terms (unless you have like $50M). Nowadays I'm mainly reading about selling options, so I'm glad...

That's what I tried to explain to him. Caeteris paribus, if you are getting above average returns, in the long run (as your capital grows faster the the rest) you'll just get average returns. Buffet said that if he was managing less capital, he would be getting higher annual returns. It's for...

I bought some SVXY shares 2 years ago which I'm still holding. Is it reasonable to expect them to keep performing as well as they have in the past? Here you can download a simulation of how they would have fared since 2004...

How much in percentage do you expect to make per year? I'll try to find a cheaper way to learn, but thanks for your offer.:D

What about investing 1 trillion? How much you can invest without noticeably hurting your expected returns depends on the market you are talking about.

I have been thinking more about this. The problem that I find is that put options on the kind of value stocks that I buy are both expensive and much less liquid (bid/ask spreads are enormous). In some cases, options don't even exist. So I'm faced with either: 1. Buying value stocks without...

How much more you can make over just buying and holding depends on how much you want to invest and how big the market is, that's obvious. As your capital keeps increasing, then your expected returns diminish, and you finally can't get more than just buying and holding. When I created the thread...

It's literal. I played more like 1.6 million per year actually. I played in many tables simultaneously (8-30 depending on the modality I was playing), so I played from 800 to 1500 hands per hour.

Thanks for your reply. I'll keep studying and testing ideas to try to become a member of your group 3. I don't think I won't have any problem being patient and rational, that was something that I learned very well being a professional poker player. I only care about improving and making good...

Could you prove that what you are saying is true, that selling options is intrinsically superior to buying them for the reason you mention? I "feel" you are right, but I have never seen any study that convinced me, as they usually ignore events like 1987's Black Monday, or returns aren't...

If it's possible, then that means the market in aggregate makes "mistakes", like there are growth stocks (lower expected returns) and value stocks (higher expected returns). I'll keep studying, I think it's worth it. Could you recommend me something to keep learning? I feel like it's very hard...