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I think it's even worse than you think with IB. They charge you 16% on the RUB for the portion you're short, and pay you either 0% (5% if you have over 700,000 RUB) if you're long. If you're going short RUB you get 0% on your USD and pay 16% on your RUB so you're carry cost is 16%. The futures...

ES options are not cash settled! ES futures are cash settled, but the options expire into an ES futures position if the option is in the money. For example if you had 1 itm weekly call option today you would end up buying one ES contract at the call price which you would now own over the...

OptionsXpress. They don't have quite the trading range of IB, but have what I need, and their commissions are competitive with IB for the securities I trade. They don't screw around with margin or auto-liquidate, which means I've only had to interact with their customer service team once and...

IB looks great on paper but has hideous customer support, essentially their CS agents know nothing about stocks, options, or the securities industry and blame everything on this ever present "algorithm" that makes what appears to be random decisions impacting your account. They also have funky...

This is a risk with any ETN. At some size the issuer can't hedge the underlying any more and closes the creation unit process, allowing the note to trade at huge premiums to NAV.

They made $130M last year on the spread, a relatively risk-free way to almost print money. No reason in the world to make a bet on the market when you can make that kind of money with minimal risk, even if your B book had spectacular returns. Their investors didn't give them a $2.75B market cap...

Yeah, sounds like a spectacular short opportunity to me.

The excess price in S&P 500 OTM puts is real, but it's also a picking nickles up in front of a steamroller kind of thing that's hard to take advantage of without putting yourself at pretty big risk for a continual small upside. Taking advantage of unknown future realized volatility is taking a...

I love flying but truthfully it's a really hard place to make money. I think Branson had it right when he said "If you want to be a Millionaire, start with a billion dollars and launch a new airline." My personal theory is that you have a bunch of super smart, type A engineers who become pilots...

I think the situation in very analogous to how a startup manages to compete in an industry with big established companies with far more resources and experience. In general you use a form of judo to take advantage of their bureaucracy and momentum and take over some niches that aren't worth it...

A bit of advice you can take for what it's worth based on this and several of your other recent posts. In general, options and other derivatives are efficiently priced based on the likelihood of the underlying events occurring up on which they are based. You aren't going to be able to...

I've been flying since I was 16, owned a plane since I was 20, and was a professional pilot for many years, much of it flying helicopters and running aircraft maintenance programs. I'm also an entrepreneur who's started several companies and I'm generally very bullish on startups in general...

When you say "skewing the ratio of takers to makers" you mean the red states will finally have more "makers" than the blue states, unlike the situation today? With a few exceptions, it looks to me like the red states "take" a whole lot more than the blue states...

Perhaps they can, but they won't. No-one creates an instrument that's 100% guaranteed to lose money for the creator. Someone needs to take the other side of every instrument and no-one is going to take the opposite side of a risk-free arb trade, which is what an instrument that tracks ^vix is...

It's not possible to trade exactly like ^vix. A variety of reasons, but the most intuitive is that if you could do that you'd have a risk free arbitrage situation with the futures.

I would tend to agree. I guess one reason is if you wanted to balanced exposure over time over several months that the ETFs give you. You could replicate but with a small portfolio you couldn't manage the daily roll as efficiently as the ETF can.

They're not all black boxes but these two certainly are. They're "discretionary" and the bounds of what the the manager can do are pretty broad and therefore scary. You really have no idea how the things are going to respond to a given change in VIX futures and the response may change from day...

Just out of curiosity, what's the largest cash purchase you've made (roughly) and don't you find vendors reluctant to accept a large amount of cash? If I was a car dealer I'd much rather not have you pay $50K in cash; now I have to store it, keep it safe till I get it to the bank, count it... I...

So you really believe the majority of those 500 euro notes are being used to conduct legitimate commerce? If so I've got bridge to sell you. Like I said, go buy your gold and head for the post-apocalyptic hills if you really believe in the vast conspiracy, it's the only rational thing to do...

This has been an AML issue ever since it was issued. Has nothing to do with a "war on paper currency", but go ahead and buy gold if you're paranoid.