Bullshit. The exit determines the profit, not the entry. As an entry you can always just buy 200-300 ES points below current price, or whatever, not much thinking needed. Once you are in profits, that is the hard decission when to sell...
Fooled by randomness by Nassim
- Thread starter JCDST1979
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Bullshit. The exit determines the profit, not the entry. As an entry you can always just buy 200-300 ES points below current price, or whatever, not much thinking needed. Once you are in profits, that is the hard decission when to sell...
The problem with Taleb is that he is insecure enough that he has to not only advocate for a position, but then go on to spend most of his time and effort denouncing everyone else in the world as "sub-imbeciles". The truth is that literally no-one who seriously studies options assumes a normal distribution in the returns on the underlying and they haven't in my lifetime. To the point that I distinctly remember my finance 101 professor disclaiming nearly on day 1 that while we were going to use a normal distribution for teaching purposes, we all needed to remember that returns don't actually follow a normal distribution in real life. Do a google scholar search for "distribution of stock returns" and the first of literally 2 million papers was one written in 1972 discussing how returns are more "fat tailed" than the normal distribution, so this isn't a new concept. More recent work goes into excruciating detail on the pluses and minuses of various distributions.
We actually don't live in the fantasy universe that Taleb has built around himself where there's a clear, obvious answer that only he "gets" and the rest of the world studying and working in the subject are morons. Don't let him fool you into joining his little delusion. The truth is there's a lot of smart people doing a lot of good work in the area, the world's a nuanced place without a lot of black and white or right and wrong answers, and Taleb is an insufferable narcissist.
There is a lot of truth in what you're saying, and the few times I've seen Taleb being interviewed, he comes off as a condescending a-hole (just like his BFF Nouriel Roubini). He only rears his ugly head whenever there is a financial crisis (once every 10 years) to give you his "I warned you", and "I told you so..." spiel. But there are plenty of asset classes and traded instruments that in some shape or form, during its history, have displayed normally distributed returns. Similar to the BSM, the deeply flawed sometimes unrealistic normal Gaussian distribution bell curve is just an industry standard metric academics, practitioners and traders can reference to make a general assumption or approximation on probability or a statistically significant estimator. If everyone you're trading with is quoting and pricing with the BS model that everyone agreed is flawed but still uses, than its probably wise to utilize the same model, but acknowledging its limitations.
Anybody who blindly sells far-out put wings because they are the highest priced options in IV terms on the smile, without running realistic worst case outlier scenarios as part of their risk management, is a moron who deserves his fate during an "unexpected" crash. Similarly, anyone who blindly buys the same "teenie", lottery ticket, extremely high-skewed puts on Nassim Taleb's recommendation, but has to wait 10+ years before seeing a meaningful payout, is equally retarted.
Have you ever been to Uranus?
A sphincter says what?
Interesting. Have you ever had to make a mid-year deposit? Ever have a calendar year with negative pnl?
Maybe you just can add it to your strategy. You keep trading as you know/like and you add a couple of lottery tickets to your portfolio, they only cost 6 bucks on the SPY, and maybe you get lucky.
In an uncertain environment, you will never know if you will have to wait 10+ years, past performance doesn`t equal future performance.
Naked?
Absolutely.
doubt it man... if you bought DOTM options in March you’d be out of luck.. entry definitely has importance, as well as exit. They both play a big part. I’m thinking buying DOTM options at the top of a bull run is ideal, but even then idk I don’t trade this way