I told you BS was BS!

[smacdtrader]

You are talking about lazy degenerate gamblers

Go to NY,get an interview with Goldman or Millennium and share your thoughts with them..

5 minutes..ill take the under before you are booted

First, I'm not smart, what the hell do you think I'm doing here? So sure. But your point is not even kind of made by pointing out I couldn't get a job at GS. It actually makes my point a little bit since I'm a pretty good trader.

Look, to be fair, there are intelligent people in all pools of professions, but the mean intelligence in finance is like any other average pool. Super geniuses just don't like this shit man. Go get a PhD. Hang out with people in other departments, have beers, discussions, ask them about their research, stay in touch with them throughout their lives; read philosophy, great novels and science journals. The smartest people avoid finance and trading like the plague. At best, models developed by geniuses for some other discipline get applied here, and they may nod their head to that.

 

[smacdtrader]

If you're making money in stocks, you're not going to say I've had my fill and go back to being a scientist or helping the world lol. Smart people typically don't make money in stocks. If you're talking finance, that's their business. Of course, if you go to Goldman Sachs you're going to find sharks. But let's caveat that with if you take the trader out of Goldman Sachs, he goes from being a shark to being a flounder.

Wow. I actually love you and you posts. But this is just clueless. Do you hang with any scientists? That's exactly what they do.

 

[Slow Learning Elf]

i always thought BS or any model was used for normalization rather than strict adherence

Yes, in many ways it's just an interpolation tool.

Though once you start hedging, you become dependent on the model assumptions and need to tweak them somewhat to reflect the real world. For example, index OMMs would include vol beta into their delta calculation using a simple linear adjustment. Also, for products that explicitly depend on volatility dynamics, vanilla BS is not really suitable. This mostly applies on the IDB/IB side of the world where exotic payoffs are common.

 

[smacdtrader]

It really depends on your definition of "smart". There are more Putnam and IMC winners at Citadel than at any company that is solving real-life problems. For better or for worse, finance attracts a lot of talented people because it pays and usually pays immediately.

I love it how you talk with complete confidence about things you have no idea about. You would make a great startup founder.

Fair point. This opens up a question about awards, though those particular are pretty bullet proof. I'd be curious to know how long they stay? Which was kinda my major point. And also, the concentration of finance firms worth the time for a person of that level intelligence is a fraction of a percent of the dispersion in the larger scientific world. So that easily accounts for what you're saying. I mean, obviously, I would say that there is more "intelligence" however you want to grade that, working outside finance than within, just in raw numbers.

Thank you. I love you too. Please tell me how I'm wrong, how you know I don't know what I'm talking about and how you do. Seriously, I love discovering when I'm wrong. Way more interesting than when I'm right.

 

[smacdtrader]

i always thought BS or any model was used for normalization rather than strict adherence

great point overall. but some models are better than others, and BS is trash.

 

[taowave]

LOL@ find this whole world detestable!!!!

I like the first statement..You can be smart as well as an egomaniac who thinks they know all,and refuse to listen to others who have taken their hits and lived to tell..

How long have you been on ET??

Point number 1 is painfully obvious ....

Lol. Second sentence is for the ages. No doubt about it.

But totally off on the first. I can point to like 5 or 6 that I know personally, and all by far the smartest people I know, except the ones that (right or wrong) find this whole world detestable.

 

[smacdtrader]

i'm more the egomaniac, not that smart, but I do like to talk about what I know, keeps my ego intact.

The arrogance, imo, is that everyone in finance seems to feel that this crowd is the smartest, but outside this bubble, there's way more appreciation for interdisciplinary intelligence. Except pure mathematicians. They're insular dicks. But not totally incorrect.

 

[taowave]

Wait WUT???? Did I not reply to WXtrader?? Why are you telling me you arent smart??

I was referring to WX's

"I've always said you got to be a little bit stupid to make money in the markets."

There is no room for stupid at the places I mentioned..

I got smoked at my interview at Goldman

Have you worked at a Major IB (fixed income,derivatives,structured products) or a Hedge fund ?

First, I'm not smart, what the hell do you think I'm doing here? So sure. But your point is not even kind of made by pointing out I couldn't get a job at GS. It actually makes my point a little bit since I'm a pretty good trader.

Look, to be fair, there are intelligent people in all pools of professions, but the mean intelligence in finance is like any other average pool. Super geniuses just don't like this shit man. Go get a PhD. Hang out with people in other departments, have beers, discussions, ask them about their research, stay in touch with them throughout their lives; read philosophy, great novels and science journals. The smartest people avoid finance and trading like the plague. At best, models developed by geniuses for some other discipline get applied here, and they may nod their head to that.

 

[Slow Learning Elf]

Fair point. This opens up a question about awards, though those particular are pretty bullet proof. I'd be curious to know how long they stay? Which was kinda my major point.

Most people I know who switched from academia to finance stayed their entire lives. That includes yours truly too. It's not just the money, the game itself is actually pretty fun.

I mean, obviously, I would say that there is more "intelligence" however you want to grade that, working outside finance than within, just in raw numbers.

It's a platitude. The number of people working in finance is actually relatively small. For example, the number of people employed in finance in the New York City (arguably the largest financial center in the world) is just 250k.

Thank you. I love you too. Please tell me how I'm wrong, how you know I don't know what I'm talking about and how you do. Seriously, I love discovering when I'm wrong. Way more interesting than when I'm right.

How do I know that you don't know? I simply read what you wrote and it shows that you don't really understand how OMMs function. For example, @taowave has never ran an electronic OMM (or have you), but he understands the process. Just like him, I understand the process because I used to run a market making book on the sell side and now run a book on the buy side.

Market making in options is less about "quoting" things right and more about managing risk. Unlike an HFT market maker in delta-1 products, an options market maker does not have the luxury of going home with an empty book. Instead, an OMM would be trying to flatten specific risks and those risks are described by (drum roll) his models. So the main purpose of using the model is the ability to aggregate positions in different options via their risk factors. It's a very nuanced process, but unless you're trading something exotic, Black Scholes with some tweaks is good enough for it.

 

[smacdtrader]

Wait WUT???? Did I not reply to WXtrader?? Why are you telling me you arent smart??

I was referring to WX's

"I've always said you got to be a little bit stupid to make money in the markets."

There is no room for stupid at the places I mentioned..

I got smoked at my interview at Goldman

Have you worked at a Major IB (fixed income,derivatives,structured products) or a Hedge fund ?

No, I wouldn't last 10 min in a 9 to 5 or greater hours. And why bother? I'm up 8% today sitting here trolling yall about not being that smart.

In reality, I love evey one and I come off as hating ad hominem, but I guarantee at least 90% of us would have the greatest night of our lives sitting at a bar solving the world's problems.