I told you BS was BS!

taowave said:
LOL,I was hoping you wouldnt ask that. I left the IB world a while ago and we did price off of BS,but I havent used it since . FWIW,I was the trader,not the quant.

I started as a market maker on the trading floors,and I now make markets in selected equities options..No need for any modeling...First come first served.
Its all I do as i have discovered an inefficiency which is slooowly evaorating...

Now,if I was making markets in longer dated options I would use it,despite its "flaws"..

I guess what I am asking you is if your model comes up with vastly different values that are outside the bid ask of the listed equity options??

And if so,would you blast away,delta hedge due to the perceived mispricing per your model??
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Wait, so now that you work directly with making a market in options, you don't even use BS because you found another better inefficiency that is based on the data. I mean, dude, that is my very point.

To be fair, I don't have a model. I don't do these things, it's going to take research. My point is simply that because BS violates all the properties of good modeling, I have confidence that given the opportunity I could beat it using sound stat modeling if I could get someone to present me a use case with benchmarks to beat. And if I can't beat it, then well, won't that feel like a small vindication for a few of you.

If I was trading options, which I don't because I haven't finished my analysis yet, I would simply use them as a means to increase leverage and take short short side without having to sell anything. Simple, straight forward, easy to understand. Just the way I like it.
 
smacdtrader said:
I'm saying if you were facing wider diversity in competition 35-40 years ago, you might not be able to fail up. I mean you are definitely a man. Right? Older than 55? Maybe not white, possibly asian, which in STEM is no different from socio-economic bias back then.

I'm broke?

Definitely not an overachiever for sure. I'm a just-enough achiever.

No I am not making a comparison between a dead language and math. Now I'm starting to see why you are having a hard time making arguments.
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Concur. There seems to be a lot of African-Asians that are placing in the Putnam circa 2023. I hope that I did not offend anyone.
 
smacdtrader said:
Wait, so now that you work directly with making a market in options, you don't even use BS because you found another better inefficiency that is based on the data. I mean, dude, that is my very point.
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lol he's referring to synthetics, parity and arb-relationships. Solving for the price of the put(call) with the share price and the call(put).
 
poopy said:
That's super convenient. What an amazing success story.
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thank you.

i have offered to post trades from a personal account daily for the next month if somebody else will do the same. a gentleman's duel if you will.

maybe, you sir are up for it?
 
poopy said:
Nothing, ofc. He can't value a synthetic or a box. They think they come off as knowledgeable to knock BSM.
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I obviously don't give a crap what other's think about what I say. That at least should be obvious. I thank mr Kevin above for saying something real and giving me something to work with. Might take a few months, but we'll see what pops out of it all.
 
smacdtrader said:
no, of course it will not, but it might keep you from making so many aggressively arrogant comments about how dumb a plebian like myself is compared your vastly superior understanding of markets.
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Why would you enter into an argument about a topic of which you have zero knowledge?
 
smallDtrader said:
no, of course it will not, but it might keep you from making so many aggressively arrogant comments about how dumb a plebian like myself is compared your vastly superior understanding of markets.
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Plebeian, you mean?

(Latin School of Chicago).
 
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