They got the maths all wrong...

[alistera]

The height of the normal distribution has no relevance, only how painful it is for you but no one cares about that, the important numbers are the -4/3 and +3/4 sigma levels, success is defined how flat you keep the normal distribution peak between the minus and positive sigma, that is your entire trading journey, nothing more, nothing less, anyone saying anything different has less than no clue how to trade or invest.

 

[earth_imperator]

Why do you have this predilection of finding perceived faults in everything math related?

Why not? I'm just researching, investigating, testing, questioning...

First BSM was all wrong

Not true.

you kept telling every brokerage out there vicariously that they were calculating put margins wrong.

Not true. Only TDA does it wrong.

Now this. Distribution calculations, having been used for centuries, are wrong. Wrong wrong wrong.
Can't you just accept that "they" are correct and it is YOU that has the problem?

I just question everything, even my questioning everything...

 

[earth_imperator]

The height of the normal distribution has no relevance, only how painful it is for you but no one cares about that, the important numbers are the -4/3 and +3/4 sigma levels, success is defined how flat you keep the normal distribution peak between the minus and positive sigma, that is your entire trading journey, nothing more, nothing less, anyone saying anything different has less than no clue how to trade or invest.

Sounds interesting (though "wild", IMO ), can you say more about it, maybe with a real-world example?
Do you rather mean the tails at "z=-inf to z=-3" and "z=+3 to z=+inf" ?
They make up each just 0.1% or so, why do you think they are important? IMO not.

 

[longandshort]

Nothing is wrong with questioning or asking for clarification... but some humility won't hurt either!

 

[mervyn]

the height of the mode in a normal density is about 0.3989σ. google the formula, something like 1 divided by square root of 2 pie, if my recollection is still useful.

 

[earth_imperator]

Nothing is wrong with questioning or asking for clarification... but some humility won't hurt either!

Humility? I don't see any reason for it

 

[TheDawn]

And when you want something clarified, try not to use thread titles like "they got maths all wrong" and and try to ask for verification in a question like "I believe the math for the margin calculation is wrong. Can somebody take a look at this for me?" If you still want people to verify for you, how do you know they've got maths all wrong? It's very likely that you are the one who's wrong.

It also helps when you come with an attitude that people here are not as stupid in math as you think. The financial industry here is a lot more sophisticated than you think.

 

[earth_imperator]

For the CoveredCall(S=15, K=15, DTE=15, IV=30, r=0, q=0) I calculated pWin=0.657 :

Premium=0.3639
CostBasis=14.6361
BreakEven_Sx=14.6361(-2.43% dz=-0.404)
S_PL=0.3639(2.49% m=5.11%)
K_PL=0.3639(2.49% m=5.11%)
-1SD_Sx=14.1149 (-5.90% PL=-0.5212 (-3.56%))
pWin=0.657

Can anybody confirm this pWin?

 

[murray t turtle]

Humility? I don't see any reason for it

%%
Sorry, if you have to learn everything the hard way, good road to ruin.
Like the fossil fuels song says;
from a mail order catalog\
money made from sellin' a hawg [hog in butcher holler] Loretta Lynn Coal Miners Daughter. song > 14, 777,888 video views.

 

[longandshort]

Humility? I don't see any reason for it