Pablo

After living nomadically for many years, I recently moved back to my native Buenos Aires. Feel free to get in touch if you are visiting BA and would like to grab a coffee or need a place to stay.

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I agree this looks promising and is the reason I bought long-dated SPY calls a few weeks ago (already up by 30%). But I would feel more reassured if I felt I could understand why such an opportunity persists. What is the mental state of the person on the other end of this trade?

Can you share the spreadsheet/code on which the calculations are based?

Yeah, that makes sense, especially if combined with the feature that allows users to disagree with specific parts of the post, as Michael notes. (Though note that the disagree vote is anonymous, whereas disagreeing with a selection is public, so the two aren’t fully comparable.)

This is currently at –1 despite being a carefully reasoned post on an important topic. I wonder if the downvoter(s) would have used the disagree vote instead had it been available. (More generally, it is unclear why that button is available in comments but not in posts.)

I'm still thinking about how to hedge incase the upcoming chaos turns the market sour

Have you thought more about this? How about VIX call options?

Thanks—I understand now. I thought $855 was the price SPY would reach if the current price increased by 50%. 

If you buy a $855 Strike price call for that date and SPY increases 50% by then you get a 12x return.

I never traded options, but isn’t the return you get critically sensitive on the date before expiration by which the strike price is hit? If this happens just before expiration, my understanding is that the option is worthless: there is no value in exercising an option to buy now at some price if that happens to be the market price. More generally, it makes a big difference whether the strike price is hit one week, one month, or one year before expiration.

Are you making any implicit assumptions in this regard? It would be useful if you could make your calculations explicit.

Mmh, if there is no reason to take that particular trader seriously, but just the mere fact that his trades were salient, I don’t see why one should experience any sense of failure whatsoever for not having paid more attention to him at the time.

Still, my main point was about the reasons for taking that particular trader seriously, not the sense of failure for not having done so, and it seems like there is no substantive disagreement there.

Why do you focus on this particular guy? Tens of thousands of traders were cumulatively betting billions of dollars in this market. All of these traders faced the same incentives.

Note that it is not enough to assume that willingness to bet more money makes a trader worth paying more attention to. You need the stronger assumption that willingness to bet n times more than each of n traders makes the single trader worth paying more attention to than all the other traders combined. I haven’t thought much about this, but the assumption seems false to me. 

Audible has just released an audio version of Nick Bostrom’s Deep Utopia.

I was delighted to learn that the audiobook is narrated by David Timson, the English actor whose narrations of The Life of Samuel Johnson and The Decline and Fall of the Roman Empire I had enjoyed so much. I wonder if this was pure chance or a deliberate decision by Bostrom (or his team).

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