Why Traders Need To Focus on Asymmetric Returns 3
Everyone wants to make life changing sums by trading bubbles & crashes.
But, pursuing asymmetric returns is very difficult, as illustrated by Newton & Bitcoin.
Why Traders Need To Focus on Asymmetric Returns 2
Understanding how to go about making asymmetric returns is simple enough, but actually being able to do it is not.
Sir Isaac Newton demonstrates why.
Why Traders Need To Focus on Asymmetric Returns 1
Hang around traders or investors long enough and you will hear the phrase “asymmetric returns”.
What exactly are they, and why are they so important?
Why Convexity Is Important In Choosing Your Career 2
We can’t avoid convexity and its effects, but we can make decisions with an understanding of the risks we are taking relative to what we receive in exchange.
Why Convexity Is Important In Choosing Your Career 1
Convexity also applies to our employment choices. Jobs have different levels of convexity based on cyclicality, but do they pay enough to account for this?
How Regulators Are Making Finance More Fragile 2
Simply throwing more capital at the financial system does not allow it to move as the financial ground shifts, with potentially catastrophic consequences.
How Regulators Are Making Finance More Fragile 1
Concentrating risk into central clearinghouses sounds like a good idea, but only serves to create a gigantic short convexity position in the middle of the financial system
Focus On Convexity: How It Applies To Banks
Now that we understand what convexity is and how it applies to markets and life, we can use it as a lens through which to view the financial system.
Focus On Convexity: Long Or Short, That Is The Question
Imagine that you just started trading, and a more experienced investor offers you a choice: Death By A Thousand Cuts, or Getting Flattened By A Steamroller?
Focus On Convexity: Trading On The Long Side
If a trader being short convexity runs the risk of getting flattened by the proverbial steamroller, what about traders who are long convexity?
