Luc

@okerproker @breadandposes exactly, key point is most don't pay it back and it gets wiped - pricing as paying it upfront as a guaranteed rpi+x% investment is just not correct. It's a function of discounted expected earnings + the 9% tax rate (+ early payoff option), which will be WAY less valuable

@breadandposes Ok sure but we are talking about the hypothetical rich person over the course of 30 years (and the London creative who is not paying it back fully anyways)

9% income tax is quite a lot of tax for people with rich parents to be able to opt out of

@_devott @gemchange_ltd @Polymarket @PolymarketTrade i don't really follow how this is any different to a normal option. You have an implied volatility and all the relevant Greeks, referencing an underlying price, which does have a realized vol. You can buy a binary option on btc and delta hedge using actual btc, no?

@Luc1924370 @gemchange_ltd @Polymarket @PolymarketTrade That’s true, you can use a volatility smile to see DISTRIBUTION of volatility at periods of time but u can’t forecast volatility the same way. The volatility isn’t reflected in the market but in information, and if u aren’t using info theory, then it doesn’t work.

The math that made Wall Street billions pricing options just got ported to prediction markets This paper builds the first Black-Scholes equivalent for platforms like Polymarket Treating belief volatility as a quotable risk factor, with proper tools for hedging jump risk around elections and macro events. The paper is dense but worth it:

@_devott @gemchange_ltd @Polymarket @PolymarketTrade isn't it just a binary option, which is very easy to back out an implied vol from? a lot of the options offer a series of strikes (e.g. on btc price), allowing you to see how the smile varies across maturities. Lack of liquidity is true, but idk why that makes it a future

@gemchange_ltd @Polymarket @PolymarketTrade This is so stupid, you can’t use black scholes on this No liquidity, no accurate way to determine implied volatility, the only close thing you can approx this “derivative” (if u wanna call it that) is a future, and it doesn’t even act like that. It assumes efficient markets wtf

@0xMerridew @FinanceDotExe if you're long calls short puts aren't you long delta, long upside vol, short downside vol. Could you elaborate how this is bearish pls? Agree that's a bet the surface flattens out.

@bennpeifert Do you notice much difference between trading vol in an equities space vs in a commods space?

Bored on plane flight, one hour AMA

@0xMerridew The result of this refiner bottleneck is sometimes when the arb blows out, the certified refiners just have 0 remaining capacity - they're already booked out by banks etc. So the arb can be quite hard to lock in

@0xMerridew A small note on this - the bars admissable to CME vs LBMA are different sizes, so for anyone intra exchange physical gold to close the arb, you also generally need to first ship the bars to switzerland, re-smelt them, then ship them on to an LBMA/CME warehouse

@bennpeifert Hi Benn, Have you ever traded commodity options? Beyond the general differences of commodities vs equities, are there any other particular features of the commods options markets that jump out as very different?

You have all been so lovely buying Honey's second novel and telling me about it. What little explainer do you need this morning to turn complicated financial stuff into plain language? Very happy to give you 🖤

@bennpeifert @SamF0z Hi Benn, From what I know, commodities has quite a lot of liquid listed option contracts - do you look for dislocations there at all / have you in the past? If not, why not? Do you expect it to display similar "dumb money" (QIS?) dislocations you sometimes talk about in equities?

@SamF0z these days because we trade only listed instruments electronically and passively we do not trade much FX and rates vol for example because those are primarily OTC. old days were different

On plane for an hour, give me a thread topic

@AlexanderPayton @roropsych @jeremykauffman Happy to be corrected, I may have misunderstood false positive rate

@AlexanderPayton @roropsych @jeremykauffman I think if you were exact, you'd say false positive rate means 5%*999 positives, assume it always picks up anyone with the disease, then you get 1/(0.05*999 + 1) = 20/(1019) = 1.96%

4 out of 5 doctors at Harvard cannot answer a question from introductory statistics

@Upsampled @quantian1 Afaik yes. I believe they come with the terminal, are part of the subscription, and include things like a button to open a bloomberg help chat

@quantian1 Stupid question, is the Bloomberg Keyboard still commonly used? Was it a nice keyboard? The $40 Logitech kills the vibe more than anything.

>no IB on the launchpad LARP detected

@endoftheendstar @JayJayGermany @TKL_Adam As the AI grows more capable, I'd expect the areas in which it's deployed to also grow. Suggesting that businesses will end up hosting their own is, imo, short-sited

DeepSeek has now erased $2 trillion worth of market cap in US stocks. The biggest market headwind comes when you least expect it.

@BaguetteSsSsS @peterrhague @BladeoftheS Scotland is actually a net negative, & is more negative than the rest of the UK! gov.uk/government/new…. Higher tax rates don't mean much with low salaries

@peterrhague @BladeoftheS Actually we pay more taxes, we can leave if you want? Then you can have it all to yourself

Why can't we manage this in England?