The Israeli SpeculatorThe Israeli SpeculatorThe blog for the rational and skeptic investor. Philosophies about investing and trading NOT about lame techinques that work for no one. This is not your typical investing blog 
Articles
Blame The Speculators!
2008-03-01 12:46:00 Unless you have been in a different planet, you know that the Dollar has declined in value against all major currencies in the world, even against the Israeli currency known as NIS (New Israeli Shekel). In January alone, the Dollar has declined about 7% in value against the Shekel. What followed after such a dramatic ... More About: Finance , Blame , Speculators
Blame The Speculators!
2008-03-01 12:46:00 Unless you have been in a different planet, you know that the Dollar has declined in value against all major currencies in the world, even against the Israeli currency known as NIS (New Israeli Shekel). In January alone, the Dollar has declined about 7% in value against the Shekel. What followed after such a dramatic ... More About: Finance , Blame
Why is the Option Price NOT its Expected Value
2008-02-17 08:46:00 I stumbled upon Peter Carr’s site and saw a very nice explanation on the arbitrage principles that govern option pricing. Usually explanations on option pricing are very cumbersome and not clear. Here is my take on it, but you can just go to his website and find it in the research papers under FAQ. Suppose you ... More About: Price
Why is the Option Price NOT its Expected Value
2008-02-17 08:46:00 I stumbled upon Peter Carr’s site and saw a very nice explanation on the arbitrage principles that govern option pricing. Usually explanations on option pricing are very cumbersome and not clear. Here is my take on it, but you can just go to his website and find it in the research papers under FAQ. Suppose you ... More About: Price
My current projects
2008-01-26 12:33:00 Hey everybody! I haven’t been updating this blog for about 2 months I think due to personal issues I had. I was also unable to answer any emails you had. But I am currently back in business! I am currently testing to see whether there is any merit in using the implied risk neutral distribution as a ... More About: Projects , Current
My current projects
2008-01-26 12:33:00 Hey everybody! I haven’t been updating this blog for about 2 months I think due to personal issues I had. I was also unable to answer any emails you had. But I am currently back in business! I am currently testing to see whether there is any merit in using the implied risk neutral distribution as a ... More About: Projects , Current
Back To Basics - Part I
2007-11-01 12:18:00 When participating in a forum about option trading, I have noticed that some of the participants did not know about a few basics relations in pricing options. The question I saw was a long the line of “The difference between Call 100 and Call 90 looks very big to me”. It had occured to me that ... More About: Back , Part , Black Scholes , Back To Basics , Basics
Back To Basics - Part I
2007-11-01 12:18:00 When participating in a forum about option trading, I have noticed that some of the participants did not know about a few basics relations in pricing options. The question I saw was a long the line of “The difference between Call 100 and Call 90 looks very big to me”. It had occured to me that ... More About: Back , Part , Black Scholes , Back To Basics , Basics
Back From Hiatus
2007-10-20 00:21:00 Hey Guys, I am sorry I didn’t get the chance to update the Blog. I was working with partners of mine on a project totally not connected to this blog. I did not realize it would take so much time from me. It was VERY long and I am proud of the outcome. It is an ... More About: Back , Topic , Hiatus
Back From Hiatus
2007-10-20 00:21:00 Hey Guys, I am sorry I didn’t get the chance to update the Blog. I was working with partners of mine on a project totally not connected to this blog. I did not realize it would take so much time from me. It was VERY long and I am proud of the outcome. It is an ... More About: Back , Topic , Hiatus
Are You a Rational Trader?
2007-09-19 10:19:00 The following example is taken from the work of Kahneman and Tversky: Consider the following scenario: Linda is 31 years old, single, outspoken, and very bright. She majored in philosophy. As a student, she was deeply concerned with issues of discrimination and social justice, and also participated in anti-nuclear demonstrations. Which is more likely? Linda is a bank ... More on this topic (What's this?) Big Moves For Bank Stocks (Investment U, 9/14/09) Judge Rakoff Rejects Bank of America-Merrill Settlement, Orders Trial (naked capitalism, 9/14/09) IMF Head Says Crisis Set to Continue (naked capitalism, 9/12/09) Read more on Banking, Historical Volatility at Wikinvest More About: Rational
Are You a Rational Trader?
2007-09-19 10:19:00 The following example is taken from the work of Kahneman and Tversky: Consider the following scenario: Linda is 31 years old, single, outspoken, and very bright. She majored in philosophy. As a student, she was deeply concerned with issues of discrimination and social justice, and also participated in anti-nuclear demonstrations. Which is more likely? Linda is a bank ... More About: Rational
Why An Option is NOT a Good Investment
2007-09-18 10:32:00 Before you start yelling at me and tell me how can I say they are not good investment if I myself trade them, let me explain what I mean by that. It is true that I trade options, but only for short term trading. I usually get rid of my options in the same day. ... More About: Investment , Good
Why An Option is NOT a Good Investment
2007-09-18 10:32:00 Before you start yelling at me and tell me how can I say they are not good investment if I myself trade them, let me explain what I mean by that. It is true that I trade options, but only for short term trading. I usually get rid of my options in the same day. ... More About: Investment , Good , T A G
Happy Shana Tova - When Analysts Predict
2007-09-15 09:57:00 Happy new Jewish year! I have come across a news article in Hebrew on some predictions of analysts to the upcoming year. As always it serves for good laughs and fun. As you already know, I consider those prediction to equivalent of witchcraft. One Economist says that 2008 would be a very tough year because of ... More About: Finance , Happy , Predict , Hana , Anal
Happy Shana Tova - When Analysts Predict
2007-09-15 09:57:00 Happy new Jewish year! I have come across a news article in Hebrew on some predictions of analysts to the upcoming year. As always it serves for good laughs and fun. As you already know, I consider those prediction to equivalent of witchcraft. One Economist says that 2008 would be a very tough year because of ... More on this topic (What's this?) Guest Posting at The Big Picture (Financial Armageddon, 9/2/09) U.S. economy humming along nicely (The Mess That Greenspan Made, 8/7/09) Is The US Economy On A Death Spiral? (InvestorCentric, 7/10/09) Read more on U.S. Economic Cycles at Wikinvest More About: Finance , Happy
Is the delta a good measure of risk?
2007-08-28 14:40:00 For those who do not know, the delta is the sensitivity of an option to a movement of the underlying. This can be extended to a portfolio in which the delta reflects the sensitivity of the portfolio to the underlying. It is usually the case that the delta is given to us by the software ... More About: Risk , Black Scholes , Delta , Good , The D
Is the delta a good measure of risk?
2007-08-28 14:40:00 For those who do not know, the delta is the sensitivity of an option to a movement of the underlying. This can be extended to a portfolio in which the delta reflects the sensitivity of the portfolio to the underlying. It is usually the case that the delta is given to us by the software ... More on this topic (What's this?) Position Sizing: How to Limit Risk & Maximize Gains (Investment U, 7/28/09) Another Lehman Mess: No One Can Run the Software (naked capitalism, 9/11/09) Thinkorswim Software Platform Update (LongShortTrader, 9/12/09) Read more on Risk, Computer Software at Wikinvest More About: Black Scholes , Delta , Good
Site Would Be Down For Maintenance
2007-08-21 13:51:00 Hello guys, Sorry for not updating the site in the last week. I am working on another program and of course you could download it for your enjoyment. It is some kind of a trading platform. I am also moving in the next hours the website to another database and I’ve been told the site would ... More About: Site , Maintenance
Site Would Be Down For Maintenance
2007-08-21 13:51:00 Hello guys, Sorry for not updating the site in the last week. I am working on another program and of course you could download it for your enjoyment. It is some kind of a trading platform. I am also moving in the next hours the website to another database and I’ve been told the site would ... More About: Site , Maintenance , Tena
Panic and Euphoria
2007-08-07 22:47:00 The crazy roller coaster in the Israeli market and in the world markets made me very busy. The Israeli market was very volatile and exciting at the same time. A true trader thrives in these situations. The public and press are always behind A nice indicator I use, is what I call the crowed and press indicator. ... More About: Panic , Euph , Euphoria
Review of Taleb?s New Book : Black Swan
2007-07-29 10:55:00 I had finished reading Nassim Taleb’s new titled The Black Swan : The Impact of the Highly Improbable. It was a very nice read. Although I’d say if you are familiar with Taleb’s work this book may be a bit repetitive. I’d try to give here the main points of the book and how it is ... More About: Books , Review , Book
Lessons To Be Learned From Poker
2007-07-15 10:24:00 Here are some things I have learned from playing Poke r that are very applicable for trading: Play tight and aggressive. If you don’t have a good hand, don’t buy in. If you have a good hand, play aggressive. Playing is best if you have an edge. Think about probabilities. There is no point in getting ... More About: Lessons , Esso , Learned
Pairs Trading - An Introduction
2007-07-13 17:45:00 Pairs trading is some of the techniques hedge funds use in order to make profit on the dynamics between two stocks. The basic idea behind is pretty simple. Let’s consider an example of two stocks that might be somewhat correlated. This could be two companies in the food industry or the computer industry that might ... More About: Trading , Introduction , Intro
Implied Volatility Calculator and Graph
2007-07-11 19:30:00 There are several programs out there that purport to give you an accurate picture of the implied volatilities. Sadly, some of them are not accurate at all. I had put up a nice(?) program I wrote in Matlab to compute the Implied Volatility of options on a set of strikes. The good thing about the ... More About: Calculator , Graph , Lied
Capturing Investors? Expectations
2007-07-03 13:36:00 Is it possible to “capture” the expectations of investors? How is it even possible if each investor has his own expectation of where the price should be? Some Background Determining expectations when investing is important in order to price financial instruments. Take for example pricing an option with a strike of 100. If I expect that the ... More About: Finance , Investors , Expectations , Turin
A Nice Option Strategy
2007-06-28 20:59:00 I’m a big fan of simple option strategies. Complex does not always mean better. Some people often neglect option strategies that hedge risk. This might be an investor that buys a stock and also buy a put to protect against a drop. The analogy in this case is buying insurance in which the price of ... More About: Strategy , Nice , Opti , Rate
Confusing Luck With Skills
2007-06-24 22:05:00 The above graph shows the immense growth of the Israeli Stock Market. From the beginning of 2006 until last week, the TA25 made a whopping 33% return. This immense growth is evident by what I call the “hedge fund commercials” indicator. Business is good for hedge funds in Israel and these days you simply ... More About: Finance , Skills , Kill , Luck
Black and Scholes Imperfections
2007-06-18 20:52:00 I am currently reading a very interesting book by Jean-Philippe Bouchaud called “Theory of financial risks”. It is very recommended if you are mathematically inclined. The book tries to build option pricing from a different angle than the classical replication argument. These include assumption of continuous trading, constant volatility throughout the life of the option ... More About: Black , Scholes , Black Scholes , Hole , Perfection
Are Returns Log-Normally Distributed?
More articles from this author:2007-06-14 19:49:00 If you ever heard the term “Log Normal Returns” and you wondered what it means, this post is for you. I’d also throw in a graph just for you. Why assume anything to begin with? Good question. Before I tackle the question on why it is assumed (in most cases) that returns are log-normally distributed, we ... More About: Black Scholes , Bute , Turn , Tribute , Tribu 1, 2, 3, 4 |
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