I try to look for a symmetric trades that benefit from ignoring tail risks.
It also serves as a hedge for my portfolio.
For example, I bought a out of the money put debit spread on SPY with a risk reward of 15 to 1. Looking at market returns, the probability is about 17%.
It's what Nassim Nicholas Taleb calls Antifragile, things that gain from disorder. I wrote a post about it.
I try to look for a symmetric trades that benefit from ignoring tail risks.
It also serves as a hedge for my portfolio.
For example, I bought a out of the money put debit spread on SPY with a risk reward of 15 to 1. Looking at market returns, the probability is about 17%.
It's what Nassim Nicholas Taleb calls Antifragile, things that gain from disorder. I wrote a post about it.
I’ll take a look at the article. Thanks for sharing.
Nice write-up. Financial markets always overshoots on expectation basis. That's how the term 'Buy on Rumour, Sell on Fact' came about.