No, that's not what zero-sum or positive-sum means at all. https://en.wikipedia.org/wiki/Zero-sum_game
I plotted many underlying prices and indeed all had fat tails (closer to Laplace than Normal). But even then, the tail events are quite rare. Can you comment on Taleb's method?
>> "Stop being so smug. It's unbecoming of you given you are trying to start a hedgefund on like $500". (newwurldmn) On almost every one of your posts you're patronizing and insulting me. I'm not interested in your opinions, you add nothing positive to the discussion. Stay out of my threads.
This is what your link said: In any case there are some great posts on this thread as I gained some very valuable insights.
Hi An interesting discussion. The example from @ajacobson is good , but when the market maker buys the put he is probably buying it at the ask price. So he will lose what he gained selling the call. And not to mention the interest that he will pay for being long stock. And the fees and commissions. So not easy. As a retailer I have tried to think about and also to use some arbitrage techniques. I don't like to choose a market direction. It is very difficult without having the same tools the Market makers have . When I use these strategies more than 50 % of the gross profit goes to the broker with commissions and interests. So the broker is also your opponent. I don't know exactly how market makers work but I think one of the main edges for them could be not having a broker. You could be a quant, searching for statistical arbitrage, and be very good but if you don't have the tools, i.e. low margin, and low commissions and interests, it will be very difficult for you. It's only my opinion. By the way, do you think a broker would contract me to generate lots and lots of commissions and interest without risk ? Ops, I think this is what I am already doing. thanks.
Perhaps don't say "By the way, anyone calling themselves a quant should know this." The tone of this sentence is condescending and patronizing. Don't be wrong when you're condescending on someone. Don't give people a reason to be a jerk back to you.
If you ignore what people say and focus on the substance of what they're saying, life is a lot easier.
Aquarians, give us an application of Ito without using Wikipedia. Until that time... stop with these absurd threads. The world needs ditch diggers too.