I told you BS was BS!

No doubt,but I get the impression he is talking listed plain vanilla..

And if I am not mistaken,he doesnt trade options,so I am baffled

 

I was just doing it for academic completeness.

LOL. To quote an old Soviet comedian, "Let's argue about the taste of oysters with those who actually ate them"

 

yeah, i don't trade options.

I don't have a use for them right now. What's that got to do with model assessment?

short short is a typo, my bad.

Are you saying you can't measure the performance of BS in any way? Then how do you know it's good or bad? Seriously, I'm really asking. I feel like we might be getting somewhere.

 

You are a hot mess

 

And it has no use for you.

Numerical methods converge to BSM. It doesn't matter what model you use provided you are consistent in its use among strips and tenors.

 

Yes, some of us amateur retails speculate with options.

In many of the speculative situations, BS is good enough.

 

Think smacd' points is that shouldn't something that is almost universally used .... be better than it is.

 

SMAcd admits that hasnt traded options..
SMAcd boasts that he can outperform BS..

How do you outperform a Model that spits out a value?? Its a theoretical value,not an indicator..

What's next,he going to boast he can outperform Discount Cash Flow analysis??

And admit he doesn't trade stocks..

 

@Kevin Schmit you use the terms Risk neutral measure and Risk neutral distribution (RND) in many of the discussions. Can you please ELI5 these for average retail traders? what are these and how to use them practically in trading like SPX options? TIA.

 

We all know Newton's laws are just first order approximations to Einstein's laws of special and general relativity. But, I can still use Newton's laws to fly an airplane, guide a ballistic missile, control a satellite.... Unless I model the Universe, I don't need general relativity.