David Dredge On Defining Risk, Profiting from Extreme Moves, and Convexity
Macro Hive Conversations With Bilal Hafeez
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Compounding
Compounding is a math concept that is well known. It's just not taught in the financial industry, despite being probably the most relevant concept for finance and investment. Compound returns are an average of multiparticipants in one period d. And so applying the compounded return function of systematic selling of puts, because there's a high probability that it works this month, is really poor risk management,. Just very, very poor risk management. A allows banks to functin the way theyard allows banks, let's say, hypothetically, to do swaps on with family offices where they're literally making millions and losing billions.
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