Stock market addiction

https://www.youtube.com/watch?v=-9JM9suCIHs What is the optimal betting size for some given option/stock? Given a certain winning probability. The Kelly criterion determines the optimal bet size. The Kelly criterion was first derived for the use in regular gambling strategies, it was then extended to the stock market. https://i.ani.me/0327/2911/grey.jpg https://www.youtube.com/watch?v=-ePZ9WuIrVQ Just want to correct one thing on the options video. It is not a weakness of the Kelly criterion that is heavily dependent on accurate probabilities. The problem is that it is difficult to determine accurate probabilities for option contracts. The regular Black–Scholes model determines option probabilities and is good for short term options. Good until extreme tail events happen, then Black–Scholes gives you complete nonsense. You also shouldn’t trust the Black–Scholes model for long term options. The reasoning is a bit technical and would require pages to explain. But apart from that. Mostly good info. https://i.ani.me/0327/2911/grey.jpg To circumvent the bad probabilities given by Black–Scholes. It’s better to use historical winning probabilities. That is, tally up your wins and losses. Then derive historical wining probabilities based of your wins and losses. https://i.ani.me/0327/2911/grey.jpg Note: Black–Scholes model derives the famous option Greeks and the probability that every broker shows you for every option.

Rolled down option and it expired worthless. Checkmate, feels good mang. https://thumbs.gfycat.com/BonyHarmoniousAfricangroundhornbill-max-1mb.gif

Love his self deprecating humor. This guy Benjamin likes to play dumb. I think the guy is actually pretty smart. Like the way he can read technical quant papers on options made by financial institutions and then dumb down the concepts for the video. Oh you silly goose! I know what your doing for your audience xD https://www.youtube.com/watch?v=jm55pm_ZIdI . https://www.youtube.com/watch?v=8pYgz4YlQnE

@arc I don't know if you've seen The Big Short, but it's a funny somewhat accurate movie about the 08 housing bubble https://www.youtube.com/watch?v=xbiDrzTd8fE

Big Money Kek https://www.youtube.com/watch?v=7o1VD6E78s0

@a1ephy I haven't seen the big short yet but it's on my list. I got a bit screwed on CRSR but I'm glad I took my loss when it was 27 bucks a share. Every small cap stock has been like diarrhea