- Admin
- #6
MJ DeMarco
I followed the science; all I found was money.
Staff member
FASTLANE INSIDER
EPIC CONTRIBUTOR
Read Rat-Race Escape!
Read Fastlane!
Read Unscripted!
Summit Attendee
Speedway Pass
The big picture idea is that if you place 52 bets per year (roughly one per week) and if you get close to a 50% chance of succeeding then the exponential nature of the approach could be appealing.
Buying ATM options (a 50% probability) characterize a limited downside, unlimited upside, but the options pricing ensures the EV favors market makers, not you. If you back-tested the strategy, I'm guessing it would come out a perennial loser due to theta-decay and implied volatility consistently being over-estimated.