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A guide to pricing and hedging (2003) [pdf]
- CarolineW 7y agoI hate to be "that person" ... but what is it in this paper that makes it appropriate to label it "The boy's guide ..." Answer: nothing. Nothing at all. Words matter, role-models matter, names matter, and this is just completely tone-deaf in today's world. Men (and boys) may scoff, but seeing the title is seriously off-putting. Unnecessary, inappropriate, and the problem is that the author probably has no clue. I've not looked too closely yet, and I will, but it appears accessible, accurate, informative, and useful. It may even prove to be actionable. I just wish the title was different.
- spamlord 7y agolmao
- YUMad 7y agoNice username lol
- ysr23 7y agoi agree wholeheartedly with you but just to point out it does look like this is from 2003
- bcx 7y agoI could understand this excuse if instead of 2003 it was written in 1920. That said, it only contains the word "boy" once in the entire article, and only in the provocative headline. I think we can all look past the provocative headline.
- onorton 7y agoIt does in fact contain the word "man" though in a (normally) non-gendered idiom. > rather abbreviated poor man’s guide to the field edit: just realised that there wasn't a space between "poor" and "man". However, it seems from a quick google search both versions (separate and a single word) are used for this expression.
- rongenre 7y agoIn 2003, steampunk was really big, and this seems like a throwback to that neo-victorian terminology.
- dmos62 7y agoIs "the boy" a patriarchic stand-in for the word "child", or what? It seems like some kind of in-group slang. Reminds me of the British expression "old boy", meaning "man".
- onorton 7y agoThe first thing I thought of was a callback to those old books targeted at near-adolescent boys e.g. The Boy's Own Guide to Fishing. Obviously, it comes off as clumsy and inappropriate today or 16 years ago judging by the date on the footer.
- rpiguy 7y agoI am so glad several other commenters here have pointed out that boy's guides were fairly common and this is a cute reference to that genre of book. There were girl's guides too. It is not the least bit offensive nor meant to cause offense.
- dmos62 7y agoWere the girl's guides about the same things as boy's guides? By cute, you probably meant harmless. You probably didn't mean to say that gender roles are cute. I guess its harmlessness is up for debate. My position on the matter is that there's no place for socially constructed gender roles in this society, and it's not cute.
- rpiguy 7y agoGirls guides were about the activities most girls were engaged in at the time, cooking, sewing, etc. You never would have seen a "Girls Guide to Shortwave Radio," for example, fifty years ago because practically no women were doing it. I am sure it would have delighted a small handful of girls, but that is not how markets work. You don't print a book if it is not going to sell. I generally disagree with your position on gender roles, which I think evolve naturally and are not necessarily bad.
- 7y ago
- spzb 7y agoI agree. The only thing I can say in its defence is that it's from 2003. Not a million years ago but I'd like to think we've moved on a bit in 16 years.
- merpnderp 7y agoThe title is obviously tongue in cheek and meant to be light hearted. I mean the article's first sentence is "There is an unfortunate strain of pedantry..." And given that in 2019 you can't use the joking title "A boys guide..." to anything anymore, the world has become much more pedantic. Humor will no longer be tolerated if even a single person doesn't think it is funny.
- grey-area 7y agoAgreed, and it's disappointing that you're getting downvoted for pointing this out. It's probably an attempted play on words based on guides for boys, but yes, it's pretty tone deaf for something published anytime in the last 50 years or so.
- belorn 7y agoArticles with gender in the title tend to get complaints. If it has women, men, boy, girl, male or female in the title, there is almost always a comment complaining to that fact. I think it would improve the comment environment if HN had a title policy against using gender in it unless the article is clearly focused on it and has something new to contribute on the topic of gender. A lot of article titles would benefit by simply removing it.
- magashna 7y agoIf you can't get over a word being used in the title then how can you be expected to grasp the content? Child-proofing the internet is absurd
- TheAdamAndChe 7y agoIgnoring gender and gender dynamics on social media will not solve the issue in real life, it will just further the perception that social media is disconnected from reality. In my opinion, it would do more harm than good.
- stronglikedan 7y agoOr, ya' know, you just move past it like a normal person and comment on the actual content.
- praneshp 7y ago> I think it would improve the comment environment if HN had a title policy against using gender in it Then dang and co will end up writing articles like this one: https://news.ycombinator.com/item?id=19971454 https://news.ycombinator.com/item?id=19971454
- usgroup 7y agoI think it’s just a title in the British style from the 40s where there were lots of books with “for boys” in the title. It usually implies a gloss over some otherwise serious subject: camping, survival, the universe, etc.
- otabdeveloper1 7y agoYou're right, doubleplusungood. We really need to submit a proper report to the authorities for this flagrant violation of gender correctness rules. Thank you for your vigilance, comrade.
- dmos62 7y agoAre you giving the parent comment a soviet communist spin?
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- JustFinishedBSG 7y agohttps://en.wikipedia.org/wiki/Newspeak https://en.wikipedia.org/wiki/Newspeak
- trepanne 7y agoIt is a form of dry pedantic humor. In early 20th century USA, there were a lot of instructional books marketed at children with titles like this... "A Boy's Guide to Fishing", and so on. The author, who wishes finance students to remain focused on the fundamentals rather than getting lost in esoterica, chose a title that harkens back to these plain-spoken primers. I suppose he didn't stop to think that most of his audience wouldn't get the reference. It's about as un-PC as "The Dangerous Book for Boys", really (which my daughter read without being noticeably triggered).
- Luc 7y agoI understood the reference straight away, but that doesn't reduce how unfortunate it is when one of thousands of other titles could have worked just as well. Especially since the contents don't continue with the 'boys' theme.
- trepanne 7y agoIt would have been nice if the author had included Boy Scouts style line illustrations... I'm picturing a scoutmaster in knee socks and a kerchief on one knee in front of an easel with an options payout diagram.
- Luc 7y agoI actually bought a French version of one of these books for one of my daughters, focusing on science. But after reading through it a bit it was clear that girls were just not part of the intended public, so it didn't go under the Christmas tree. The book was nominally about science, but it had a clear second message that I didn't want my 9 year-old girl to receive, with dad's stamp of approval.
- trepanne 7y agoI hear you. One of my friends (female) is a physicist whose career has succeeded in the face of many of her peers telling her - repeatedly, for decades - that women can't be as good as men at hard sciences because their brains are just wired differently at a biological level (a traditional attitude in the field). It's pretty draining. I just can't get too exercised about "Boy's Guide" level insensitivity. If my daughter wants to go to Wall St., she's gonna need waaayyyy thicker skin than that. The biz attracts assholes and predators; it's not exactly snowflake-friendly. I mean, at least i-banks are no longer openly allowing charges at whorehouses and strip clubs on company cards, but stuff like this does go on: https://seagullreference.blogspot.com/2009/12/gross-details-emerged-from-court.html https://seagullreference.blogspot.com/2009/12/gross-details-...
- totalZero 7y agoWho cares? Stop trying to police everyone else's diction. "Men (and boys) may scoff" because this kind of criticism is totally irrelevant to the actual ideas being discussed. I know from experience that just about any person (man or woman) who has done a trading job professionally has had to put up with way worse in the time required to learn how to make money. And in "today's world," a lot of us don't care about the politics of jealous misandry.
- Luc 7y agoYou care enough to comment that someone else shouldn't care enough to comment, hmmmmm.
- paulgb 7y ago> just about any person (man or woman) who has done a trading job professionally has had to put up with way worse in the time required to learn how to make money. Whether or not this is the case, it shouldn't be, and little things like this title subtly reinforce a culture where it is ok.
- vfc1 7y agoExactly, it's about the impact of thousands of these small comments and insinuations over the years have on a group of persons. If a woman hears and reads this kind of comments over her life, she will end up believing that Finance is not for women and not even choose it as a profession.
- zdw 7y agoWhat's the benefit of these fancy financial instruments other than for someone who wants to enjoy a slower, higher stakes version of the roulette wheel at a casino (assuming the Boglehead wisdom that individual stock picking is about as reliable as that)?
- Bostonian 7y agoPut options are useful if you want to bet against a stock with limited risk.
- TuringNYC 7y agoPut options are also useful if you are stuck with a large position you cannot unload right away, but would like to cap your downside. For example: Your tech startup was purchased by a large public company, and you end up with stock you cannot sell for, say, 3yrs. You are not an insider and now just retired and have no insider info and you dont have restrictions on puts -- In this situation, you can hedge your downside. You can also do a zero-cost collar and hedge your downside funded by giving up your upside.
- JumpCrisscross 7y agoRight. The fundamental utility of options comes as a hedging instrument.
- yoyonz 7y agoLimited risk in that for the short there is potential for an unlimited loss (-infinity), while for the put option the maximum loss is the premium (-100%). But the option strategy is much riskier as a loss of -100% is significantly more likely under the put option than the short due to implied leverage, time value decay, etc.
- inawarminister 7y agoIt's good for the market liquidity.
- 7y ago
- DiseasedBadger 7y agoThis is so cool. It's like the boy's king Arthur of finance. I get a fair few channels and podcasts on engineering and such, but I haven't found a lot of good approaches to financial topics. This is great. Thank you!
- bluejellybean 7y agoCheck out the book "Options, Futures, and Other Derivatives" by Hull, it covers a huge swath of financial instruments. [0] https://www.amazon.com/Options-Futures-Other-Derivatives-10th/dp/013447208X https://www.amazon.com/Options-Futures-Other-Derivatives-10t...
- deleted 7y ago[deleted]
- ahvetm 7y agoThe mus and sigmas in this paper on risk modelling would not make Nicholas Taleb very happy
- 0003 7y agoI think he would be more offended on the general idea of risk model. His conclusion: we can't do it. Don't model risk. Set yourself up to benefit from our inability to do it.
- o_nate 7y agoIf you are a large bank, I don't think that the regulator will take kindly to the statement that you don't model your risk since Taleb says it's not possible. Perhaps a more moderate position would be not to put too much faith in models. Or as Derman writes: "Models are only models, toy-like descriptions of idealised worlds... If you listen to the models’ siren song for too long, you may end up on the rocks or in the whirlpool."
- vfc1 7y agoThe title subtly but still obviously implies that finances and investing are men's business, and not women's. I don't see how anyone can deny that. I bet that many women reading this title that work in finance don't appreciate the title one bit. The argument that it's just a joke is not acceptable, because this together with other 1000 similar remarks, or "jokes" or micro-agressions will make women choosing that field as inadequate over time. This is actually a scientific fact, that people that are told several times that they are not able to do a task or don't belong performing the task will underperform doing that same task, when compared to people that are not subjected to that treatment. Words are powerful, I wouldn't want my two daughters to put up with this type of bullshit growing up.
- eli 7y agoI think it's intended to be a reference to "The boy's guide to usefulness" and similar 19th century books for boys. But I agree with your underlying point. At best the title is careless and lends itself to misinterpretation. (Worth noting, perhaps, that the linked paper was published in 2002. I wonder if the author would have thought twice in 2019?)
- vfc1 7y agoI doubt the author would use the title today, but still, if we don't call this kind of stuff out for what it is, it just keeps happening.
- michael-ax 7y agovcf, it is what it is ... the interpretations, judgments and your subsequent reactions however are, as you are keen to explain intended to get others to censor value creators (the pdf, not the industry). its probably you that should be happy for free speech more than he.
- ColinWright 7y agoSee my reply here: https://news.ycombinator.com/item?id=19984423 https://news.ycombinator.com/item?id=19984423
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- todd8 7y agoI was happy to see this because of my interest in the subject, but I can understand that the title is a bit off-putting. A bit off topic anecdote: a few years ago, while floor trading was still important on the Chicago Board of Trade, I was getting a tour of the floor during trading hours and my guide, a very experienced commodity trader, pointed out a fellow trader that had made the largest trade in history; it was a woman.
- samnwa 7y agoIt's almost as if sometimes women do things and then other times men do things! Who would have thunk it??
- shearskill 7y agoThe actual title of the article is “A Boy’s Guide to Pricing and Hedging”. If you read the link, the above comment is more relevant.
- cs702 7y agoFrom OP: "If you want to know the value of a security, use the price of another security that's as similar to it as possible. All the rest is modelling. Go and build." Buffett: "Price is what you pay; value is what you get."[a] -- [a] https://en.wikiquote.org/wiki/Warren_Buffett https://en.wikiquote.org/wiki/Warren_Buffett
- JumpCrisscross 7y agoTime horizons are important. Buffett's capital comes from insurance float. That's very long-term capital. He can afford to buy an asset and let its cash flows pay him back. If you're balancing an options portfolio, on the other hand, shorter time horizons matter. If the stock pays back in 10 years but crashes in one, the ten years don't matter for the holder of a 12-month call option. Thus finding symmetries becomes more relevant than fundamental analysis.
- cs702 7y agoYes. Couldn't agree more. Arguably, one could call the long-horizon, volatility-ignoring approach "investing" and the short-horizon, volatility-sensitive approach "trading."
- factsaresacred 7y agoEasier to read format here: https://poseidon01.ssrn.com/delivery.php?ID=485064027065073074094076099018118107041048072043057026110092113090118025117010036040042016121077092099120030110051014037021017022027098088005112008074004109007044039005019101117091019075093125014001094031070075101125108003007077087066121104013&EXT=pdf https://poseidon01.ssrn.com/delivery.php?ID=4850640270650730...
- kokke 7y agoMy personal
- mlevental 7y agoI saw this guy speak at the yale club or something in midtown (NYC) in 2017 on risk modeling. at the time he was arguing that what the industry needed was a return to fundamentals and more intervention from traders ie the algos had run away. I haven't read the article but seeing as how he was one of the first mathematical quants on the street I wonder if this from 2003 is contrary to his opinion from 2017. Here's his book. I haven't read it but it's probably interesting. https://www.amazon.com/My-Life-Quant-Reflections-Physics/dp/0470192739 https://www.amazon.com/My-Life-Quant-Reflections-Physics/dp/...