4 ms·
Consider that even if you're right 75% of the time, if you bet all your money each time, you're going to go broke pretty quickly. Their biggest losers are prob
by cameronh90 7y ago
Consider that even if you're right 75% of the time, if you bet all your money each time, you're going to go broke pretty quickly.
Their biggest losers are probably making essentially random bets in such a stupid way that they lose all their money.
- zelly 7y agoThe Kelly criterion provides the optimum bet size given the chance of winning. The adversarial brokerage could use the Kelly criterion and only make a wager commensurate with the likelihood of the trader's failure. It should be profitable. Suppose the brokerage just puts 5% of their cash toward this. It could be a nice profit center without risking everything.
- imtringued 7y agoThey could also just keep your money since you lost it on bad trades.