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I understood maybe 10% of what the article says. Can someone ELI5? Or at least answer this question: Can a broke dummy like me make money from their observatio

I understood maybe 10% of what the article says. Can someone ELI5? Or at least answer this question: Can a broke dummy like me make money from their observation and how? Edit: Thanks for the downvote. I didn't know asking an honest question to better understand a topic (which I'm sure I'm not the only one who's confused about) was against the rules. Or maybe my sense of humor flew over someone's head, who knows.

bootwoot 5y ago
Modeling the price of this product in USD results in a higher price than if you model it out in BTC. This implies that there's a risk free arbitrage opportunity. I have no idea how to exploit it.
Kranar 5y ago
I downvoted because it's a very low effort comment to ask people to explain out the whole thing to you in a simpler manner than the blog post itself. Do you want an ELI5 of Siegel's paradox? Do you want an ELI5 of a contango market, or what implied volatility is? Just blanket asking for an ELI5 without elaborating on what aspect you understood, or specific questions you have about the topic, or just demonstrating some effort on your part is low effort and places way too high of a burden on someone else to give you a good quality answer.
- IncRnd 5y ago
  > I downvoted because it's a very low effort comment to ask people to explain out the whole thing to you in a simpler manner than the blog post itself. Do you want an ELI5 of Siegel's paradox? Do you want an ELI5 of a contango market, or what implied volatility is? The poster likely didn't want any of that but what he asked, "Can a broke dummy like me make money from their observation and how?" He was asking for the practicality of using the contents of the article.
  - Kranar 5y ago
    If someone who is broke is genuinely curious whether they can make money off of an article they have only a 10% understanding of, the answer is no. I really hope that isn't something people need to be told though.
    - mywittyname 5y ago
      The "broke dummy" portion of the comment was for rhetorical purposes. It was a humorous way of asking, "What are practical applications of this knowledge in simple layman terms." Which is a reasonable question on a board not dedicated to finance. See also: <Topic> for Dummies books.
      - Kranar 5y ago
        I never criticized the dummy part of the statement and there's nothing wrong with being ignorant of a topic, everyone has to start learning from somewhere. I criticized the broke part of the statement. Rhetorical or facetious or otherwise, someone who is broke who doesn't have a sufficient understanding of finance has no way of making money off of an article they don't understand.
- throwamon 5y ago
  Thanks for the honest reply. Fair enough, I could have "shown more effort", but I didn't want to write more words just to say "I tried but failed to understand pretty much all of it". It's not that I don't know anything about the subject, I just needed to understand what problem the OP was talking about to begin with, then I'd be able to hook it into my current knowledge. Also, by being pointed to a practical application it becomes much easier for me to understand the theory, hence the way I worded it. mywittyname's reply nails my intention and thought process, and IncRnd's reply perfectly answers my question, so I hope this thread amounted to a positive contribution after all.
IncRnd 5y ago
I imagine you could replicate their covariance calculation for currency pair futures, then determine which currency to use in purchasing the target contracts. Essentially, covariance evaluates the directional relationship between the returns of two assets. No two currencies are eternally correlated, so you can also think of using the correlation or lack thereof in this endeavor.
- throwamon 5y ago
  Thank you for the perfectly succint answer, it's clear as day now.
kayamon 5y ago
Don't worry, you weren't supposed to understand it. Some articles exist because the author wanted to write it, not because anyone was supposed to read it.

bootwoot 5y ago

Modeling the price of this product in USD results in a higher price than if you model it out in BTC. This implies that there's a risk free arbitrage opportunity. I have no idea how to exploit it.

Kranar 5y ago

I downvoted because it's a very low effort comment to ask people to explain out the whole thing to you in a simpler manner than the blog post itself. Do you want an ELI5 of Siegel's paradox? Do you want an ELI5 of a contango market, or what implied volatility is? Just blanket asking for an ELI5 without elaborating on what aspect you understood, or specific questions you have about the topic, or just demonstrating some effort on your part is low effort and places way too high of a burden on someone else to give you a good quality answer.

IncRnd 5y ago
> I downvoted because it's a very low effort comment to ask people to explain out the whole thing to you in a simpler manner than the blog post itself. Do you want an ELI5 of Siegel's paradox? Do you want an ELI5 of a contango market, or what implied volatility is? The poster likely didn't want any of that but what he asked, "Can a broke dummy like me make money from their observation and how?" He was asking for the practicality of using the contents of the article.
- Kranar 5y ago
  If someone who is broke is genuinely curious whether they can make money off of an article they have only a 10% understanding of, the answer is no. I really hope that isn't something people need to be told though.
  - mywittyname 5y ago
    The "broke dummy" portion of the comment was for rhetorical purposes. It was a humorous way of asking, "What are practical applications of this knowledge in simple layman terms." Which is a reasonable question on a board not dedicated to finance. See also: <Topic> for Dummies books.
    - Kranar 5y ago
      I never criticized the dummy part of the statement and there's nothing wrong with being ignorant of a topic, everyone has to start learning from somewhere. I criticized the broke part of the statement. Rhetorical or facetious or otherwise, someone who is broke who doesn't have a sufficient understanding of finance has no way of making money off of an article they don't understand.
throwamon 5y ago
Thanks for the honest reply. Fair enough, I could have "shown more effort", but I didn't want to write more words just to say "I tried but failed to understand pretty much all of it". It's not that I don't know anything about the subject, I just needed to understand what problem the OP was talking about to begin with, then I'd be able to hook it into my current knowledge. Also, by being pointed to a practical application it becomes much easier for me to understand the theory, hence the way I worded it. mywittyname's reply nails my intention and thought process, and IncRnd's reply perfectly answers my question, so I hope this thread amounted to a positive contribution after all.

IncRnd 5y ago

I imagine you could replicate their covariance calculation for currency pair futures, then determine which currency to use in purchasing the target contracts. Essentially, covariance evaluates the directional relationship between the returns of two assets. No two currencies are eternally correlated, so you can also think of using the correlation or lack thereof in this endeavor.

throwamon 5y ago
Thank you for the perfectly succint answer, it's clear as day now.

kayamon 5y ago

Don't worry, you weren't supposed to understand it. Some articles exist because the author wanted to write it, not because anyone was supposed to read it.