4 ms·
> The other mitigation strategy is: just buy some puts. I wonder who are the counterparties selling puts to Jane Street. My cynical view is that they are losin
by howling 4y ago
> The other mitigation strategy is: just buy some puts.
I wonder who are the counterparties selling puts to Jane Street. My cynical view is that they are losing overall but the traders don't care because they are winning in short term (when nothing happens) and may have already changed their job when the market crashes.
- adchari 4y agoThey don’t really have to be losing in the long term, being short deep out-of-the-money puts nets you an option premium if the underlying never crashes, and once you delta-hedge that position, you can remove the tail risk from your portfolio
- howling 4y agoYes it's not necessary for them to be losing in the long term for Jane Street to be profitable, but I suspect they are.