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Did you read comments Caroline made on her blog/tumblr? Not sure of the timeline but she was asking why not double down on a 50/50 bet every time (if you lose)

Did you read comments Caroline made on her blog/tumblr? Not sure of the timeline but she was asking why not double down on a 50/50 bet every time (if you lose) - you can earn "infinite" money but lose only your bet. I am not sure working somewhere means you are an expert in it. It's incredible these people managed to create a company size of FTX.

jsemrau 4y ago
> read comments Caroline made on her blog/tumblr? Isn't that the Martingale strategy? > It's incredible these people managed to create a company size of FTX. Didn't they got hundreds of millions in play money from their network (school friends). This worked while everything was going up and new cash was coming in.
- DebtDeflation 4y ago
  >This worked while everything was going up "Never confuse being long in a bull market with genius." --John Bogle
jonasdegendt 4y ago
Rookie mistake! The trick is to double your betting amount every time you lose the 50/50, until you win, and then return back to your regular bet. That’s how you turn a profit. (/s)
- throwaway777845 4y ago
gruez 4y ago
>Not sure of the timeline but she was asking why not double down on a 50/50 bet every time (if you lose) - you can earn "infinite" money but lose only your bet. I'm pretty sure you're referring to this tweet https://twitter.com/0xHonky/status/1591630071915483136 https://twitter.com/0xHonky/status/1591630071915483136 In which case she wasn't the person asking the question. Somebody else was asking it, and she was unequivocally saying that it wouldn't work.
- SanjayMehta 4y ago
  From one of the screenshots in that post, Ellison says: > (I'm not an expert on traditional finance but my impression is that it's a lot more boring; largely brokers will just try and have margin requirements conservative enough that it's very unlikely for you to actually lose all your money.) This person was managing all that money.
  - gruez 4y ago
    Mind pointing out what specifically what made you think the quote was outrageous/interesting?
    - SanjayMehta 4y ago
      Every phrase was fascinating and revealing: 1. "I'm not an expert on traditional finance" Clearly. 2. "it's a lot more boring" So I knew this guy who used to game the customs at New Delhi airport. Back in the day he would fly over to Singapore, buy some expensive electronics, and try to get it past customs without paying duty - he was a "mule." There was one particular customs agent who knew this guy and would catch him. The mule would pick flights during that agent's shift - told me that it was boring otherwise. These kids were getting a kick out of risky trades. 3. "conservative enough that it's very unlikely for you to actually lose all your money." This tells me they knew what they were up to and they didn't really care - it was part of the game. The whole saga is fascinating. Can't wait for the book/movie combo to come out.
      - gruez 4y ago
        >1. "I'm not an expert on traditional finance" >Clearly. And is that a problem? "traditional finance" is a sprawling subject. There are literally four year degrees on "finance". Yet, jane street hires (a "traditional finance" trading firm) regularly hires people with only mathematics degrees to trade for them. Other hedge funds/trading firms do the same as well. > 2. "it's a lot more boring" >There was one particular customs agent who knew this guy and would catch him. The mule would pick flights during that agent's shift - told me that it was boring otherwise. >These kids were getting a kick out of risky trades. Don't you think you're reading a little too much into this? Someone calls traditional finance boring so they must be some sort of adrenaline junkie? >3. "conservative enough that it's very unlikely for you to actually lose all your money." >This tells me they knew what they were up to and they didn't really care - it was part of the game. In some ways traditional finance's margin requirements are more conservative. Regulation T specifies that for stocks, initial margin is 50% (ie. if you buy $100 worth of stocks, you need to pay for $50 out of your own pocket), and maintenance margin is 25%. A quick search says that FTX's margins are 10% and 5% respectively. However, in other ways traditional finance's margin requirements are looser. Because they expect that the lender is a legal entity they can go after, they're much more lenient when it comes to liquidating customer's accounts. That's how lenders got burned on Archegos, because Archegos were giving excuses, the lenders believed them (also, liquidating your customer is rude and they don't want to lose their business), and didn't liquidate them. Crypto on the other hand is far more conservative in this regard, because they basically assume that the only assets you have are the assets in your account. To that end, crypto exchanges (including FTX) have margin monitoring 24/7 and will automatically liquidate customer accounts when they dip too low. So to get back to your original point, they do care, and it's something they thought long and hard about.

jsemrau 4y ago

> read comments Caroline made on her blog/tumblr? Isn't that the Martingale strategy? > It's incredible these people managed to create a company size of FTX. Didn't they got hundreds of millions in play money from their network (school friends). This worked while everything was going up and new cash was coming in.

DebtDeflation 4y ago
>This worked while everything was going up "Never confuse being long in a bull market with genius." --John Bogle

jonasdegendt 4y ago

Rookie mistake! The trick is to double your betting amount every time you lose the 50/50, until you win, and then return back to your regular bet. That’s how you turn a profit. (/s)

throwaway777845 4y ago

gruez 4y ago

>Not sure of the timeline but she was asking why not double down on a 50/50 bet every time (if you lose) - you can earn "infinite" money but lose only your bet. I'm pretty sure you're referring to this tweet https://twitter.com/0xHonky/status/1591630071915483136 https://twitter.com/0xHonky/status/1591630071915483136 In which case she wasn't the person asking the question. Somebody else was asking it, and she was unequivocally saying that it wouldn't work.

SanjayMehta 4y ago
From one of the screenshots in that post, Ellison says: > (I'm not an expert on traditional finance but my impression is that it's a lot more boring; largely brokers will just try and have margin requirements conservative enough that it's very unlikely for you to actually lose all your money.) This person was managing all that money.
- gruez 4y ago
  Mind pointing out what specifically what made you think the quote was outrageous/interesting?
  - SanjayMehta 4y ago
    Every phrase was fascinating and revealing: 1. "I'm not an expert on traditional finance" Clearly. 2. "it's a lot more boring" So I knew this guy who used to game the customs at New Delhi airport. Back in the day he would fly over to Singapore, buy some expensive electronics, and try to get it past customs without paying duty - he was a "mule." There was one particular customs agent who knew this guy and would catch him. The mule would pick flights during that agent's shift - told me that it was boring otherwise. These kids were getting a kick out of risky trades. 3. "conservative enough that it's very unlikely for you to actually lose all your money." This tells me they knew what they were up to and they didn't really care - it was part of the game. The whole saga is fascinating. Can't wait for the book/movie combo to come out.
    - gruez 4y ago
      >1. "I'm not an expert on traditional finance" >Clearly. And is that a problem? "traditional finance" is a sprawling subject. There are literally four year degrees on "finance". Yet, jane street hires (a "traditional finance" trading firm) regularly hires people with only mathematics degrees to trade for them. Other hedge funds/trading firms do the same as well. > 2. "it's a lot more boring" >There was one particular customs agent who knew this guy and would catch him. The mule would pick flights during that agent's shift - told me that it was boring otherwise. >These kids were getting a kick out of risky trades. Don't you think you're reading a little too much into this? Someone calls traditional finance boring so they must be some sort of adrenaline junkie? >3. "conservative enough that it's very unlikely for you to actually lose all your money." >This tells me they knew what they were up to and they didn't really care - it was part of the game. In some ways traditional finance's margin requirements are more conservative. Regulation T specifies that for stocks, initial margin is 50% (ie. if you buy $100 worth of stocks, you need to pay for $50 out of your own pocket), and maintenance margin is 25%. A quick search says that FTX's margins are 10% and 5% respectively. However, in other ways traditional finance's margin requirements are looser. Because they expect that the lender is a legal entity they can go after, they're much more lenient when it comes to liquidating customer's accounts. That's how lenders got burned on Archegos, because Archegos were giving excuses, the lenders believed them (also, liquidating your customer is rude and they don't want to lose their business), and didn't liquidate them. Crypto on the other hand is far more conservative in this regard, because they basically assume that the only assets you have are the assets in your account. To that end, crypto exchanges (including FTX) have margin monitoring 24/7 and will automatically liquidate customer accounts when they dip too low. So to get back to your original point, they do care, and it's something they thought long and hard about.