4 ms·

Knowing how well his bankroll can stand up to the high variance would be nice.

• foobarqux 12y ago
  Yes, risk preference is the other important factor.
  • junto 12y ago
    I had to transfer a considerable sum of GBP to EUR close to the vote. The bookies odds were a very good indication (2/7) of how many people had bet on a "No" vote. Basically the bookies odds are based on covering their backs ( and they are good at it). They don't often get it wrong. When lots of Scottish people vote on "No" then it is a damn better signal than pollsters in the street. Since the expected upside of a "No" was low (it went from ~1.258 to ~1.271 after the results came in), but the projected downside of a "Yes" was high (estimated at ~10% drop due to the 2 years of uncertainty in the markets - Scottish independence was scheduled for 2016), I decided to hedge on similar odds with the currency transfer. I'm happy with the decision. I could have got more EUR if I had waited, but that's what hedging is all about right?