Say Tail Event in Financial Market Trading & Investment can have N paths ..There will always be some Tail event paths (higher order dynamics included like Speed, Acceleration as well) which will not be favorable for Options(being Time and Path dependent )even if cheap ,hence there is risk of huge Shoulde risk !
No matter which Options strategy is followed , there will definitely exist some Tail path where that won’t work being Path dependent. If not so, the option strategy will be path independent.. Contradiction!!
There will always be some risk whether shoulder/body/Tail or some other forms to generate enough return or else the return won't be there enough ! There is no free lunch in the market !! If there exists some gauranteed ways to Hedge all the risks and generate enough return, it's unnatural for market !!
Detail in my paper...
So, one will have to come up with the change in the strategy dynamically depending upon the path..here is the role of Timing, Idiosyncratic or some other form of risks..
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