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Kris Profile picture
@KrisAbdelmessih
Oct 2, 2020 • 8 tweets • 2 min read • Read on X
Moontower's Practical Money Concepts:

From personal finance to basic tools these posts cover useful ways to think about specific topics.
moontowermeta.com/moontower-mone…
moontowermeta.com/car-leases-are…
moontowermeta.com/making-propert…
moontowermeta.com/percents-are-t…
moontowermeta.com/how-much-to-wa…
moontowermeta.com/the-difficulty…
moontowermeta.com/levered-tool/

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More from @KrisAbdelmessih

Kris Profile picture
Sep 8
A thread zooming in on a section of today's moontower...how arbitrage pricing creates opportunities for directional investors
it starts with a reader question about a common source of confusion -- why cheaper OTM calls (ie lower call skew) leads to more expensive call spreads and a higher probability of the stock going upImage
my response:

distribution is like a sculpture — the volatility skew moves some clay from the right tail to the left tail, and shifts the whole sculpture rightwards a smidge.Image
Read 13 tweets
Kris Profile picture
Aug 29
Thinking a bit about how certain fields and crafts and the extent to which the intensity of the enabling technology acts as a career or skill shock absorber...to be more concrete I was thinking about writing vs other fields...
STEM fields even if you stay in the theoretical force you to learn programming. If you make movies, music, photography there's an aspect of technical + technology that comes with the territory even if it's not the focus
(writing can be a technical craft of course it's just that the enabling tools are not themselves technology intense)

Facility with technology (the longest lever and highly defining theme of modernity impacting absolutely everything) has been key to adapting...
Read 18 tweets
Kris Profile picture
Jun 14
Sharing the monkey thoughts as i mess around in GME...

I'm long that 20 lot of June 20/30 call. Despite the stock being down today, the 30s are eroding + vol is declining so it upticked in value...

also looking at the june 20/25 call spread...
the spread value has increased a lot. The vega on these options is small but not totally negligible. So look at the IV spread...it's fallen 14 points today on a spread with a penny of vega - that's a 14c rally in the spread on a delta deutral basis! Image
Since the spread is only .23 delta the vol change has kept the spread little changed despite the stock move.

Anyway, decided to roll my short 20s into short 25s (so I sold the June 20/25 cs).
Read 17 tweets
Kris Profile picture
Jun 11
Messing around a bit. Used an option calculator and ran 300% flat vol sheets vs skewed vol sheets that roughly fit the market just to see how different the distributions are (stock ref $25 in $GME)
Image
Fly density is just butterfly centered on the middle strike divided by the strike width. This is why vertical spreads are model free bets on the distribution.

A lot of call skew or vol pushes the modal outcome to the left. High call skew makes call spreads cheaper...
which implies lower probabilities of the stock going up. Which is why my original tweet is looking at how cheap the call spreads are and the market implying the stock lower
Read 13 tweets
Kris Profile picture
May 29
Enjoyed this thread that decontructs charisma.

Been listening to Founders episodes a bunch and one example that seemed to pop out a bunch was Coppola. Magnetism to spare.
Helps that it's got a healthy dose of Wooderson.

On a related note, listen to Foxx on Ferris podcast. The stories are just bonkers. Listen to McConaughey Greenlights audiobook. It's so magnetic.
The stories are so over the top and I imo very likely heavily embellished and I'm like the truth value of their stories are totally secondary to my enjoyment. But i think because it's done in a totally affirming, even generous spirit.
Read 9 tweets
Kris Profile picture
May 6
Moontower this week was effectively subtweet of all these kinds of tweets.

The tweet says nothing we don't already know while manufacturing urgency with a totally worthless "is due"

My evergreen response which despite being evergreen is actually actionable...
my personal allocation sizes relegate “expected return” to the back burner. I roll with the assumption that systematic risk is irreducible and beta returns aren’t compensation for labor/research but patience and pain tolerance. It’s a weird circular argument:
there’s an equity risk premium because if there wasn’t everyone would take a riskless rate which would then lower demand for equities, once again creating an equity risk premium
Read 28 tweets

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