👇Today, let's look back at the greatest tail events of the past 30 years and see what we can learn. Tail events are very large, rare stock market deviations that have major consequences for investors. The first tail event is the 1987 crash. #tailhedge #risk The most consequential crash in United States history. Luckily, the Federal Reserve cut interest rates fast enough to prevent what could have been a complete collapse of the financial system.

Did we learn anything? The true severity of market crashes is hidden by past data.

If you doubt the explosive and convex nature of out the money (OTM) options, my story from the "Flash Crash" on May 6, 2010 should make you a believer. A thread 👇 Three weeks before the "Flash Crash," I opened my first options account. I had ZERO idea what I was doing. I understood that a call was something you wanted to own if the market was going up, and a put was valuable if the market went down. (This isn't exactly true!)