View Full Version : Derivatives trading and poker

08-04-2005, 04:49 PM
Are there any derivatives strategies that are analagous to poker strategy?

The things the come to my mind are:
1. Play only your best hands - Invest only in instruments you have a high chance of making a return from
2. Win money not pots - Maximize earnings from transactions, don't make tons of transactions

Any other ideas?

I am asking for interest sake, for an interview I have with a derivatives group tomorrow, as a point of conversation

08-04-2005, 06:12 PM
I think the fallacies have more in common than the strategies.

08-04-2005, 07:07 PM
1.)How about deviations from a standard Black-Scholes price is analagous to accounting for implied odds, discounted outs, etc?

2.) The premium paid for short term options due to a higher relative volatility could be compared to the short term luck/volatility of poker, vs the more consistent return after a longer playing period.

Both of these are pretty weak, but I tried. Let me know if you end up using them.

08-04-2005, 07:25 PM
what would the fallacies be?

08-04-2005, 07:26 PM
thx! I will definitely think about these..

08-05-2005, 09:36 AM
What derivatives trading firm are you interviewing with?