![]() ![]() The more chaotic things get, the more uncertain and unpredictable the world is, the more oil options start looking like a good deal. So the oil option is antifragile - the more the price varies, the better it will do. Before I get started on the actual Qs and As, though, I said to myself that I was going to link to this: Current Affairs’ Some Puzzles For Libertarians, Treated As Writing Prompts For Short Stories, over on Slate Star Codex, in which Scott Alexander takes the usual collection of weak-man arguments and. ![]() Best case scenario, oil goes up to $110, you exercise your option to buy for $10, and you make $99 ($100 profit minus $1 for the option). Worst-case scenario, oil goes down to negative $90 and you don't buy it, so you still just lost $1. But if there's large uncertainty - the price of oil can go up or down 1000% - then it's a great deal. Best-case scenario, oil goes up 20% to $12, you exercise your option to buy for $10, you sell it for $12, and you've made a $1 profit - $2 from selling the oil, minus $1 from buying the option. Worst-case scenario, oil goes down 20% to $8, you don't buy it, and you've lost $1 buying the option. by Mary Harrington Monday, 15 February 2021 Slate Star Codex vs NYT is a battle within the same faith The blog controversy is over different versions of the same promised land The NYT ran a startlingly partial and falsehood-adjacent hit-piece on Scott Alexander. If there's a small amount of variance (oil can go up or down 20%), it's kind of a wash. Suppose oil is currently worth $10, and you pay $1 for an option to buy it at $10 next year. What else is like this? Buying options is antifragile. What about antifragile? Taleb's first (and cutest) example is the Hydra, which grows more and more heads the more a hero tries to harm it. A rock is “robust” - neither fragile nor antifragile - it will do about equally well whether you disrupt it or not. The glass is fragile: the less you disrupt it, the better it does. The glass on the table is short volatility. Fragility is what loses from volatility and uncertainty. ![]() In this book, you will find essays concerning philosophy. Nassim Taleb summarizes the thesis of Antifragile as: Everything gains or loses from volatility. : Slate Star Codex Essays: Volume I (Hardback): Language: English. ![]()
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