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> Both Palantir and Nvidia have high IVs

The relevant Greeks are delta, gamma and vega.

If your bet pays off, the price of the stock will decrease. Delta predicts how your option will increase in value with that; gamma if that relationship will accelerate or buffer. Vega, meanwhile, informs that the price suddenly crashing is volatility, which increases the value of your options.

Succinctly, if you are betting on a crash, options offer advantages. (And if the market, but not your company, gets bailed out, vega could put you middlingly in the black.)





I am not saying he won’t make money. But it won’t be commensurate with the risk he took on.

> won’t be commensurate with the risk he took on

Former options market maker here. We have insufficient data to conclude that.

I also happen to have experience unwinding correlation books after their originators shat the bed. Predicting a crisis is hard. Predicting correlations in a crisis for esoteric assets is almost impossible.

Burry wanted to bet on specific overvalued stocks. Not a general market crash. For that, puts are probably the best tool if the expectation is a sharp correction followed by, in all likelihood, a Trump put.


> But it won’t be commensurate with the risk he took on.

On what basis do you say this?




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