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Cake day: October 6th, 2023

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  • Hedging is done in many different ways. One of the easiest, that requires zero insight is a future hedge.

    Say I hold 1000 shares worth 5 bucks each in company Bob. If the price goes up, that’s great, but I’ll need to replace my car in three years, and I’ll need at least 3000 bucks for that.

    So, I’m going to spend some money now on buying an option in 2 years 11 months to sell 1000 shares for 3 bucks per share. That way, if Bob company completely collapses, I’ll always have at minimum 3000 bucks.

    Of course, those options cost money to buy, so I’ll have to pay to reduce my risk, but I don’t need any real insight into the market to use this kind of hedge.



  • The classic non-stock example is the apple farmer. Apple trees take a long time to grow, years before they produce any significant amount of apples.

    Suppose I plant an orchard of the new Awesome Amy Apple trees. I’m betting those will really take off in two years, so they’ll be really profitable. But since these apples are my entire income, and I’d rather not eat an entirely apple-based diet by then, I’m going to hedge my investment. I’m giving up some profit to reduce my risks.

    I’m making a contract to sell half my apples for, say, 20 dollars per bucket. Now, they might be worth 40, but they might also be completely worthless if the Perfect Pete Apple becomes more popular. So I’m giving up some potential profit in exchange for certainty by hedging.

    Another type of hedge would be me planting 75% Awesome Amy, and 25% Perfect Pete. I’m still assuming the alliteration will win the day, but by spreading my investment around, I’m reducing my risk.

    To translate this to the stock market, the first examples would be to buy options for the future. The second example is simply spreading your investments.








  • And since everyone here sucks at maths:

    Out of every 100 men, 42 voted Harris, 55 trump, so that’s about 30% more Trump voters than Harris voters (or, for every 100 Harris voters, there are 130 Trump voters)

    Out of every 100 women, 53 voted Harris, 45 Trump, so that’s 15% fewer trump voters than Harris voters (or, for every 100 Harris voters, there are 85 trump voters.)

    So men voted for trump at 130/85~53% higher rates than women. Or, for every 100 female trump voters, there are 153 male Trump voters (assuming the number of male and voters is equal) meaning women make up roughly 40% of his voter base.



  • Tar_Alcaran@sh.itjust.workstoMemes@lemmy.mlDeception
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    10 days ago

    “Unlike Kamala, I will support Israel’s right to win its war on terror. They have to win! And instead of pandering to the Jihad sympathizers and America-hating radicals, we will deport them.”

    • D. Trump, verbatim, on Nov 6th.

    But yeah no, this will definitely improve things.