Earlier quoted context omitted.
Agreed, and it's disappointing that you're getting downvoted for pointing this out. It's probably an attempted play on words based on guides for boys, but yes, it's pretty tone deaf for something published anytime in the last 50 years or so.
To be fair, tone is in the ear of the beholder. Not to be disparaging, but I see your comment and the parent comment to be tone-deaf. I think it's just a difference of perspective.
A guide to pricing and hedging (2003) [pdf]
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Re: A guide to pricing and hedging (2003) [pdf]
#32Earlier quoted context omitted.
It is a form of dry pedantic humor. In early 20th century USA, there were a lot of instructional books marketed at children with titles like this... "A Boy's Guide to Fishing", and so on. The author, who wishes finance students to remain focused on the fundamentals rather than getting lost in esoterica, chose a title that harkens back to these plain-spoken primers. I suppose he didn't stop to think that most of his a…
I understood the reference straight away, but that doesn't reduce how unfortunate it is when one of thousands of other titles could have worked just as well. Especially since the contents don't continue with the 'boys' theme.
Re: A guide to pricing and hedging (2003) [pdf]
#33I bet that many women reading this title that work in finance don't appreciate the title one bit.
The argument that it's just a joke is not acceptable, because this together with other 1000 similar remarks, or "jokes" or micro-agressions will make women choosing that field as inadequate over time.
This is actually a scientific fact, that people that are told several times that they are not able to do a task or don't belong performing the task will underperform doing that same task, when compared to people that are not subjected to that treatment.
Words are powerful, I wouldn't want my two daughters to put up with this type of bullshit growing up.
Re: A guide to pricing and hedging (2003) [pdf]
#34What's the benefit of these fancy financial instruments other than for someone who wants to enjoy a slower, higher stakes version of the roulette wheel at a casino (assuming the Boglehead wisdom that individual stock picking is about as reliable as that)?
Re: A guide to pricing and hedging (2003) [pdf]
#35I hate to be "that person" ... but what is it in this paper that makes it appropriate to label it "The boy's guide ..." Answer: nothing. Nothing at all. Words matter, role-models matter, names matter, and this is just completely tone-deaf in today's world. Men (and boys) may scoff, but seeing the title is seriously off-putting. Unnecessary, inappropriate, and the problem is that the author probably has no clue. I've…
Articles with gender in the title tend to get complaints. If it has women, men, boy, girl, male or female in the title, there is almost always a comment complaining to that fact. I think it would improve the comment environment if HN had a title policy against using gender in it unless the article is clearly focused on it and has something new to contribute on the topic of gender. A lot of article titles would benefi…
Then dang and co will end up writing articles like this one: https://news.ycombinator.com/item?id=19971454
Re: A guide to pricing and hedging (2003) [pdf]
#36What's the benefit of these fancy financial instruments other than for someone who wants to enjoy a slower, higher stakes version of the roulette wheel at a casino (assuming the Boglehead wisdom that individual stock picking is about as reliable as that)?
Put options are useful if you want to bet against a stock with limited risk.
For example: Your tech startup was purchased by a large public company, and you end up with stock you cannot sell for, say, 3yrs.
You are not an insider and now just retired and have no insider info and you dont have restrictions on puts -- In this situation, you can hedge your downside. You can also do a zero-cost collar and hedge your downside funded by giving up your upside.
Re: A guide to pricing and hedging (2003) [pdf]
#37The title subtly but still obviously implies that finances and investing are men's business, and not women's. I don't see how anyone can deny that. I bet that many women reading this title that work in finance don't appreciate the title one bit. The argument that it's just a joke is not acceptable, because this together with other 1000 similar remarks, or "jokes" or micro-agressions will make women choosing that fiel…
But I agree with your underlying point. At best the title is careless and lends itself to misinterpretation.
(Worth noting, perhaps, that the linked paper was published in 2002. I wonder if the author would have thought twice in 2019?)
Re: A guide to pricing and hedging (2003) [pdf]
#38Earlier quoted context omitted.
Put options are useful if you want to bet against a stock with limited risk.
Put options are also useful if you are stuck with a large position you cannot unload right away, but would like to cap your downside. For example: Your tech startup was purchased by a large public company, and you end up with stock you cannot sell for, say, 3yrs. You are not an insider and now just retired and have no insider info and you dont have restrictions on puts -- In this situation, you can hedge your downsid…
Re: A guide to pricing and hedging (2003) [pdf]
#39Re: A guide to pricing and hedging (2003) [pdf]
#40What's the benefit of these fancy financial instruments other than for someone who wants to enjoy a slower, higher stakes version of the roulette wheel at a casino (assuming the Boglehead wisdom that individual stock picking is about as reliable as that)?
1) Derivatives allow you to tailor your risk to the precise component of the market that you have a view on. If you think the stock is going to have a large move (either up or down) in the short term, it's tough to express that view in the stock. If you buy stock, you lose money on a down move. If you sell short, you lose money on an up move. So, you can buy short-dated put and call options together (nicknamed a "straddle" if they have the same exercise price, and a "strangle" if the put exercise price is less than that of the call) and you capture not only your view on what the stock is going to do, but also the timeframe in which you expect that move to happen.
2) Options cost less than stock, so you can lever your position. Let's say a stock trades at 100 and you want to buy a hundred shares. Ignoring interest, that position costs you 10,000 dollars. If it rallies to 110, you make 1,000 dollars, or ten percent of your capital outlay. But if you buy a contract of 50-strike calls, you pay around 5,000. If the stock rallies to 110, you make 1,000 dollars again, but that is 20% of your capital outlay.
3) Derivatives have more factors involved in the valuation, which makes them complicated. This is a battleground where smart people who are willing to work hard can find inefficiencies and make money. Stocks have more people looking at them, and are more simple, so they may not offer the same opportunities for profit depending on your skillset.
4) Options serve a tax purpose. If you have a long stock position that you have held for six months and profited from, but the company has earnings and you don't want to risk losing money on a potentially bad quarter, you could sell your stock and pay short-term capital gains tax. Or, you could sell calls to buy puts and maintain your stock without having to pay tax on your stock gains yet. If the difference between long- and short-term capital gains tax is greater than the cost of the options you buy, then you could be saving money.
Amazing to me that the "why is the title gender normative" comment has gotten traction, but you've been downvoted. The internet is strange.