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A guide to pricing and hedging (2003) [pdf]

ieor.columbia.edu

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Re: A guide to pricing and hedging (2003) [pdf]

#41

Post by dtwest »

vfc1 wrote: post #33

The 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…

The women in finance I know have much thicker skin than you think. They also put up with bullshit that is not on the same scale as this benign title.

Complaining about the little things can hurt the bigger cause if you piss people off in the process.

Re: A guide to pricing and hedging (2003) [pdf]

#42

Post by CarolineW »

vfc1 wrote: post #33

The 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…

I agree with you entirely, although my comment making pretty much the same point is seeing wild swings in the voting:

https://news.ycombinator.com/item?id=19980584

Re: A guide to pricing and hedging (2003) [pdf]

#43

Post by paulgb »

totalZero wrote: post #27
CarolineW wrote: post #2

I 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…

Who cares? Stop trying to police everyone else's diction. "Men (and boys) may scoff" because this kind of criticism is totally irrelevant to the actual ideas being discussed. I know from experience that just about any person (man or woman) who has done a trading job professionally has had to put up with way worse in the time required to learn how to make money. And in "today's world," a lot of us don't care about the…

> just about any person (man or woman) who has done a trading job professionally has had to put up with way worse in the time required to learn how to make money.

Whether or not this is the case, it shouldn't be, and little things like this title subtly reinforce a culture where it is ok.

Re: A guide to pricing and hedging (2003) [pdf]

#44

Post by vfc1 »

eli wrote: post #37
vfc1 wrote: post #33

The 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…

I think it's intended to be a reference to "The boy's guide to usefulness" and similar 19th century books for boys. 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?)

I doubt the author would use the title today, but still, if we don't call this kind of stuff out for what it is, it just keeps happening.

Re: A guide to pricing and hedging (2003) [pdf]

#45

Post by rpiguy »

dmos62 wrote: post #5
CarolineW wrote: post #2

I 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…

Is "the boy" a patriarchic stand-in for the word "child", or what? It seems like some kind of in-group slang. Reminds me of the British expression "old boy", meaning "man".

I am so glad several other commenters here have pointed out that boy's guides were fairly common and this is a cute reference to that genre of book. There were girl's guides too. It is not the least bit offensive nor meant to cause offense.

Re: A guide to pricing and hedging (2003) [pdf]

#46

Post by yoyonz »

Bostonian wrote: post #25
zdw wrote: post #11

What'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.

Limited risk in that for the short there is potential for an unlimited loss (-infinity), while for the put option the maximum loss is the premium (-100%).

But the option strategy is much riskier as a loss of -100% is significantly more likely under the put option than the short due to implied leverage, time value decay, etc.

Re: A guide to pricing and hedging (2003) [pdf]

#47

Post by dtwest »

zdw wrote: post #11

What'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)?

Some of these "fancy financial instruments" are not as fancy as you think. For instance, futures and options are a form of insurance. My great grandmother was a farmer and would trade derivatives to insure her crops for the season. Some trader in Chicago can trade this speculatively, but a midwestern farmer has a real world use for the product.

Re: A guide to pricing and hedging (2003) [pdf]

#48

Post by vfc1 »

dtwest wrote: post #41
vfc1 wrote: post #33

The 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…

The women in finance I know have much thicker skin than you think. They also put up with bullshit that is not on the same scale as this benign title. Complaining about the little things can hurt the bigger cause if you piss people off in the process.

It's about the impact of 1000 little things.

Re: A guide to pricing and hedging (2003) [pdf]

#50

Post by intuitionist »

zdw wrote: post #11

What'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)?

Derivatives give you finer control over the financial risks to which you’re exposed. So for instance, if you’re McDonald’s and you’re planning on introducing the Chicken McNugget, you’re exposed to chicken price risk: the price of a McNugget meal is sticky, so if chicken prices go up a lot you could lose a lot of money. One thing you can do is buy chicken futures to lock in the price; if chicken futures aren’t available you can approximate them with grain and soy futures, since the price risk of a chicken is mostly the price risk of its feed. Another example is if you’re a US-based company but do a lot of business in the Eurozone; you’re exposed to currency risk that you can hedge away with a swap.

It’s true that if you’re a small individual investor you don’t have much use for derivatives; you probably don’t have idiosyncratic risks in your portfolio you need to hedge away. But businesses and big institutional investors do.

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