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1/14
Excellent question!
"Risk/reward ratio" is a term used in investing, but it's rarely quantified like one would quantify a debt/assets ratio. Risk/reward ratio is usually used more intuitively.
2/14
Usually people will use all their knowledge to make guesstimates about an investment like:
- 20% chance to go bust
- 20% chance to break-even
- 40% chance to double
- 10% chance to 4x
- 10% chance to 10x
And then state "for me, this is good from a risk/reward standpoint".
3/14
That last statement will be different for each individual though. For some people the investment laid out above may be great from a risk/reward standpoint, because of the high expected ROI. For others, it may be terrible because of the 20% chance to go bust.
4/14
Investing is much more complex than just making money and maximizing returns, and investment strategies should differ from individual to individual. If this is news to you, I strongly suggest you read through the first section of this blog
5/14
The final section of the same blog post goes into depth on $TSLA call options, and how I go about evaluating them. There is even a subsection called "The Risk Reward of Call Options" that should answer a lot of your questions.
Excellent question!
"Risk/reward ratio" is a term used in investing, but it's rarely quantified like one would quantify a debt/assets ratio. Risk/reward ratio is usually used more intuitively.
@FrankPeelen I\u2019m curious what you think is a good risk/reward ratio and how do you generally calculate that to help inform your decision to buy options? Appreciate your insights!
— Dianne Francisco (@dfrancisco910) December 30, 2020
2/14
Usually people will use all their knowledge to make guesstimates about an investment like:
- 20% chance to go bust
- 20% chance to break-even
- 40% chance to double
- 10% chance to 4x
- 10% chance to 10x
And then state "for me, this is good from a risk/reward standpoint".
3/14
That last statement will be different for each individual though. For some people the investment laid out above may be great from a risk/reward standpoint, because of the high expected ROI. For others, it may be terrible because of the 20% chance to go bust.
4/14
Investing is much more complex than just making money and maximizing returns, and investment strategies should differ from individual to individual. If this is news to you, I strongly suggest you read through the first section of this blog
5/14
The final section of the same blog post goes into depth on $TSLA call options, and how I go about evaluating them. There is even a subsection called "The Risk Reward of Call Options" that should answer a lot of your questions.
Modellers believe that spreading out our limited supply of vaccine as single doses for 3 months will save up to 6000 lives. One concern though is whether single doses might lead to 'vaccine resistance' through virus mutation. (1)
If we assume that over the next 12 weeks 12-20 million people get one dose of a vaccine and are told or believe it gives 90% protection what % will actually go for a second jab? We might assume second dose coverage is at best 70%. (2)
That means between 4 and 6.7 million people might have fading protection. Will the risk of creating a vaccine resistant mutant in this group of people, which could spread rapidly to 7 billion people around the world, outweigh the benefits of 6000 deaths prevented. (3)
I was initially reassured by a paper sent to me by an eminent virologist. https://t.co/UyTQZ0CFsW (4)
Essentially vaccine resistance is rare compared with drug resistance, first because multiple mutations are needed unlike for drugs, and second because vaccines tend to keep pathogens from ever achieving large population sizes within hosts. (5)
If we assume that over the next 12 weeks 12-20 million people get one dose of a vaccine and are told or believe it gives 90% protection what % will actually go for a second jab? We might assume second dose coverage is at best 70%. (2)
That means between 4 and 6.7 million people might have fading protection. Will the risk of creating a vaccine resistant mutant in this group of people, which could spread rapidly to 7 billion people around the world, outweigh the benefits of 6000 deaths prevented. (3)
I was initially reassured by a paper sent to me by an eminent virologist. https://t.co/UyTQZ0CFsW (4)
Essentially vaccine resistance is rare compared with drug resistance, first because multiple mutations are needed unlike for drugs, and second because vaccines tend to keep pathogens from ever achieving large population sizes within hosts. (5)
1/ "Unbelievable: WHO warns of unreliability of PCR test" https://t.co/659Xk3WOBO
pcr-test/ 22.1.21 Auto translation quotes below
'Anyone who expressed doubts about whether the PCR test, co-developed in large part by Christian Drosten, can really provide evidence of infection..'
2/ ..'is virtually considered a heretic in Germany, or worse, a Corona denier. When Luthe, a non-party member of the Berlin parliament, saw doubts about the test's informative value in terms of the Infection Protection Act confirmed by a response from the Berlin Senate..'
3/ ..'in November 2020, I reported on it [https://t.co/RvCq02qib3]. The report was accompanied by a warning from Facebook that fact-checkers had found it to be false. In doing so, they proceed with argumentative shell games (as I described here)
4/ 'And now this! All the self-proclaimed "fact-finders" have to dress warmly. In a new "information note" [https://t.co/mMKpFQarXr], the World Health Organisation (WHO) announced something remarkable on Wednesday. I ask for your understanding if I now reproduce all the..'
5/ ..'technical terms in the original - but for the sake of accuracy it has to be. I'll try to explain them afterwards: "WHO diagnostic test guidelines for SARS-CoV-2 state that careful interpretation of weak positive results is required. The cycle threshold (Ct) required..'
pcr-test/ 22.1.21 Auto translation quotes below
'Anyone who expressed doubts about whether the PCR test, co-developed in large part by Christian Drosten, can really provide evidence of infection..'
2/ ..'is virtually considered a heretic in Germany, or worse, a Corona denier. When Luthe, a non-party member of the Berlin parliament, saw doubts about the test's informative value in terms of the Infection Protection Act confirmed by a response from the Berlin Senate..'
3/ ..'in November 2020, I reported on it [https://t.co/RvCq02qib3]. The report was accompanied by a warning from Facebook that fact-checkers had found it to be false. In doing so, they proceed with argumentative shell games (as I described here)
4/ 'And now this! All the self-proclaimed "fact-finders" have to dress warmly. In a new "information note" [https://t.co/mMKpFQarXr], the World Health Organisation (WHO) announced something remarkable on Wednesday. I ask for your understanding if I now reproduce all the..'
5/ ..'technical terms in the original - but for the sake of accuracy it has to be. I'll try to explain them afterwards: "WHO diagnostic test guidelines for SARS-CoV-2 state that careful interpretation of weak positive results is required. The cycle threshold (Ct) required..'
1/ Learn more about the @USPS, its leadership and Louis DeJoy in Bill's conversation with Lisa Graves about how Charles Koch marked the Postal Service for privatization in the early 1970s and how he is using the Koch empire to push his political agenda to this day.
2/ She pointed to a recent report she authored for @PubInterest about Koch's efforts to popularize the fringe idea of privatizing the Postal Service and to capture the agency.
3/ When regulatory capture occurs, a special interest is prioritized over the general interests of the public. In 2006, one of his pro-privatization allies "James Miller was rewarded with a post on the Board of Governors for the Postal Service."
4/ "And from that perch in 2006, he pushed through this bill called the Postal Accountability and Efficiency Act, the PAEA, which really has dramatically harmed our Postal Service."
5/ Some people might say that they were trying to assure the failure of the Postal Service with the bill, which loaded it with burdens for the future that are not asked of any other government agency.
Pressure is mounting on President Biden to enact leadership changes at the U.S. Postal Service, including one Democratic lawmaker who's calling on Biden to fire the postmaster general and the entire board of governors. https://t.co/3cwqGOMvQH
— NPR Politics (@nprpolitics) January 29, 2021
2/ She pointed to a recent report she authored for @PubInterest about Koch's efforts to popularize the fringe idea of privatizing the Postal Service and to capture the agency.
3/ When regulatory capture occurs, a special interest is prioritized over the general interests of the public. In 2006, one of his pro-privatization allies "James Miller was rewarded with a post on the Board of Governors for the Postal Service."
4/ "And from that perch in 2006, he pushed through this bill called the Postal Accountability and Efficiency Act, the PAEA, which really has dramatically harmed our Postal Service."
5/ Some people might say that they were trying to assure the failure of the Postal Service with the bill, which loaded it with burdens for the future that are not asked of any other government agency.
Now what about scattered variables? Some of them look very old and thus kind of put our basic ideas of continuity and large-group classifications in question.
Let’s take a look at a couple of them and shiver at their
(1) The 2SG subject marker on the verb.
GREEN: -d
YELLOW -t (possibly a development from -d)
ReRED: -ḍ / -ṭ
There is no regular phonetic correspondence of -d to -ḍ.
(2) In most varieties *β became (or remained?) /b/ in pre-consonantal position (GREEN). In a number of varieties, this didn’t happen (RED).
(3) The Imperative M:PL suffix is -at in western Morocco AND in Awjila (Libya) (RED). It is -ət / -ăt elsewhere (GREEN). The yellow part has different suffixes.
(4) The pharyngealized (“emphatic”) non-geminated alveolar is [dˁ] (or [ðˁ]) in most of Amazigh (GREEN), but in a scattered number of varieties, it is [tˁ] (RED).
Let’s take a look at a couple of them and shiver at their
Amazigh (Berber) languages are quite close to each other and in most places nearby varieties are mutually intelligible. They function like a discontinuous dialect continuum.
— Maarten Kossmann (@ait_kisou) January 12, 2021
A loooong thread with maps (and no memes\u2639\ufe0f).
(1) The 2SG subject marker on the verb.
GREEN: -d
YELLOW -t (possibly a development from -d)
ReRED: -ḍ / -ṭ
There is no regular phonetic correspondence of -d to -ḍ.
(2) In most varieties *β became (or remained?) /b/ in pre-consonantal position (GREEN). In a number of varieties, this didn’t happen (RED).
(3) The Imperative M:PL suffix is -at in western Morocco AND in Awjila (Libya) (RED). It is -ət / -ăt elsewhere (GREEN). The yellow part has different suffixes.
(4) The pharyngealized (“emphatic”) non-geminated alveolar is [dˁ] (or [ðˁ]) in most of Amazigh (GREEN), but in a scattered number of varieties, it is [tˁ] (RED).