#2,275 in Business & money books
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Reddit mentions of Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street
Sentiment score: 1
Reddit mentions: 2
We found 2 Reddit mentions of Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street. Here are the top ones.
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Specs:
| Release date | June 2010 |
>How many trades per day or week do you do typically now?
About 3-4 per week. Most trades I open are in the 45-75 DTE range and I close at least half of them prior to expiry, usually around the 20-30 DTE range.
>Which brokerage do you primarily use for options?
Interactive Brokers. I'd strongly consider moving to TastyWorks but I've had a few family members throw some "play money" my way and the IB friends and family account makes it easy to keep all the money separate. It does hurt every time I close a trade and have to pay commission again :(
>On index options, do you mostly go for AM-settled monthlies? I've had a lot of liquidity issues with any other expirations.
Mostly, yes. If I see good liquidity on a weekly, I might go for that.
>I hadn't heard about the Kelly Criterion, thanks for the pointer.
I recommend Fortune's Formula if it interests you. I don't really use it to select my "bet" size - it's just a guideline that informs me how good the risk/reward is for a particular trade. In the example I posted elsewhere of the custom software I use, you'll see the Kelly column. If a spread has a really high Kelly (like over 40%) and is actually liquid, it likely has a pretty good risk/reward ratio.
>edit: Do you also trade futures or futures options?
No, I'm very much a "learn one thing really well and do it really well" kind of guy. A lot of folks here speak highly of futures options so it's something I will definitely learn about in the future, but for now I still feel like I have a lot to learn about what I'm already trading.
No matter what the bot's bet size, if the bot has less money than the casino, then the bot is more likely to go bankrupt. The real risk is a whale with more money than the casino.
Even with an edge, the casino has some risk of ruin, but less as its bankroll gets larger, and less as its edge gets bigger. The practical result that applies to all casinos is that large casinos can get away with offering better odds than small casinos.
There's a whole book about this, which is surprisingly interesting: Fortune's Formula by William Poundstone.