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Insurance Model (Short Vol)

In this chapter, we learn about the insurance model.

If you sell insurance you win a lot of your trades, maybe 99%, and make a small amount.

If you buy insurance, you lose a lot but make a big win if you're right.

Some examples
  • Credit Default Swap
  • Short Volatility
  • Selling Options
  • Win-Loss percent vs, gain on wins and losses on loses
  • Inverse Moving average

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