Published in The Capital·May 1Homo Economicus and the Rational Expectations TheoryBehind almost every economic model that tries to predict markets is hiding a human with rational behavior. — In this article, we will examine the predicaments that help most economic models explain market movement and behavior. I tend to think that the basis of all matters in life is philosophy. If we think that something is rational, or irrational, moral or immoral, etc. then our framework and thus…Homo Economicus4 min read
Published in DataDrivenInvestor·May 1The History of Quantitative Finance.This article will open a new category in my blog, quantitative trading. This article will set the stage before any other article that will dig deeper into the subject. Brownian Motion Robert Brown (1773–1858) observed something that would change our view of the world forever. He observed pollen grains and their movement…Quant4 min read
Published in DataDrivenInvestor·May 1Introduction to Artificial Intelligence.The starting point of modern information technology has as a starting point the year 1945 and the machine that defeated the Enigma code, the ENIAC, and the English mathematician and cryptanalyst, Alan Turing. “The original question, can machines think?” ― Alan Turing Deep Blue and Chess Forty years of development, starting from ENIAC, led…AI8 min read
Published in DataDrivenInvestor·Apr 1Introduction to Fixed Income Assets: BondsLet us start our investing and trading journey by talking about the most basic vehicle, bonds. In this article, we are going to examine what bonds are and how they are been used in the securities markets. What are Bonds? Bonds are categorized as fixed-income debt securities. The reason is that when we…Bonds7 min read
Apr 1Gold ETF suggestions for investors and traders.Gold ETFs are another ETF category that we are going to examine in this article. Here are some of the most popular gold ETFs. 01. SPDR Gold Trust Symbol: GLD Closing Price: $166.33 Annual Expense Ratio: 0.40% Overall Rating on ETF.com: A Issuer: State Street Global Advisors This ETF takes its value directly from…Gold1 min read
Published in The Capital·Apr 1An Introductory Course to Central BankingAt the center of our modern financial system, there is the country’s central bank. This article will be an introductory course on central banking. If we want to understand how the central bank works, we need first to understand what money is. This article will build upon the “What Really…Central Bank15 min read
Published in DataDrivenInvestor·Mar 1The Kelly Criterion and Position Sizing.Extending my “Basic Money and Risk Management for Traders”, in this article we will take a look at another money management tactic, the Kelly criterion. History When Alexander Graham Bell, the inventor of the telephone, started the Bell laboratory he never knew that this legendary facility will bring so many inventions…Money Management2 min read
Published in The Capital·Mar 1Income Trading with Options Strategies: Short Straddle and Short Iron ButterflyThis article is going to expand on the “Income Trading with Options Strategies: Strangle and Iron Condor” article. — 1. Short Straddle Similar to the “Short Strangle” mentioned in the previous article of the series, the straddle includes the selling of a put and a call contract on the same asset, with the same expiration date, and the same position size, but at this time, both contracts are exactly at-the-money strike price.Income3 min read
Published in DataDrivenInvestor·Mar 1Your One-Stop Guide on Value Investing.If you aspire to be a long-term investor your best bet is to dive into value investing. Assumingly, you have read my article “The Father of Value Investing and his Best Disciple: The Story of Benjamin Graham and Warren Buffet”. …Values18 min read
Published in DataDrivenInvestor·Feb 1Income Trading with Options Strategies: Short Strangle and Short Iron CondorContinuing our income trading strategies with options, this month we are going to take a look at the short Strangle and Iron Condor strategies. If you missed the previous part, you can find it here “Income Trading with Options Strategies: the Vertical Spreads” 1. Short Strangle In environments with low volatility, it is…Options4 min read
