From 147442d3602dd1fc2c99f6c1ec49de6bfe347cca Mon Sep 17 00:00:00 2001 From: Max Niederman Date: Fri, 17 Jan 2025 14:47:15 -0800 Subject: [PATCH] trades: add note on Kelly bet for biden term trade --- src/content/trades/biden-finishes-term.mdx | 5 ++++- 1 file changed, 4 insertions(+), 1 deletion(-) diff --git a/src/content/trades/biden-finishes-term.mdx b/src/content/trades/biden-finishes-term.mdx index c393c328..6a09391c 100644 --- a/src/content/trades/biden-finishes-term.mdx +++ b/src/content/trades/biden-finishes-term.mdx @@ -31,9 +31,12 @@ I purchased 20 shares at an average price of 91.6¢, for a total of $18.28 befor I think my entry was fine although I probably could have stood to spend some more time and effort on my bet sizing. This was an extremely good price which I mostly didn't take advantage of, -and in the future I should at least spend some time estimating what the [Kelly bet](https://en.wikipedia.org/wiki/Kelly_criterion) would be. +and in the future I should at least spend some time estimating what the [Kelly bet](https://en.wikipedia.org/wiki/Kelly_criterion) would be.[^kelly_bet] On the other hand, I don't want to go overboard and end up essentially just gambling. +[^kelly_bet]: In this case, the 99% forecast earlier results in a Kelly bet of just under 89% of the available bankroll. +I would of course not be this confident given my surprise at the price in the first place. + My exit was similarly not great. I set a sell limit order for half my shares at 98¢, but on reflection I realize that there was no principled reason for this: