The Lie Your Stock's Price is Telling You | Kris Abdelmessih on Why Options Hold the Truth скачать в хорошем качестве

The Lie Your Stock's Price is Telling You | Kris Abdelmessih on Why Options Hold the Truth

What can bar bets, coin flips, and the length of your subway commute teach us about options pricing? In this episode of Excess Returns, Matt Ziegler is joined once again by Kris Abdelmessih to break down complex options theory into intuitive, real-world analogies. From prediction markets to probability distributions, Kris helps us understand how the options market reveals what the stock market often hides—how investors are pricing not just if something happens, but how much it matters when it does. This is options math with a twist, taught like you’re five, but ready for Wall Street. 📈 Whether you're an investor trying to size a high-risk, high-reward position, or simply curious about how the market “thinks” about uncertainty, this episode is full of mental models you’ll want to revisit. 📌 Topics Covered: Coin flips vs. futures: the two dominant styles of betting Over/under bets and what they teach us about prediction markets Why odds ≠ probabilities—and how to convert between them The difference between probability and magnitude in financial outcomes Bar bets and beer-drinking contests on Wall Street (!?) Using call spreads to isolate probabilities, not potential profits A visual breakdown of skewed vs. symmetric return distributions Why two stocks can have the same price but completely different implications How the options market understood the dot-com bust better than most investors Why thinking in bets makes you a better investor and allocator ⏱️ Timestamps: 00:00 – The stock market vs. the options market 01:42 – Over/under bets and their connection to options 05:59 – Understanding prediction markets and odds 10:00 – Future-style bets: Magnitude vs. probability 14:35 – The subway commute example and tail risk 19:00 – Why volatility and skew matter in pricing 20:38 – Stock A vs. Stock B: Same price, different outcomes 24:00 – Visualizing probability distributions 28:00 – How call values reflect both vol and probability 32:00 – Truncating the tail: turning options into “bar bets” 35:00 – Using call spreads to extract implied probabilities 37:00 – What investors can learn from this framework 39:00 – Options markets during the dot-com bubble 40:45 – Where to follow Kris online 🎙️ Guest: Kris Abdelmessih 🧠 Follow Kris’s work: https://moontower.substack.com