Valuing Options

post by Tristan H (Kythe) · 2022-07-15T17:08:15.434Z · ? · GW · 0 comments

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On Tuesday July 19th I'll be running a meetup on valuing life options! The trading world has lots of ideas about how to correctly value options that also apply to optionality in everyday life. I'll introduce various ideas about how to think about options and then we'll discuss various places in life where they might apply.

Here's some of the ideas I plan to cover:

• Options have value: Even if something doesn't currently seem like something you'd want, the option on it still has non-zero value. Life has option value all over if you know where to look.
• Option value depends on volatility: When you can not take on option if it doesn't end up being a good deal, it can make sense to go for things you have high uncertainty about the value of. Whereas if you're offering the option volatility makes it more risky. Applications to hobbies, dating, kids, jobs, etc.
• A basket of options is worth more than an option on the basket
• Options are good for hedging risk: Lining up committed backups reduces downside risk. Hedging the risk from real life options with financial market options.

=== WHEN+WHERE ===

7:00pm Tuesday, July 19th

New location in NoHo (Join the mailing list at https://groups.google.com/g/overcomingbiasnyc and say you came from LessWrong to access the post with the address)

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