The Puzzles of Bitcoin Options for Ordinary Investors
The landscape of Bitcoin investing is littered with peculiarities. One of the oddest is the bizarre trade in options on Bitcoin equities.
Psychological Investor, Page 2
More from the Psychological Investor library…
How to Lose Money with a Bitcoin Investment, Part 2: The Unhedged Short
As I described in an earlier article, many investors holding Bitcoins naturally look for ways to put those Bitcoins to work, and several worthwhile opportunities are available. But there’s also a whole class of investments which carry quite a potential sting in their tail.
How to Lose Money with a Bitcoin Investment, Part 1: The Easy Money Mantra
Many investors holding Bitcoins naturally look for ways to put their money to work via investments that can generate capital growth, income, or both. Several worthwhile opportunities are available in the Bitcoin space, but one commonly mentioned trading method needs a crystal ball to work well.
Avoiding an Apple Overreaction
Investors who wrote the Apple puts I suggested in April can either lock in their gains now or await further gains at August expiry. The catch? Waiting for further gains introduces extra risk from the possibility of a market overreaction following earnings next week.
On the Right Side of Irrational
You’ve initiated a long position in part because you believe other investors are undervaluing an asset. In short order, the situation flip-flops, and you now believe other investors are overvaluing the same asset. To what extent does your follow-up action depend on your time horizon?
Winklevoss Bitcoin Trust May Become THE Price Discovery Mechanism for Bitcoin
Seemingly overlooked in the hoopla about the Winkelvoss twins filing to create a Bitcoin ETF is a simple fact: if approved, the trust may rapidly supplant Mt. Gox and other exchanges as the principal price discovery mechanism for the cryptocurrency.
Is it Irrational to Employ the Capital Asset Pricing Model?
Nobel prizes notwithstanding, the transition from theoretical to real world markets makes the CAPM a little less obviously rational as an investment tool.