Well guys, I increased my net worth from $950k to $3950k in the last three weeks thanks to spy puts and I think I'm going to sit things out for now.
I was at $4340k last night, but fomod into puts more and more, then panic sold it all and bought some calls as I considered Trump specifically naming hydroxychloroquine.
Looking at the paper, it seems quite clear it could work.
But then I wasn't confident and sold my calls at a loss, too. Even though the market had gone up, IV had fallen so I lost money on those.
Gonna study a textbook about options while I sit this out. Maybe if I learn more about what can be done with them, I can think of something to do better than yoloing into random spy puts if I later decide I do have better information than the market. For example, if I think hcq is a real cure but the market is still panicking... Maybe buying calls at high IV is still bad, but there may be something else I can do if I understand them better.
Anyway, people think the hcq study wasn't peer reviewed, but the reason we were able to profit buying puts is because we understood what was happening before the wider consensus opinion arrived at it.
If you wait till a bunch of normie scientists decide it's legit and tell the world before you act, then it actually will be priced in.
I think the best thing to do is one's own research to find out if it really is legit. For how insane their results are, I think the small sample size argument seems quite weak. Like blindly following a "rule" that is usually good but doesn't always apply.
If anyone knows 2-3 different, independent statisticians who could estimate the probability that this study is correct, you could probably use that to determine if buying calls or puts is EV+, plus the Kelly criterion to tell you how much of your wealth you should bet on it.
Anyone got any ideas for how to do this besides emailing like ten random statistics professors and offering them money to review the study ASAP?
