How does this change when you take into account the fees per transaction that you have to make on a stock exchange? Surely this is like a drag or resistance function of friction? A net loss from the system keeps occurring?
@grace23869 Says:
"what did Simons get right that Newton got wrong" well he didn't invest in slavery for one
@mathmachine4266 Says:
V = Σ e^((r+λ)t)*(C1(λ)*S^((-2r+σ²+√(4r²-4(r+2λ)σ²+σ⁴))/(2σ²)) + C2(λ)*S^((-2r+σ²-√(4r²-4(r+2λ)σ²+σ⁴))/(2σ²)))
Where the sum Σ is performed over all values of lambda. Each value of C1(λ) and C2(λ) is determined by the boundary conditions, which have infinite degrees of freedom, hence why there are infinitely many values C1 and C2. It is possible for C1 and C2 to be 0 for all λ except for a countable set of λs, in which case that set of λs would be considered the eigenvalues of this problem, and the sum would be performed over those eigenvalues. Or, alternatively, C1 and C2 could be infinitessimally small for all values of λ, in which case we say each C1 and C2 is proportional to dλ, and we compute this via an integral.
In the special case that 4r²-4(r+2λ)σ²+σ⁴=0 (which happens when λ=(2r-σ²)²/(8σ²)), we'd instead have e^((r+λ)t)*S^((-2r+σ²)/(2σ²))*(C1(λ) + C2(λ)*ln(S)).
Thank you PDE class for teaching me how to do this.
@katendejulius2262 Says:
Thank You that was so educative.
@TheRuancarlo Says:
All that money crated and production of goods hasn't doubled as the market did
@StormyCalm Says:
The Efficient Market Theory has been proven wrong enough times. Traders do not act mindlessly. Traders are not random. They may at times become irrational, but they're not random. And the efficient market theory requires that price and value are always the same. They're not.
@jimparsons6803 Says:
Did not know that Newton dabbled. Still, he did if not great, he did alright.
@saaofficial5415 Says:
Fun fact: There are only 3 whole numbers in that goddamn equation, 6 if you count the exponents.
@bulllettofficial6132 Says:
I bet with everyone using these formulas just making it so much more random 😅
@fyuni-tek9422 Says:
i wonder who created the market & laid down the rules..
@dante224real1 Says:
that equation is just A + B + C = D
you literally have four variables.
@ElvisRandomVideos Says:
Excellent topic
@Darenwrld Says:
Unbelievable video. I will rewatch. Amazing
@halilozmen5526 Says:
Thales of Miletus was definitely not a greek. He was ionian, and ionians were not greek! This is one of the distortions done by some historians.
@atomop2550 Says:
RIP JIM SIMONS
MAY YOU REST IN PEACE
@Audisknfj Says:
I know a lot of financial engineering studies get flak for not contributing to society on a broader way, but I do know that a lot of studies in electrical engineering, especially signal processing (which continues on to computer vision also), has benefitted tremendously from studies of random processes. That’s why I believe that it is also important to find connections between different areas of knowledge as well as discovering them
@dragoda Says:
Rip Jim Simons:(
@coyote16161 Says:
With all due respect to the Credit Default Swap, OTC Derivatives and others, to call it an INDUSTRY? It is anything but an industry. It is a gambling like any other gambling in Las Vegas. Just the players and the dealers have to wear ties. These are the peoples that crash the markets during 2008. An they paid absolutely nothing. (And I'm not talking about Mr. Simons).
@SammyBR99 Says:
RIP Prof. Jim Simons 😢
@user-tj4fu3cb1e Says:
Jim Simons died 2 days ago.. RIP.
@santipierinirees3994 Says:
Whatre the people who came up with this question referencing??
@andydeng8218 Says:
Crazy that this video explained options better than my finance professor
@NymuswalkerHD Says:
As interesting as the mathematics are, it needs to be said that Newtons gambling on slave trades is absolutely disgusting and another absolutely devious inside on capitalism and bourse gambling
@tj-nu7iu Says:
1:39 “Isaac Newton invested in a company that shipped enslaved Africans across the Atlantic” … Ohhh noooo!!!
@sriramsundar8388 Says:
RIP Prof. Jim Simons 💔
@muhammadlone4320 Says:
Subtitle
@4453kevin1 Says:
R.I.P. Jim Simons 😢
@Nekuzir Says:
the history of philosophy podcast guy, peter adamson pronounced it Thay Lees of My Leetus
@suhaniverma6583 Says:
Amazing video on earth, thanks lot we def need part 2
@neutron417 Says:
RIP Jim Simons, lost one of the most profound mathematics and best finance figures in history.
@ST-nu6ib Says:
Unfortunately, Prof. Jim Simons passed away today (May 10, 2024). As a graduate student in math department of Stony Brook University, I came to know this earlier. He's genius of a person. Rest in peace, rest in knowledge. I always wanted to meet him but the nature has other plans. Om Shanti.
@ten_cents Says:
tfw i'm on a simons binge only to find out he just died wth
@keywestalert6329 Says:
As long as you currently get paid enough to live your life plus savings, and will receive increases equating to inflation, you need not invest into such risky ventures.
@danspector740 Says:
RIP Jim Simons
@ghanaquantumguy Says:
1:00 Just heard about Jim Simons' passing today (10th May 2024). I recalled watching his contribution to hedge funding from this channel about two months ago. I came here to appreciate his contribution once more. RIP Legend!
@honor9lite1337 Says:
Oi
@radmehrabedini9667 Says:
great job
@GinamosWithCherryOnTop Says:
I am a financial management teacher in the philippines and a long time fan.. this was my lesson last week.. i was too late to discover this video today dang.. well I am gonna brake the lesson plan.
@RM12828 Says:
Wait, so if tomorrow we discover the "ideal" model to calculate derivatives and risk.
The entire Derivatives market will crumble?
Yeah, no one is going to "discover" it, and even if they did, they wont survive long enough to publish it.
😂😂
@Lucas_Wind Says:
If Veritasium was a stock, I'd buy and HODL for life.
@JT-px2ev Says:
Then the great taking by David Rodger’s Webb
@tf2fan919 Says:
Funnily enough the South Sea Company was not in fact booming and was actually a play by the british government to rid itself of its crippling debt. They are still paying the debt caused by this fiasco today last I checked.
@GunslingerAlGilead Says:
Great explanation, thanks! I did masters in a credible business school and hold CFA Charter, still it’s so refreshing to watch such videos
@corners1733 Says:
ok
@imakevidsable Says:
The equation provides the best price for what? What the option price should be? If so then why would others bet differently?
@ExpatZ266 Says:
That equation is a scam when applied to financials, notice how it causes massive bubbles then market collapses when implemented? If you haven't noticed that you haven't been paying attention.
@numbersix8919 Says:
In the USSR, this would all just be criminal behavior.
@Owwee_immaB Says:
This all sounds really familiar. Am I the only one
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