These days, the marketing materials for virtually every alternative investment vehicle lay claim to an option-like asymmetric pattern of returns, which marketers, at least, seem to regard as providing a sharp contrast with the return patterns that are generated by long-only investment techniques. In Chapter 11, I commented on the tendency to mistake the binary character of some trades’ return patterns for optionality, but in many cases, alleged optionality is often erroneously credited to the fund’s research efforts. There is much to say about optionality in this chapter, but these purported instances of optionality in which it is not in fact in play require demolition.
This form of alleged optionality is really nothing ...

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