Today, on this segment of "The Skinny On Options Math" Tom Sosnoff, Tony Battista and our math genius Jacob Perlman explain the world of cycles and statistical models and the role of large parameter spaces.
What is a cycle? A cycle is anything that repeats regularly over time. Technical analysts often look to find cycles in market data, looking at prices, volatility or other derived statistics. Jacob introduces the concept of Fourier analysis which is a method of judging cycles. The discussion makes clear the important difference between cycles and cyclicality.
The efficient market hypothesis provides obstacles to using cycles and other models. How can we know if a model, such as Black-Scholes, is good? Jacob explains what makes a good model, the problem with "quant" models and other models that attempt to predict the future.
Watch this episode of "The Skinny On Options Math" for an informative lesson on cycles and statistical models which reinforces our belief that the Tastytrade way is best.