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The Skinny on Quantitative Finance

The Efficient Market Hypothesis

The Skinny on Quantitative Finance

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

The Efficient Market Hypothesis states that, to some extent, available information is reflected in current prices. While the Efficient Market Hypothesis is impossible to verify and remains a debated theory, empirical evidence supports it to some extent. The tastytrade mechanics assume a semi-strong/strong form of the Efficient Market Hypothesis and base trades around current pricing information instead of pricing forecasts. Today Tom, Tony, and Julia discuss the Efficient Market Hypothesis and whether it is a good foundation for retail traders.

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