Risk and Costs
Fees, capital lockup, resolution risk, behavioural traps and the limits of any measured edge.
Risk and Costs · 3 min readHow Fees Eat an EdgeA strategy with a three-cent edge and a four-cent round-trip cost is a losing strategy. Working through where every cost lands and what survives.
Risk and Costs · 3 min readCapital Lockup, the Cost Nobody Bills You ForMoney committed to an event contract earns nothing until settlement. On long-dated markets this cost dominates everything else and it appears on no statement.
Risk and Costs · 3 min readPosition Sizing When You Might Be WrongSizing determines survival more than selection does. The arithmetic of ruin, why fractional approaches exist, and why the book is the real constraint.
Risk and Costs · 3 min readThe Limits of Any Measured EdgeA measured price difference is a measurement. The distance between that and a return is made of costs, capacity, decay and the chance the measurement is wrong.
Risk and Costs · 3 min readResolution Risk, the One That Is Not in the PriceBeing right about the world and wrong about the contract is a real and recurring outcome. Where it comes from and which markets carry most of it.
Risk and Costs · 3 min readCounterparty and Platform RiskCustodial and on-chain venues fail in different ways. A plain comparison of what can go wrong with the place holding your money, rather than with your forecast.
Risk and Costs · 3 min readThe Behavioural Traps Specific to Event MarketsBinary payouts, visible probabilities and questions you have opinions about combine into a specific set of psychological failure modes.
Risk and Costs · 3 min readVariance, Drawdown, and What a Losing Run Feels LikeWith a small genuine edge, long losing stretches are normal and indistinguishable from having no edge at all. Planning for that in advance is the whole game.
Risk and Costs · 3 min readCorrelated Positions That Look DiversifiedTwenty positions on six underlying events is six bets. Spotting hidden correlation in an event market portfolio, where it hides in plain sight.
Risk and Costs · 3 min readWhen Not to TradeThe default action in a market with real costs is no action. A checklist of the conditions under which the correct response to an interesting number is nothing.