Getting familiar with crypto and DeFi, I stumbled up https://www.dharma.io/ they had free Polygon (MATIC - Ethereum layer 2 solution) transfers and no fees to buy USDC.  They even had a sign-up bonus that was $100 in ETH. I was able to buy USDC from my bank account without any fees and was ready to explore DeFi.  But this last week, they was announced that they were acquired by https://opensea.io/ .  The largest NFT marketplace.  However, they have decided to shutdown the Dharma wallet App and give people 30 days to transfer their crypto out. I'm happy for the team, but sad to lose a no fee way to buy USDC on the Polygon (MATIC) network that is suppose to be super fast with little transaction fees. Transferring out crypto on Polygon (MATIC) network was no problem, but I had less $100 ETH.  And with ETH gas fees being high, it might be even higher than the ETH value itself.  Luckily, I remember reading that Gemini has free crypto withdraws, up to 10 per m...

So you bought into the narrative that crypto / bitcoin / ethereum is the internet of money and the future of finance. But now what can you do with it? You can definitely trade, sell and transfer it, but here are the financial uses of crypto: Lending, Staking, Market Making and Yield Farming Lending One of the first things you can do with crypto currency is lend and borrow it. Most major CeFi (Centralized Finance) institutions will provide have lending and borrow rates that can range froma few percent APY to close to 15% APY (BlockFi, Celsius etc). With lending being more standardized, there have been many DeFi (Decentralized Finance) options - software protocols - enabling lending providing higher rates as it is completely systematized process cutting out the middleman and human labor. However, with no institution providing the service it is up to the users to make sure the assets are safe and the code doesn't have malicious intent or bugs that could put the assets at risk. On...

Selling put options is a very popular stock option strategy.  It is analogous to selling insurance, by collecting a premium to give the option (policy) holder the ability to sell stock a specific price obligating the seller to buy it at that price. 2 Popular reasons to sell put Willing to buy stock at a lower price than currently Neutral to bullish opinion and premium attractive enough premium to risk against capital In the first scenario, if the price goes lower and expires in-the-money, the investor gets to buy at the strike price AND collect the premium.  In the second scenario,  if the trader is correct will collect the premium and even if slightly wrong can still come out ahead if the premium is large enough.  Eg.  SPY is trading 470 and sold an at-the-money put (470) for $7, but at expiry the stock closes at 465.  In this scenario, the trader was wrong, but still makes (470-465+7) $2 if he immediately closes the SPY position on expiration. How much Op...

 Portfolio allocation strategy has gone back as far as 1200 BC in writings of Talmud and has continue to evolved in the 1900s.  Below are 4 major strategies where the arrows show influence. Talmud Strategy "Let every man divide his money into three parts, and invest a third in land, a third in business and a third let him keep by him in reserve." - Talmud (as early as 1200 BC) (Stocks, REITs, Bonds)    Modern Portfolio Theory Harry Markowitz developed the mean variance portfolio that incorporated expected return, expected standard deviation and expected correlation.  These lead to the creation of the popular 60/40 portfolio of stocks and bonds where risk averse investors can construct portfolios that maximize return while minimizing risk. Permanent Portfolio Harry Browne developed a strategy to have financial safety, no matter what the future brings.  He then invested based on 4 possible parts of the economic cycle: Prosperity -> stocks Deflation -> l...

  The Stock Market (S&P 500) has returned on average 1.4% per month and the Volatility ETF (VXX) has returned -4.6% per month.  This data goes back to 2009. Where the returns have a -0.76 correlation. Monthly Returns SPY VXX count 154 154 mean 1.4% -4.6% std 4.1% 19.3% min -12.5% -35.2% 25% -0.6% -15.6% 50% 1.9% -8.6% 75% 3.7% 2.3% max 12.7% 102.8% The Monthly Return Distributions SPY and VXX Monthly Returns - unpackinvesting.com Takeaways SPY and VXX are strongly negatively correlated with -0.76 since VXX inception The monthly magnitude of returns is about -3x times with almost 5x times the volatility. With the strong negative correlation and greater volatility VXX can make a great hedging vehicle for SPY or shorting VXX can be utilized as a more capital efficient exposure tool (leverage). Further interesting research can include testing if VIX levels have any forecasting ability in SPY and VXX in returns or volatility

Here are different quantifiable attributes that measure risk: stock borrow / lending rate, historical volatility, implied volatility and margin. #1 Stock Borrow / Lending Rate  This is the rate at which it costs to borrow securities (if you want to sell them short) and the corresponding rate to lend securities to someone that wants to borrow them.  For example, this is quoted on Interactive Brokers "SLB Rates", SPY has a Fee rate of 0.25% and a Rebate rate of -0.25%.  While BITO has a Fee rate of 0.91% and a Rebate rate of -0.91%.  This means that it will cost less to borrow SPY than BITO and also that if you lend BITO you will make more money than lending SPY.  Generally, if things cost more to borrow, they have more risk associated with them. #2 Historical (or Realized) Volatility This number is calculated from historical prices.  It is basically the standard deviation of prices over a given time window and then normalized into an annualized number so tha...

The world's 5 largest retirement funds ranked by assets are Japan ($1.7 Trillion),  Norway ($1.3 Trillion), South Korea ($765 Billion), U.S. Federal Retirement Thrift ($650 Billion), and ABP of Netherlands ($600 Billion).  With such a large size, all these funds have a large portion in public equities (stocks) ranging from 42% to almost 73%.  Their bond allocations range from 25% to 50% with the remaining in alternatives including real estate from 2.5% to 14%. Ranked By Total Assets Fund Country Total Assets (millions) Government Pension Investment Japan $1,719,987 Government Pension Fund Norway $1,305,920 National Pension South Korea $765,446 Federal Retirement Thrift U.S. $651,124 ABP Netherlands $607,367 complete list https://www.pionline.com/interactive/worlds-largest-retirement-funds-2021  #1 Government Pension Investment, GPIF, Japan - $1.7T Details can be found here: https://www.gpif.go.jp/en/ Allocation Details can be found here: https://www.gpif.go.jp/en/per...