puzzling probability and roulette a la Mark Brown

[MikeSuesserott@xxxxxxxxxxx (MikeSuesserott)]

Gene,

there is a measure which allows you to bet on reversion of amplitude over
time; it is called "volatility". Frequently used by option traders.

In fact, the mean reversion tendency of volatility is what makes many
spreading strategies feasible in the first place.

Best regards,

Michael Suesserott


-----Ursprüngliche Nachricht-----
Von: Gene Pope [mailto:gene@xxxxxxxxxxxxx]
Gesendet: Monday, December 03, 2001 04:34
An: omega-list@xxxxxxxxxx
Betreff: Re: puzzling probability and roulette a la Mark Brown


We know that flipping a coin will create a "tendency" over time to revert to
a mean.

We know that the stock market can "overshoot" more than flipping a coin
before the same reversion over the same time.

My question is... what is the "factor", probability or otherwise, that
allows one to "bet" on this reversion over time and how is it measured?

Please correct me if wrong, but is this not what Mark's system is about? Not
the odds of the "next" flip, but the tendency of the flips, once skewed to
one side, to revert?

Best regards,

Gene Pope