Quote:
Originally Posted by Malachii
So if Toothsayer doesn't make any trades, our bets are all pushes, right? Asking for a friend.
TS is compelled to trade this year by the sunk cost effect (or, in poker terms, because he's 'committed to the pot').
He has a chance to win $6500 ($5K from the trade + Brian's $1K bet + his own $500 back) while risking the $1000 in the trading account (his initial $500 bet is sunk) and just needs to find a trading strategy where the probability of increasing the bankroll by 6 times is at least 1/7.5 (~13.33%) - it doesn't even have to be a normally profitable strategy per se.