moontower: a stoner dad explains options trading to his kids

Friends, In 2025, Taleb gave a lecture at the Ron Paul Institute whatever that is. Taleb wrote up his notes. The World in Which We Live | 12 min read You’re welcome to enjoy the 7 major points he discusses but I latched onto comment 2 under the heading: DYNAMICS AND MISUNDERSTANDING OF HISTORICAL PROCESSES. I’ll weave the quotes: The second point is our difficulty in grasping dynamics, particularly in geopolitics, because historians and statisticians view history differently.

Friends, I think about what Matthew Clifford said about technology when he was on Infinite Loops back in 2022 and before ChatGPT was a household name.

In this issue: investing orbits present tense Friends, I save my editorializing for the section at the end today. Let’s go straight to Money Angle. This week, I take the 12+ year-olds into the lab during market hours to buy their first portfolios for real. You can see the course recap and guide for prepping for the lab.

Friends, Next week I’m running a lab for the middle and high schoolers in the Investment Beginnings Course I teach locally. I will be working with each kid one-on-one during market hours as they buy their first portfolios. I’ve been communicating with the parents to make sure accounts are open, that they will be accessible by phone to help with 2FA login, and just general logistics.

Friends, A munchie for the finance heads…our latest episode of The Options Trench teaches you how to compute the levered ETF imbalances in your head, explains the math of imbalances, how to estimate the market impact, and whether you can make money from this or not and why.

In this issue: free lunches and non-tradeoffs VIX and buy signals delta-hedged risk reversals Friends, As one of my favorite HS teachers used to say, every silver lining has a cloud. (That this is one of my favorite teachers, you could probably predict my teenage affection level for rainbows and pop music). It seems I was destined to take to the idea of no free lunch easily.

Friends, If you are reading this from the safe little life you inhabit, you are already desensitized to the US-Iran ceasefire peak-a-boo. If you accuse me of callousness to compare violence to a children’s game I’ll blame it on out-of-sight, out-of-mind distance and the limits of attention. But callousness is often just that as opposed to intentional venom so guilty-as-charged. Throw your stones. There is (I think) minority view that the rhetorical whiplash has a profit motive.

Friends, A few quick hits on the topics of education and learning. Childhood and Education #18: Do The Math | 15 min read So this happened at UCSD: In the fall of 2020, 32 students took Math 2. In the fall of 2025, fully 1,000 students had math placement scores so low they would need it. Oh. Well, then. That’s 12% of students at UCSD. Who all failed math, then? Reviewing test results like these, you would expect transcripts full of Cs, Ds, or even failing grades.

As I mentioned on Wednesday, traveling mercifully forces me into quiet periods to read. In my normal routine, reading for pleasure can feel like an indulgence, but the combination of travel and my juvenile attachment to “summer vacation” is enough to put the guilt in remission. Of course, if you are of sound mind, you need no such permission, but just in case, here’s more than permission.

Friends, In the April post Get A Mortgage From The Option Market we dove into using a box spread to borrow at the rate baked into SPX options, no bank required. This week I had some cash to park and noticed a convo on twitter suggesting box spread rates should be extra wide over T-bills right now because the demand for leverage leaks into the derivatives funding. So I took a closer look and indeed decided to lend via options.