Jamie Loftus

And of course, every trade SBF ever made at Jane was the subject of a risk-reward calculation.

All of it boiled down to expected value.

The formula is fairly simple.

If the amount won multiplied by the probability of winning a bet is greater than the amount lost multiplied by the probability of losing a bet, then you go for it, irrespective of units.

Utils, euros, dollars were all subject to the same reckoning.

But at Jane, SBF asked most another trading principle.

He learned to be risk-neutral.

In simple terms, a trader, given a choice between a $50 and a 50% chance at $100, must be agnostic if they want to maximize the expected value of earnings over a lifetime.

Those who prefer the sure win are risk-averse, and those who would rather gamble are risk-lovers.

But both risk-lovers and the risk-averse are suckers equally because over the long run, they lose out to the risk-neutral who take both deals without prejudice.

That makes no sense.

That makes no sense at all, because you're assuming you have to choose between one?

Can you just take both?

Is that the offer?

Because it seems like the whole thought experiment is about choosing between one.

None of this makes very much sense.

Let me write the equation out, Jamie, and try to try to sketch out the math on.

Yeah, that seems real.

Jamie, I got to continue this.

What the fuck did that sentence say?