The earliest option trade on record in Western literature was a bet on future crop by Thales of Miletus, which Aristotle recounted with great pride in his Politics. To benefit from a better than expected olive crop, Thales put a deposit on every olive press in the vicinity of Miletus. As demand for these grew, he sublet the facilities for profit, mostly to make the point that philosophers who so desire can achieve material success. The dichotomy between "MIT-smart" and the "Brooklyn-smart", today prevalent on Wall street, was already apparent in fifth-century Asia Minor. Thales used the first derivative instrument, actually an option on a future, a second-order derivative at that! He did not trade olives, which he would have to sell short, but chose to buy the equivalent of a call on the olive presses, for fall delivery, with the knowledge that all he could lose was his deposit.
-- Nassim Nicholas Taleb,
Dynamic Hedging.
no subject
Date: 2007-12-26 02:16 pm (UTC)no subject
Date: 2007-12-26 02:20 pm (UTC)no subject
Date: 2007-12-26 04:06 pm (UTC)no subject
Date: 2007-12-26 07:18 pm (UTC)no subject
Date: 2007-12-26 07:23 pm (UTC)