Re: Kerviel's Martingale


"Nick" <nospam@xxxxxxxx> wrote in message
news:47ab29e5$0$21093$da0feed9@xxxxxxxxxxxxxxxxx
DVH wrote:
The Times reports that Jerôme Kerviel used a Martingale with the
intention of recouping his losses by betting more on each successive
occasion.

But a Martingale isn't a guaranteed winner unless you have infinite
money. The wager needed to recoup losses rises in a hockey stick curve as
the betting continues. And if you have infinite money, you don't really
need to bet in the first place.


You have to be a bit careful in finance Martingale has two meanings. The
one you mention where you double the stake on each loss but it also
follows the mathematical definition of a fair bet where the average
winnings (losses) are flat. It is possible that someone became confused
between the two meanings.

OK, thanks for that. Point me in the direction of some info about fair bets,
please...


.

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