The 780 Trillion dollar (US) non-linear market is completely mispriced by the academic world and allows for near riskless arbitrage profits by the super rich. The writers of options (short position) have a license to print money. Over the last 25 years plus, less than 10 % of options expire in the money (ITM) and this small portion has a negative yield (payoff is The 780 Trillion dollar (US) non-linear market is completely mispriced by the academic world and allows for near riskless arbitrage profits by the super rich. The writers of options (short position) have a license to print money. Over the last 25 years plus, less than 10 % of options expire in the money (ITM) and this small portion has a negative yield (payoff is The CBOE has threatened academics given data on options prior to 1996 with law suits if they share the data with other academics. They stopped giving data on options in 1996.

I teach corporate and international finance at the univerisity level and I am a Waterloo engineer.

This 780 trillion dollar ponzy scheme dwarfs the Madoff ponzy scheme.

Also the two largest cash flow industries in the world are illegal arms and illegal drugs. This money has an inflationary effect when it is laundered back into the financial system (Enron anyone?) as it is no different than printing money.

David G. Gowing
dgg