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Matt Levine

If You Like Torque You’ll Love Volatility

Also Deutsche Bank, killer whales, Tesla, interdealer brokers and not Tilray.

High torque.

High torque.

Photographer: NurPhoto

Where are the customers’ powerful sports cars?

There is an obvious value to proving surprising and counterintuitive hypotheses in finance, but the most enjoyable empirical research confirms what everyone assumed to be true without bothering to check. It proves the most obvious and intuitive theories, the hypotheses that were probably concocted after a few beers, the ones that are so outrageously on-the-nose that you know the researchers were sheepish about mentioning them. Here is “Sensation Seeking and Hedge Funds,” by Stephen Brown, Yan Lu, Sugata Ray and Melvyn Teo, forthcoming in the Journal of Finance: