The Skinny On Options Math - August 25, 2021 - The Gambler's Fallacy

published 1 month ago by tastytrade, Inc.

If a coin comes up heads several times in a row, it is easy to think that it is “due” for a tails - an error known as the gambler’s fallacy. The law of large numbers, that the average of many random outcomes approaches the mean, can appear to give justification to this assumption. Today, Jacob joins Tom and Tony to help resist this mistake by looking at what the law of large numbers actually says.

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