https://astralcodexten.substack.com/p/book-review-antifragile

Nassim Taleb summarizes the thesis of Antifragile as:

Everything gains or loses from volatility. Fragility is what loses from volatility and uncertainty [and antifragility is what gains from it]. The glass on the table is short volatility.

The glass is fragile: the less you disrupt it, the better it does. A rock is "robust" - neither fragile nor antifragile - it will do about equally well whether you disrupt it or not. What about antifragile? Taleb's first (and cutest) example is the Hydra, which grows more and more heads the more a hero tries to harm it. What else is like this?

Buying options is antifragile. Suppose oil is currently worth $10, and you pay $1 for an option to buy it at $10 next year. If there's a small amount of variance (oil can go up or down 20%), it's kind of a wash. Worst-case scenario, oil goes down 20% to $8, you don't buy it, and you've lost $1 buying the option. Best-case scenario, oil goes up 20% to $12, you exercise your option to buy for $10, you sell it for $12, and you've made a $1 profit - $2 from selling the oil, minus $1 from buying the option. Overall you expect to break even. But if there's large uncertainty - the price of oil can go up or down 1000% - then it's a great deal. Worst-case scenario, oil goes down to negative $90 and you don't buy it, so you still just lost $1. Best case scenario, oil goes up to $110, you exercise your option to buy for $10, and you make $99 ($100 profit minus $1 for the option). So the oil option is antifragile - the more the price varies, the better it will do. The more chaotic things get, the more uncertain and unpredictable the world is, the more oil options start looking like a good deal.