Warrants and the corresponding stock tended to move together: if the stock price increased, then so did the warrant price; if the stock fell, so did the warrant. So one could be used to offset the risk of the other. If, for example, warrants seemed overpriced relative to the corresponding stock, one could sell them short (in other words, borrow and sell them), hedging the risk of stock-price increases by buying some of the stock. Trading of this sort, conducted by Kassouf in parallel with his Ph.D. research, enabled him "to more than double $100,000 in just four years" (Thorp and Kassouf 1967, p.

Donald MacKenzie, An Engine, Not a Camera, loc. 545