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Strategies & Market Trends : The Covered Calls for Dummies Thread
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To: Dominick who wrote (3163)12/19/2001 2:05:49 PM
From: Uncle Frank  Read Replies (2) of 5205
 
>> F.E. NTAP current price 25 with an IV of 88%. 25 * .87 = 21.75. 21.75 + 25 = 46.75. This is the high of the range. 25 -21.75 = 3.25. This is the low of the range. So, there is a 68% chance of the stock till expiration being within a range of $46.75 to $3.25.

That would mean there is a 32% (almost 1 in 3) chance that ntap will be >$46.75 or <$3.25 by expiration. I don't find that premise to have any merit, Dominick, and wonder if you're not misinterpreting or misapplying IV.

duf
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