Gold and Silver Juniors, Mid-tiers and Producers Message Board

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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers

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To: koan who wrote (38246)	4/16/2007 6:48:47 AM
From: E. Charters	Read Replies (2) of 78409

Koan: The warrant/stock must go up to make any money. You can keep your money if the stock goes nowhere. The warrant degrades, while the stock only loses interest. IF is the operative word.. Still, I think that most people miss the fact that the way options are valued is based on time, and volatility history.. this is betting statistically on the chances of gain.. a point the brass instrument calculators miss.. LTCM lost all because the bet wrong about outcomes of cornering markets.. its all looking into the future, no matter what you buy or how you buy it .. the price of a stock or option is based on what people will pay for it.. they are all betting on the future.. so the should put in a human factor or group hysteria analysis to really price things right.. The flux of the VI is the stat history of momentum. This is what puts the price on an option. It is the finite chance that if it fluxed x up and down on the average, the its chance of gain is increased by a percentage of X given Y time to live. There are myriad stock calculators who take advantage of that flux fact, including Shannon's 1955 information theory, now fractal calculator.. In fact stat history wave interp is what makes modems work and coding get thru noise in psuedo random signals for GPS and weak fibre signals.. You are right to beat the drum about leverage as everybody buying is betting long under a certain time constraint... and any security in the instrument is simply a different kind of time loss by interest degradation, but you must temper it with time value, as the great degrader of time chews steadily away at the warrant.. In this way it is wise to use BS as a guide.. while remembering it is market sentiment that is the best factor to guide whether or not to speculate at all.. EC<:-}

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