Roger's 1997 Short Picks Message Board

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Strategies & Market Trends : Roger's 1997 Short Picks

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To: Roger A. Babb who wrote (6952)	11/13/1997 5:36:00 PM
From: Bearded One	Read Replies (1) of 9285

One thing I forgot to mention. If you take a 5 year option at with a strike price of 104 for $11 and you put a volatility of it of, say, 40%, which is less than AOL's current volatility, then you can work the numbers backwards and get an implied current stock price of 53 dollars! Up the volatility to 60% and you get an implied price of about 38 dollars.

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