Microvision (MVIS) Message Board

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Microcap & Penny Stocks : Microvision (MVIS)

MVIS 0.940

+3.3%

Dec 19 9:30 AM EST

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To: mark calder who wrote (1200)	6/18/1998 6:23:00 PM
From: Casey W	Read Replies (1) of 7720

The Black-Scholes formula is a bit of a nasty - I will post it this weekend. Till then Steve 5048 had the following informative posting on the MVIS Yahoo board - Thank you Steve. Using Black-Scholes option valuation delivers a value of $4.75 based on the stock closing at $10.1. The model uses actual historical volatility of 70.89%. The warrants closed at $4.1 implying an implied volatility of about 60% for the stock. Anytime you can by an option priced to an implied volatility less than actual of the underlying stock you a cheap option. The reason the warrants trade is related to liquidity issues. The less the liquidity the less able the market can squeeze out this inefficiency Kassouf's formula assumes there is a very long time span to the warrant. As the expiration date gets closer it's predictability gets worse and Black-Schole would provide more accurate results over any time span. However, without an option calculator Kassouf"s formula will give a reasonable proxy valuation for at least the next six months.

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