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Politics : Ask Michael Burke

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To: accountclosed who wrote (34732)	10/29/1998 9:46:00 AM
From: HB	Read Replies (1) of 132070

Here's some fluff entertainment re Black-Scholes and why Mike's options strategies work.... you see, Black-Scholes assumes a "log normal" distribution for the future price of a stock... I think that means, roughly, that the percent change in stock price is assumed to be normally distributed. However, actually stock price percent change distributions seem, based on the analysis of past data, to have what are called "long tails."* Mike is in the business of chasing the long tails. After all, he's a leggy guy. *When a sample shows up from the long tail on the left-hand side of the distribution of stock price changes, it is often termed a "BK".

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