Newmont Mining(NEM) & Newmont Gold(NGC) Message Board

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Gold/Mining/Energy : Newmont Mining(NEM) & Newmont Gold(NGC)

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To: ahhaha who wrote (159)	5/14/1999 12:51:00 PM
From: ahhaha	Read Replies (1) of 587

Given the option premiums in this stock, there is absolutely no belief that the stock will rise 1/8 over the next 4 months. There is a service that takes the trading premium and subtracts the Black & Scholes pricing model theoretical premium to get a transient state premium difference. Then applies the Merton model to the puts for a similar computation. Finally computes the ratio of the transient state premiums. It is another form of put/call ratio on a short term basis and it was wickedly accurate, but like any mechanism, can't predict the future. It does accurately represent sentiment in comparison to the traditional put/call ratios which have failed to do a very good job for at least 10 years. I did this computation on NEM and unfortunately it is unclear what to do with negative B & S call premiums. I just assigned, by hand, the value of unboundedly bullish.

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