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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: Charles Tutt who wrote (72185)	8/17/2002 3:02:00 PM
From: jonkai	Read Replies (1) \| Respond to of 74651

In other words, it's not that simple. no its not that simple, that is why Black and Scholes each got Nobel prizes for the formula.... lets put it another way, the formula works so well that people can and do trade on the formula every day...... and it has proven to be extremely accurate in pricing options... otherwise there would be an advantage to either side of the trade.... if that were the case, you would have people richer than Bill Gates running around...... because flaws in any system are always exploited..... the important volatility is the stock volatility..... past volatility if wrong, corrects itself.... and MSFT has a chance to change the prices every single quarter... now that the FASB is going to make it mandatory for every single quarter, every company will recalculate every quarter... these things are not monthly contracts they are multi year.... the corrections are easily figured in with each passing quarter..... to get a very accurate picture of how much these options are costing.... jon.