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Strategies & Market Trends : Options 201: Beyond Obi-Wan-Kenobe -- Ignore unavailable to you. Want to Upgrade?

To: Dominick who wrote (743)2/22/2003 11:45:58 PM
From: tyc:>  Read Replies (1) | Respond to of 1064
 
I do hope someone will comment on the validity of my method.

Re Fair Value;
If I were to write a straddle at todays option prices, the range of profit would extend much much further than the distance between the upper and lower bb's, for the bb's indicate 22 % annual volatility whereas the options imply a 60% annual volatility. To my mind, fair value for option prices implies a short-straddle profit range equal to the width of the bollinger bands.


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