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To: rkral who wrote (64057)5/15/2003 11:10:15 AM
From: Stock Farmer  Read Replies (2) | Respond to of 77400
 
You and GV are both right.

GV is right: Black Scholes calculates TODAYs value of a stock option.

You are right: It does this by estimating the expected future difference between strike and market price at time of exercise and discounting this back to present.

The two should be equal, because the option should be worth today what its holder expects to attract in the future, discounted to present value.

John