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Gold/Mining/Energy : Precious and Base Metal Investing -- Ignore unavailable to you. Want to Upgrade?

To: Andrew who wrote (21699)	10/4/2003 1:56:32 PM
From: Canuck Dave	Respond to of 39344

Volatility is the variance of "at the money" options. It's (max-min)/(average). This ratio is used to calculate the values of other options in the future using a continuous Gaussian probability (normal) function and a random walk model. Most of the time, it works extremely well. Only 4 problems. Financial risks aren't "normally" distributed, markets aren't random or continuous all the time, and too many leveraged players are trying to play the "risk free hedge" game. Just my opinion. CD