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Biotech / Medical : Biotech Valuation -- Ignore unavailable to you. Want to Upgrade?

To: tom r. phillips who wrote (10528)	2/20/2004 11:13:35 AM
From: scaram(o)uche	Respond to of 52153

geeeeeeeeeeeeeze this is a good thread. (eom)

To: tom r. phillips who wrote (10528)	2/20/2004 12:35:10 PM
From: Biomaven	Respond to of 52153

"actual stock prices distributions have fatter tails". yes, which is why option buyers do better than option sellers over the long term But the actual option prices take these fatter tails into account. So I'm not at all sure about option buyers vs option sellers - all I do know is that the market makers do well with their huge spreads, which means that all-in-all both option buyers and option sellers lose money. SEPR implied volatilities are wildly different depending on how far out you go - they drop sharply after March. There's a neat program I use call Open Interest - it costs $250 but there's a 30-day free trial: rpsw.com It can plot the volatility smile automatically for you and does a lot of other neat stuff - gets free (delayed) options chains from the CBOE site. Peter