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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers -- Ignore unavailable to you. Want to Upgrade?

To: E. Charters who wrote (38331)	4/16/2007 10:53:53 AM
From: LLCF	Read Replies (1) \| Respond to of 78408

<Still, I think that most people miss the fact that the way options are valued is based on time, and volatility history.. this is betting statistically on the chances of gain.. a point the brass instrument calculators miss.. > Most people miss it, but not the calculator wonks... the number one discussion in every options trading room is all about where the model can go wrong and IS wrong. That's the whole point... if you understand the model and modern finance you don't make the dumb mistakes or relying on the model OR intuition... and therefore you don't get the really silly things wrong like the wrong ratio! <and any security in the instrument is simply a different kind of time loss by interest degradation, but you must temper it with time value, as the great degrader of time chews steadily away at the warrant..> Exactly... time value is what the model is all about. :) <<You are right to beat the drum about leverage as everybody buying is betting long under a certain time constraint... >> Et tu Brute??? Et tu? DAK

To: E. Charters who wrote (38331)	4/16/2007 1:18:14 PM
From: koan	Read Replies (1) \| Respond to of 78408

Exactly EC: economics is a social science as well as a hard science. Another aspect of wts many people miss is that the wt is controlling X amount of stock X at X price. When the sliver wheaton 5 year B wts came out the stock was 7/8/9 dollars? and the wts were one buck. Strike was $10. This meant you could control one share of silver wheaton for one buck for 5 years----that is a lot of control for a buck! Especially n a bulll market. So $1,000 allowed you to control roughly $7,000/$8,000/$9.000 dollars worth of stock for 5 years. The CKG wt buyers priced those wts more correctly, for whatever reason.