Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Mattyice who wrote (39336)	9/18/2010 3:23:25 PM
From: Mattyice	Read Replies (1) \| Respond to of 78764

GFRE - Say if you buy even at current retail price and dont float out a really low bid. Call or Put (cp) Call S (asset) 6.9 K (strike) 20 v (volatility 0.91 r (Interest Rate) 0.0019 T (time in years) 1.25 q (Dividend Yield) 0 Value of Option 0.841862706 ------- Option Value (optval) 0.85 Call or Put (cp) Call Asset Price Today (S) 6.9 Strike Price (K) 20 Risk-Free Rate (r) 0.0019 Number of Time Periods in Years (T) 1.25 Dividend Yield (q) 0 Initial Guess of Volatility (guess) 0.45 Implied Volatility 0.91304655 Say 6 months it is worth - $15 even (and volatility which is really marked up declines). Call or Put (cp) Call S (asset) 15 K (strike) 20 v (volatility 0.75 r (Interest Rate) 0.0019 T (time in years) 0.75 q (Dividend Yield) 0 Value of Option 2.374090772 % Change ln(2.37409772/.84186207) = 179% vs. owning stock = 130% I did this pretty quick so some assumptions could be wrong, but maybe if this stock moves lower or you could float out a bid lower than current ask and get a better/lower premium, and also i imagine that this stock if it does finally move will move pretty quick and thus know telling what effect and the multiple action it can have on the option price, but as it moves closer to the money it might become more liquid also possibly raising the value.