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Craft Brew Alliance, Inc. Message Board

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  • jad1148 jad1148 Jan 16, 2011 6:05 AM Flag

    No is talking about CBA's New Options

    Biffy, if I've done my Black Scholes, BS, calculations correctly, the 19Aug2011 options with a strike price of $7.50 have traded at HUGE premiums to the BS values. The CALL has a 423% markup (last trade = $1.15, BS value = $0.22) and the PUT has a 155% markup (last trade = $1.25, BS value = $0.49). When that happens, writers/sellers win and holders/buyers lose. Makes sense, right?

    Do Option Sellers Have a Trading Edge?
    http://optiongenius.com/blog/data-shows-that-75-or-more-of-options-expire-worthless/


    And with regard to your comment:
    "the only thing this stock will do is go up, so why worry...."

    LOL!
    Famous last words!
    And where does the price go when the bull finally rolls over and dies?

 
BREW
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