Ann: Share Purchase Plan Offer Letter - Dispatche, page-20

re: Ann: Share Purchase Plan Offer Letter - D... Ive run this through an option calculator and expect 2-3cents.. the variable Ive had to estimate was volatility.

Option Price where volatility was 30% was 2.2 cents, at 60% it was 3 cents flat.

The RBA rates drop many are expecting next month will affect the price as well, (being the r variable below).

And as we know the volatility of PEK has been very large on an annual basis...


Here are the variables that will affect the price:


S = stock price
X = strike price
t = time remaining until expiration, expressed as a percent of a year
r = current continuously compounded risk-free interest rate
v = annual volatility of stock price (the standard deviation of the short-term returns over one year). See below for how to estimate volatility.