Beta is one of things that helps understand volatility. Delta is the main volatility index when you’re looking at option pricing. A high Beta and/or Delta doesn’t always mean that the stock will outperform, just that it moves more than the market does (beta) and it moves up and down against its own price (delta).
one of those brokers in the sell group of 2 is Morgan Stanley who are very conservative as a general rule. They also have a bull case of $9/share if everything holds up and that’s certainly a fair bit higher than Mac Bank’s $7+ estimates. Most of my PLS shares have been Hypothecated to Morgan Stanley so as to allow for structured positions to be set up. In effect, my beneficial interest is maintained but MS have probably used those shares for shorting and I receive a discount to margin for options.
I honestly don’t know how people arrive at such specific prices on PLS, the volatility is huge and the people that do move the prices around have such conflicting positions themselves. Depending on which trading desk you chat to the target prices vary wildly and that’s part of high delta, lots of volatility. The target prices are also way out of sync with the rest of the market and that’s the Beta at play. Things really blow out again with gammas, thetas etc.. I think the only easy thing to work PLS against is the lithium price and that’s as predictable as herding cats.. business is strong and dividends look great so that’s the best bit, the pricing is just batshit crazy but lots of fun to play around with and sometimes quite profitable too.
sorry if that’s over simplified, always a bit hard to know what other people know on an internet forum where don’t actually know each other.
PLS Price at posting:
$5.01 Sentiment: Buy Disclosure: Held
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