RIO 0.24% $119.58 rio tinto limited

re: rio puts ... buffalo cruncher ... cjs Hi Cjs ... since we...

  1. 5,822 Posts.
    re: rio puts ... buffalo cruncher ... cjs Hi Cjs ... since we have been discussing projections I have uploaded a better template for you to play with ... suggest the first thing you do is to put a copy in a safe place.

    Fill in the chosen Option Inputs (call/put,stock price,strike price,expiry date,today's date,i/vol) into the Yellow cells ... click on the green cell to view the formula but don't ever type in the green cell. (put a notional 20.0% into the I/Vol cell to get you started)

    This will get you an Option value ... now check the actual price of the Option and adjust the I/Vol until your Option value equals the actual Option price ... you now have what is called FAIR VALUE.

    Now, in the adjacent cells you can create any scenario of stock price or time that you like ... you could also copy/paste down the sheet if you wanted to compare different Options ... you are only limited by your imagination.

    Cheers ... have fun.


    This is only my view ... read the red stuff.





 
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