RE: RE: RE: RE: RE: The biggest problem with AAB>>Currentfair
market valuefor the aab.wt is 3 cents, AAB much better deal at this point.
Based on the Black-Sholes model probably, I've not run the parameters through it. But as Nic Taleb would suggest, B-S doesn't always work that well. It produces a value based on the difference between current price and strike price based on the underlying historical volatility and the amount of time left. If this was a technology stock lets say where all the value was in the potential of the IP, and it had been trading in the .35 to .50, I would put more credence in the B-S model. B-S fails to take into account the underlying book value here which already exceeds strike and is growing, quite rapidly in recent weeks I might add, all highly leveraged to the price of gold going forward - these parameters don't fit in the B-S model, thus my belief that the value number that B-S spits out, much as it did for CDS contracts - is whacked.