But if MLN keeps going up at anything like the rate its been going for the last couple of years, they are cheap, cheap, cheap. They are a straight gamble on where the MLN sp is going to go. They are either worth nothing, something or a lot. There is no way to price them.
...They are either worth nothing, something or a lot. There is no way to price them.
and it is called the Black-Scholes model.
Merton & Scholes got a Nobel prize cos the model is so good at pricing this stuff and LTCM had not 'happened' then.
and it is called the Black-Scholes model.
Merton & Scholes got a Nobel prize cos the model is so good at pricing this stuff and LTCM had not 'happened' then.
Well, that's very true. I used an online Black-Scholes calculator to work out the price, assuming 15% annual volatility and it came out at 23.74 cents. So the market not far off, but I only guessed the volatility. Seems a bit unfair Merton and Scholes got the Nobel, what about poor old Black?
Well, that's very true. I used an online Black-Scholes calculator to work out the price, assuming 15% annual volatility and it came out at 23.74 cents. So the market not far off, but I only guessed the volatility. Seems a bit unfair Merton and Scholes got the Nobel, what about poor old Black?
But the SP is 20% premium to NAV, what happens if you use NAV in your calculations?
Why MLNWE has buyers much above its intrinsic value as per todays NAV as well SP ...its got much to do with people taking a call on markets after 12 months ...they expect to have roaring markets in 2022 ...its the cheapest way to play that call ...24 cents ...means getting a MLN share at 1.42 in May 2022 so seems worthwhile to many and doesn't involve too much funding too ...sell MLN and buy 6 MLNWE is the get rich quick play ...
But the SP is 20% premium to NAV, what happens if you use NAV in your calculations?
I took one look at this and slunk back into my dog kennel thinking some things are too hard https://corporatefinanceinstitute.co...-merton-model/
Happy to stick with my super accurate Beagle nose that seldom fails to give a wrong answer which says go and hunt for a feed elsewhere unless these are around 12 cents per dog bisket.
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
MLNWE at 29.5 cents. Heads at 1.60. exercise price is 1.28. Dividend was around 2 cents, so that gives a theoretical price of 34 cents so a small bit to be made by arbitrage. Invests in US equities.
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