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• Option Valuation Model by Steve Barr

  ARTICLE SYNOPSIS ...Option Valuation Model by Steve Barr Radix Research Limited 1652 Mount Batten Pl. Victoria, B.C., Canada V8S 5J9 (604)592-5308. Product: Stock options evaluation program. Price: $250 Canadian. Equipment: IBM PC/XT/AT Have you ever bought a cheap out-of-the-money call, say for 10 cents and watched it tank, slowly, so slowly, until it was worth nothing? Sure, the initial logic (you did use logic didn't you?) said that 10 cents for the contract was ""all"" you could lose. But that turned out to be the entire capital invested: 100% down the drain. Was that contract so cheap? I started play...

AUTHOR: Steve BarrDATE: NOV 1988