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Re: [sharechat] Options, NOG/NOGOB

From:	"David Iles" <davidi@wave.co.nz>
Date:	Thu, 10 Feb 2000 18:20:38 +1300

There are a few variables to options pricing but the main ones are time to expiry and Beta (or standard deviation = volatility).

In the case of NZOG Beta is the factor which is important. If a hole full of oil price up xxxx%. If a dry hole price down x?. Note, I'm expecting more upside than downside in price depending on result.

In the Black Scholes model beta needs to be known. I'm not sure what it is for NZOG however the Beta is an historical figure and probably has little relevance to the current situation.

In summary. The options will carry more upside than the head share (perhaps several hundred or thousand % however if a dry hole I would expect them to fall to say 3 or 4c.

Hope this helps.

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