Add training workflow, datasets, and runbook

training_data/curated/text/a42b2e695df90a68f7270068bd3c24482715a3cad92e3edda59f62e62af31626.txt

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+278  •   The Intelligent Option Investor
+Given what you know about the BSM, does this seem like the kind of 
+situation conducive to accurate option pricing? This example certainly does 
+not sound like the pricing scenario of a short-term agricultural commodity, 
+after all. If this hypothetical drug company’s stock price was sitting at $50 per 
+share, what is the value of the upper range the option market might be 
+pricing in? Let’s assume that this stock is trading with a forward volatility of 
+100 percent per year (on the day I am writing this, there are only four stocks 
+with options trading at a price that implies a forward volatility of greater than 
+100 percent). What price range does this 100 percent per year volatility imply, 
+and can we design an option structure that would allow us to profit from a big 
+move in either direction? Here is a diagram of this situation:
+5/18/2012
+-
+500
+50
+100
+150
+200
+250
+300
+350
+400
+450
+5/20/2013 249 499
+Date/Day Count
+Advanced Biotechnology Co. (ABC)
+Stock Price
+749 999
+GREEN
+GREEN
+Indeed, even boosting volatility assumptions to a very high level, 
+it seems that we can still afford to gain exposure to both the upside and 
+downside of this stock at a very reasonable price. Y ou can see from the pre-
+ceding diagram that both regions of exposure on the put side and the call 
+side are outside the BSM cone, meaning that they will be relatively cheap. 
+The options market is trying to boost the price of the options enough so 
+that the calls and puts are fairly priced, but for various reasons (including 
+behavioral biases), most of the time it fails miserably.