Every fair price in this course came from a pricing model with five inputs, and one of them is a guess. This lesson shows what each input does, how to read the market's guess, and where the model breaks down.
After this lesson you can
- Name the five inputs and what each one does to a price
- Explain what volatility measures, and implied volatility
- Read delta and the model's odds without overtrusting them
- Name the assumptions real stocks break
- Use the model in practice, including early exercise and dividends, and avoid the five mistakes
Chapters
- 0:00Five inputs, one guess
- 1:25What each input does
- 2:47What volatility means
- 3:58Implied volatility
- 5:11Delta, from the model
- 6:11The model's odds
- 7:07Where the model breaks
- 8:20Using it in practice
- 9:21Early exercise and dividends
- 10:18Five mistakes
- 11:14The whole lesson on one screen