Munger on Black-Scholes

"Black-Scholes is a know-nothing system. If you know nothing about value - only price - then Black-Scholes is a pretty good guess at what a 90-day option might be worth. But the minute you get into longer periods of time, it's crazy to get into Black-Scholes. For example, at Costco we issued stock options with strike prices of $30 and $60, and Black-Scholes valued the $60 ones higher. This is insane." - Charlie Munger
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Munger on Black-Scholes
Munger on Black-Scholes
Reviewed by jembe
Published :
Rating : 4.5