Petre Posted June 29, 2024 Posted June 29, 2024 Is there a 'back of the napkin' formula that estimates what a future share price will be using the premiums for calls and puts, with the expiration date being the future date? Thank you. Quote
Petre Posted June 29, 2024 Author Posted June 29, 2024 OOps. estimated future price, per the market makers, using the premiums for calls and puts, with the expiration date being the future date? Quote
Jasper Posted June 30, 2024 Posted June 30, 2024 For European options I understand it to be, Stock price = strike price + call price - put price - interest cost of carrying strike price until expiry + dividends expected to be received between now and option expiry. It's slightly different for American options because they can be exercised at any time. Quote
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