Price of XOM Stocks one year from now based on option pricing...

Mar 09, 2007 4 Replies

According to my model below, which bases future price movements of a stock based on today's an option's TRUE COST, it's volume, the weighted price of XOM should be:



$72.54267884 on/around January 2008.Today, the price is $71.32.


CALL OPTIONS Expire at close Fri, Jan 18, 2008 XOM= 71.32 Strike Symbol Last Chg Bid Ask Vol Open Int True Cost of Options Market Cap of Options Weighted Price Contribution



35 WXOAG.X 37.3 0 36.5 36.8 19 5,023 -1 18.62 0.312483518
40 WXOAH.X 31.4 0 31.8 32.1 55 3,240 0 4.4 0.084390209
45 WXOAI.X 26.8 0 27.2 27.3 1 2,675 0 0.48 0.01035698
50 WXOAJ.X 23.8 0 22.6 22.8 1 5,047 -2 2.48 0.059456738
55 WXOAK.X 18.5 Up 0.50 18.2 18.4 1 8,289 -2 2.18 0.05749083
60 WXOAL.X 14.4 Down 0.60 14.1 14.3 22 7,352 -3 67.76 1.949413824
65 WXOAM.X 11 Down 0.40 10.4 10.6 59 13,206 -5 276.12 8.605787442
68 WXOAU.X 9.7 0 8.8 8.9 11 1,467 -6 64.68 2.093404617
70 WXOAN.X 7.5 Down 0.30 7.2 7.4 11 36,975 -6 67.98 2.281700271
73 WXOAX.X 6.1 Down 0.40 5.9 6.1 144 5,370 -6 878.4 30.53582988
75 WXOAO.X 4.8 Down 0.30 4.8 4.9 4 32,661 -5 19.2 0.690465345
80 WXOAP.X 3 Down 0.10 2.9 3 52 53,700 -3 156 5.984032989
85 WXOAQ.X 1.85 Up 0.05 1.65 1.75 73 13,399 -2 135.05 5.504183549
90 WXOAR.X 0.9 Down 0.10 0.9 1 103 4,285 -1 92.7 4.000383592
95 WXOAS.X 0.5 Down 0.05 0.45 0.55 599 4,240 -1 299.5 13.64268418 2085.55 75.81206396


PUT OPTIONS Expire at close Fri, Jan 18, 2008 Strike Symbol Last Chg Bid Ask Vol Open Int True Cost Market Cap of Costs Weighted Price Contributions



35 WXOMG.X 0.05 0 N/A 0.05 5 4,893 -0.05 0.25 0.002489331
40 WXOMH.X 0.05 0 0.05 0.2 1 8,925 -0.05 0.05 0.00056899
45 WXOMI.X 0.35 0 0.15 0.2 717 7,088 -0.35 250.95 3.212731152
50 WXOMJ.X 0.35 0 0.35 0.4 530 27,146 -0.35 185.5 2.638691323
55 WXOMK.X 0.75 Down 0.05 0.75 0.85 4 31,231 -0.75 3 0.046941679
60 WXOML.X 1.45 Down 0.05 1.45 1.5 28 22,063 -1.45 40.6 0.693029872
65 WXOMM.X 2.45 0 2.55 2.7 1 35,287 -2.45 2.45 0.045305832
68 WXOMU.X 3 0 3.3 3.5 11 8,656 -3 33 0.63371266
70 WXOMN.X 4 Down 0.30 4.2 4.5 55 45,782 -4 220 4.381223329
73 WXOMX.X 5.3 Down 0.01 5.3 5.6 156 8,644 -4 642.72 13.25667141
75 WXOMO.X 6.5 Down 0.10 6.7 6.9 750 21,677 -3 2115 45.12802276
80 WXOMP.X 9.8 Down 0.20 9.9 10.1 3 8,954 -1 3.36 0.076472262
85 WXOMQ.X 13 0 13.8 14 7 2,015 1 -4.76 -0.115106686
90 WXOMR.X 19.2 0 18.6 18.8 22 19 -1 11.44 0.292916074
95 WXOMS.X 24.2 0 23.6 23.8 22 2 -1 11.44 0.309189189 3515 70.60285917 72.54267884

This just tells people that you don't understand how to work with numbers.

ynotssor wrote on 3/9/07 3:43 PM:

Are you saying that YOU don't carry numbers out to 8(EIGHT) decimal places??? This is VERY important when you're guessing at a price 10 months in the future...... This poor guy would develop carpal tunnel syndrome in his hand and go blind if they took his computer away......

I am seeing such irrational numbers at my broker site in confirmation emails. What I suspect is software was changed to get an average price of volume and price by lumping some, unknown to me, time period and then dividing by the volume.

That would do it so that is my theory - guess.

your model is dumb

the expected price of a Jan08 expiration is below 77 and above 65.50

the true price is the price real people are willing to buy and sell at and not some idiot statical model of your fiat world.

Most options are either too expensive or too cheap and therefore expire worthless.

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