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Options Provide Probabilities on Potential Future Stock Price Outcomes [Premium Subscribers]
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Options Provide Probabilities on Potential Future Stock Price Outcomes [Premium Subscribers]

Weekly updates on the innovation economy.

Drawing Capital
Jul 8
Share this post
Options Provide Probabilities on Potential Future Stock Price Outcomes [Premium Subscribers]
drawingcapital.substack.com

Introduction

Today’s newsletter by Drawing Capital explores the relationship between options and stock prices. Specifically, options provide market-implied probabilities on potential stock price outcomes. These probabilities are “market-implied” for two reasons: 

  1. Evaluation of market prices as the input variable and subsequent calculations create implied …

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