Facebook. $29?

May 30, 2012

“Pricing on the options contracts, which allow a trader to buy or sell the stock at an agreed price at a future date, suggested that traders expect Facebook to be about three times as volatile as the broader US stock market, or twice as volatile as Apple’s share price.” For the full article by Telis Demos at FT see here.

2 Responses to “Facebook. $29?”

  1. tcs Says:

    If you believe the CAPM, that would suggest that a certain amount of its price is a volatility premium, i.e. compensating investors for the risk they take in holding that stock. So, if Facebook had the same implied volatility as the broader US stock market, it’s price would be even *lower*.

  2. Myspace as a social networking secretly came to be in Harvard university in Cambridge, ma which in turn at present positioned as the 2nd largest social networking behind websites like myspace …Real Estate Photography

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