Biotech Values

[exwannabe]

Black-Scholes will not apply here.

The model assumes a normal distribution of the price of the underlying equity at time of option maturity.

I don't think we need a PhD in econ. to tell us that this is nowhere near the case for a developmental biotech approaching a "binary event".

As to using the actual pricing to determine what the market thinks, I agree with your numbers. The problem though is that you could run the same calculations 1 week ago and get a wildly different answer. Despite what the talking heads say, the market is fairly stupid when the instrument can not be analysied by financials.