Did I even so much as mention Black- Scholes? Never mind advocating for it? No. You are creating a straw dog to distract from your naive notion that converting options early is sensible.
You don't need to adhere to an unrealistic or idealistic pricing model though to accept that optionality has a value, and that what you advocate destroys that value. It does regardless of whether B-S is a crock.
You say the ASX pricing of options doesn't conform to B-S.
So what does it do, price the option as the heads price less conversion price? No, it does add a premium to that, it values the optionality, and with no reference to Black-Scholes.
If your views about options were correct then we'd be seeing a lot of conversion of TRL options now that they are " in the money". But we are not, because most holders don't have rocks in their head, they understand the value of optionality (however they estimate it). Ditto heaps of other stocks with in the money options, they are rarely exercised early.
EL
TRL Price at posting:
5.4¢ Sentiment: Hold Disclosure: Held
