AAII Program #1
			       Stock Options (STKOPT)
                                          
                              (c) Copyright 1982 by the
                               American Association of
                                Individual Investors
          
          
          This program calculates the theoretical value of call options
          based on a variation of the theory developed by Black and
          Scholes.  The "Delta" is the fraction of the stock move that an
          option will move for any SMALL MOVE in the stock.  The "Ratio" is
          the number of options that combined will have the same profit or
          loss as the stock for a small move.  The theory of put valuation
          has not been completely developed.  In this program, two separate
          estimates are given.  The one labeled "conversion" is generally
          accepted and is based on the terminal relationship to the call
          value.  The other estimate is equal to a call with equivalent
          conditions.  This valuation is appropriate to those using puts as
          a substitute for shorting the stock AND assuming that the
          proceeds of a short sale would NOT be immediately given to the
          short seller (the normal condition and contrary to the assumption
          of the conversion approach.)
          
          The inputs for the program are straightforward.  The T-bill rate
          is usually used for the risk-free annual interest rate.
          Volatility is the annual standard deviation rate of returns.
          This figure is provided by some services or can be calculated
          with AAII Program #3, STATS.  It is the ASD (not the Beta).