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sklargh • today at 3:06 PM • 1 reply • view on HN

I’d think that orders for long lead time rivalrous slots of a very finite resource are basically OOTM call options for future demand. It says something that firms think demand is plausible but not a whole lot about how probable it really is. You can always idle these things, you can’t conjure one immediately.


Replies

c-fe • today at 3:13 PM

Welcome to the field of real options! https://en.wikipedia.org/wiki/Real_options_valuation

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