Quote from: fillippone on Today at 02:32:36 PM

Quote from: ndalliard on Today at 02:24:11 PM

price is determined by supply and demand, isn't that a fact like 1 + 1 = 2 ? [

The price of an option on a stock has nothing to do with supply and demand. It relies on non-arbitrage condition that determine the unique price. Not saying this model relies on non-arbitrage hypothesis, but no, price is equal to match of supply and demand is not 1+1.

Quote from: ndalliard on Today at 02:24:11 PM

sorry i don't get it: why will the price eventually hover around the model price?

Model cannot micro-estimate or precisely track the bit on. Price, but if you want it to be right, in the long run price has to recover to model price. That’s it. Not too scientific.

I have proclaimed on many occasions that the S2F model either presumes demand as a kind of constant or presumes that demand is just going to go up with whatever the conditions and pressures of the market that are contained in looking at supply pressures. Maybe my way of conceptualizing and phrasing is not correct either?... and personally, I have also considered the S2F model to be a valid way of attempting to give odds to what is likely to happen in bitcoin in terms of ongoing price dynamics - even if actual facts might end up causing the curve of the S2F model to have to end up getting shifted down or up based on what ends up actually happening (or as the data flows in)...

How do you account for demand in the future anyhow beyond just attempting to treat it as some variation of a constant? I bet that the S2F ends up beating the pants off of any model that attempts to account for demand in any kind of way that takes much of anything away from the supply emphasis aspect that is already contained in the model....

Another vague concept that seems to attempt to explain demand and underly what is pushing underlies bitcoin price dynamics is the exponential s-curve adoption based on Metcalfe principles and networking effects.. which surely those kinds of ideas account for a kind of ongoing onward trajectory of demand that is going up with ongoing adoption and the ideas do not seem incompatible with S2F in terms of being able to use (or even presume) such ideas to consider what is happening with demand as an ongoing upwardly trajectory in a way that complements s2F's attempts to tell us where we are likely going based on where we have been and where we are at.