Are long-dated options correctly priced?

One observation that strikes any beginner in the FX markets is that during trends, buying and holding options looks an easy winning deal. Does option pricing reflect this?

One of the main assumptions of the classic pricing models is that changes in financial assets are random variables.

This is the classic equation leading to options pricing models: dLn [ P(t) ] = [Mean]dt + [sigma]dz where dz is a brownian factor and t represents time.

One has to briefly examine in what conditions a trend

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