Intel Warrants? Buy, Sell or Hold? Message Board

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Technology Stocks : Intel Warrants? Buy, Sell or Hold?

INTC 41.35

-0.4%

3:59 PM EDT

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To: FlyersFan who wrote (31)	6/5/1997 4:07:00 PM
From: Andrew Chow	of 36

Like I have written before, INTCW's price embedds the borrowing cost for the amount of money (strike price in this case) borrowed. But the tax treatment is worse than the tax treatment for margin interest. Now as time passes and we get closer to the 3/14/98 expiry date, this becomes less of an issue. Similarly using the implied vol as a measure of the relative richness or cheapness of INTCW vs. the Jan 98 exchange traded options becomes less relavant. What you are going to see increasingly as we get close to 3/14/98 is convergence between INTCW and present value of INTC - strike price. Actually right now the smart money is noticing the inverted vol curve with respect to strike price for Jan 98 calls. You don't see that in the Oct 97 or Jan 98 calls do ya?

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