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Gold/Mining/Energy : Canadian Warrants Only
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To: gravityz who wrote (20847)8/22/2011 11:34:48 AM
From: koan  Read Replies (1) of 23095
 
These thesis is, that when any wt crosses the stirke price it startes to exchange time value for intrinsic value.

Right now the A's are worth $4 and the B's .80. If NGD passes through $15 the wt will actually slow down in value as time value is exchanged for intrinsic value. It is a sort of mystical process many don't understand. As the wt gets deeper into the money it will speed up again as it will move close to 1 for 1 with the stock more or less.

Right now the A wt offers 3.25 to 1 leverage and B's 16 to 1 leverage. And the A's to B's 5 to 1 ratio.

Now lets assume NGD gets to $35. A big if-lol. At that price both the A's and B wts will have less than 2 to 1 ratio, wt to the stock i.e. wts will be worth $20 intrinsic value.

So time value will be less important as there is so little leverage and both A's and B's will mostly just reflect intrinsic value.

I know it is confusing having explained for about 30 years. If we move into the money we can all watch how this metamorphasis from time to intrinsic value takes place.
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