Gold and Silver Juniors, Mid-tiers and Producers Message Board

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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers

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To: tyc:> who wrote (19290)	8/27/2006 5:37:15 PM
From: E. Charters	Read Replies (1) of 78413

You are right, you have to take into account the delta. What K is saying is that the delta will change in sudden moves. He is right there too. The volatility co-efficients should put a price on it. Delta is the RATE of change of the warrant with respect to the stock price.. it changes as the price changes too.. K may be using a seat of the pants acceleration preponderance here.. to overvalue his warrants with a fudgeriedoo factor, independent of volatility.. which is another story.. Trouble is everybody is using black scholes on warrants so there are few bargains.. except where you can see major moves the volatility co-efficients don't factor. that is the area of crystal ball gazing. crystal ball gazing must be done with brass balls.

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