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

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To: marcos who wrote (28701)	1/3/2007 11:38:33 AM
From: tyc:>	Read Replies (1) of 78416

>>look at the epm.wt.b that i like very much ok I did ! But here's why I prefer my RNG.wts. You hit the nail on the head when you said that out-of-the- money warrants provide better leverage. IMHO, leverage is the only reason for buying warrants. EPM.wt.b has a strike price of $1.50. With the warrant at .42c and the stock @ $1, the model I use says that the warrant will move 58% of the movement of the stock; if the stock moves up .20c, the warrant will move .115c. The stock price of $1 is only 2.4x the warrant price, and 58% of that is only 1.3x. That is poor leverage; one might as well hold the stock . RNG.wts have much better leverage. ( Of course none of this has any bearing on the quality of EPM as an investment. Simply saying the leverage offered by the warrant is not attractive to me.)

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