Precious metal company Warrants Message Board

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Gold/Mining/Energy : Precious metal company Warrants

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To: LLCF who wrote (639)	4/16/2007 9:41:12 PM
From: LLCF	Read Replies (1) of 681

<The VI for one year is used for the calc of the BS model> I don't know who that would be... there are whole teams of folks trying to divine what the VOL will be to use in those models at any self respecting options house... historical vols are used depending on what the 'team' thinks of their worth. <The BS model is close to what Ed Thorpe> The (modern versions) BS model is an incredibly valuable tool especially in a sector where there are so many warrants to choose from. It's comparitive value is worth a ton compared to one decision... ala Vegas as you point out. In fact the model at it's worst helps one understand evrything about how warrants move in relation to the stock, acts in buyouts (ala RNG and others), and even explains why leverage can be good or bad AND helps show where the leverage is cheapest or most expensive. Anyone who disputes the worth of options models in favor of shooting from the hip with some gearing ratio's really doesn't know what he's talking about. For anyone with limited funds I can't recommend analyzing the investment decision (in warrants) enough. Good luck though... the tide is rising, so I expect all boats to rise. DAK

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