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: onepath who wrote (58205)	4/6/2008 10:21:49 AM
From: tyc:>	Read Replies (2) of 78408

May I join the discussion?... It's hard for me to get enthusiastic about a nine year warrant ? (is it my age or my experience ? lol) I hang my hat on the system of assessing warrant leverage that I have used over the years. If the stock doubles in price to $15, a reasonable target, what will the intrinsic value of the warrant be ? It still won't have any intrinsic value, and that spells lousy leverage, in my language. Would the leverage improve if the life of the warrant were even longer ? In the short term, the common stock has climbed about 6% in the past week, but it looks as if the warrant hasn't climbed at all. No sign of leverage there if that's true. It runs in my mind from way back that Black Scholes option evaluation was originally intended to apply only to options that have less than a year of life. I'm a little dubious about using it for a nine year warrant. Nevertheless, mining stocks themselves certainly have an option-value component as a call on metal prices. That's what makes common stock attractive.

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