Intel Warrants? Buy, Sell or Hold? Message Board

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Technology Stocks : Intel Warrants? Buy, Sell or Hold?

INTC 41.50

+5.0%

Oct 28 3:59 PM EDT

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To: Andrew Chow who wrote (1)	9/28/1996 9:11:00 PM
From: Ron Mayer	of 36

Warrent vs option question. Ok, I think we now established that in many important ways, INTCW is extremely similar to a hypothetical Mar 98 41.75 call option which is quite similar to the actual Jan 98 40 call WNLAH. We also established that they do not track each other perfectly (like when Andrew pointed out that INTCW looked overvalued in march). This brings up the question of whether it would be possible to buy the WNLAH option and short INTCW or buy INTCW while writing Jan 98 calls, and almost certainly make money unless something big happens in early 98 when INTCW will may still have a little time value but WNLAH will have none? For example if I buy INTCW and write WNLAH options, in Jan of 98, if INTC is over about 50 (so neither have significant time value left) I'll have (INTC_price - 41.75 - INTCW_price) + (INTC_price - 40 - WNLAH_price) What's wrong with this analysis?

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