xdll, the relative values of the P's, C's, and W's are always in flux, changing with every tick. A fair value is what you determine it to be based on your set of circumstances. I don't mean to be preachy, but all any of us can do is determine what our strategy (based on your needs, objectives, current $$ situation, risk tolerance, etc.) with this position is, ie., long, short term, day trade, etc. and see what appears to best suit that strategy at any given moment. The math is the simple part - it's black and white. For example, based on Friday's close:
35 C's @ $1.0625 = $37.1875 invested / avg cost per C - $1.0625
1 P [ex] = 35 C's [10/1/98] @ $22 = $22.00 invested / avg cost per C - .62857
35 W's @ .42 + .50 conv fee = $32.20 invested / avg cost per C - .92
From my perspective, the P's were/are a steal - RELATIVE to the others. Will you be around on 10/1/98 to realize the conversion of P's to C's? Depends on your strategy. Would you prefer to hold cash back with the W's until you absolutely have to come up with the conversion fee? Depends on your strategy.
Here's the kicker, two minutes after we make a well thought out reasoned decision, the market changes and the best buy becomes the worst buy. No problem, just wait another two minutes and it will change again. Bottom line - if you believe in the company and the goods, you won't let it bother you (too much).
IMO, on any given day, coming in at the right buying time is where you can make it or break it, but that's a whole other discussion.
Didn't mean to ramble, just my .02 - make your own reasoned guesses. <G>
Steve |
