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Gold/Mining/Energy : Precious and Base Metal Investing -- Ignore unavailable to you. Want to Upgrade?

To: Tommaso who wrote (11284)	5/21/2003 2:38:05 PM
From: marcos	Respond to of 39344

Good points Tommaso ... one of the things going on with the warrants is they were being used to hedge against a short on the common, or so some said .... if that's the case to any considerable degree, then a probability exists that the hedge will be unwound at some point, and we can't know when This morning 616k of the wrm.wt.a traded at cdn.47, meantime folks were paying cdn.52 for some of the original wrm.wt model ... why? - you tell me .... it's just been amazing the gap between these two, when they represent exactly the same right to purchase at the same price for the same time period .... the old priest was right maybe, 'it's all a mystery my son' The warrants were great traders over the last few months, but from here i like the common better ... that being said, i think both will win in the end, and it's highly probable imho that the warrants will win bigger - this is the old Vengold management, remember, and when we get rolling on the goldstock boom, they will make 'er pay, you betcher boots they will ..... but recall also, how Vengold tanked to almost nothing in the meantime, before they played the dotcom bubble with what they salvaged out of Lihir - and how the ven.wt expired worthless ... in this case they have four years more in current warrants, i say they get cheaper first, then quite dear later on Best call option on gold is Alamos common, imho .... simple, clean, high quality in both people and property, no time decay, cheap - what is it at now, around usd14 per recoverable ounce, in just one of the zones at Salamandra

To: Tommaso who wrote (11284)	5/21/2003 3:28:28 PM
From: LLCF	Respond to of 39344

Excuse me but I stated a simply truth, you were incorrect on your assertion that a falling $CD was bullish for the American warrants. period. IF the two dollars are par, the warrants WILL trade at about the same price. I assumed the American ones would rally to the Toronto price because Toronto seems to be the main market, that might not be entirely true, but your statement was backward FWIW. <If the two currencies were on par with one another, you would have to PAY $1.65 in US money to get the stock.> Of course. If your money is in $US it devalues vs $CD when it rallies. <Right this minute, to exercise the warrant, you would only have to pay $1.22 in US money. If, tomorrow, the dollar and loonie were equal, you would have to PAY $1.65 in US money to get the stock.> But your warrant priced based on the underlying in Toronto has increased in value as that stock rallies in $US. <Buying the warrant is not the same thing as buying a traveler's check in Canadian money. < No it's not. :) <The warrant is an agreement that you will pay a certain amount in Canadian dollars. For a US investor, there is this currency risk.> The warrant is AN OPTION to pay a certain, etc etc. And the currency risk is the same DIRECTION as that of the underlying stock only to a lesser extent, if the $CD falls you lose ceteris paribus. All you're saying is that since buying the stock puts the money in $CD UPFRONT, you don't miss out on the $CD advance on a portion of your money, which of course is true: << If the Canadian money appreciates against your own currency, you have to convert more of your own currency to make that purchase. >> Yes, as I've said repeatedly... but that DOESNT mean you want a falling $CD, in that case the warrants become worth LESS not more. <You can own WHT stock, and not lose any money at all if it remains at its present value. But in that case you lose 100% of anything you put in the warrant.> Yes, that IS the nature of options and warrants. <Anyway, for US investors, those warrants will behave inversely to the loonie, as has already happened. > No, incorrect again, but I've been through that. As far as 'already happened' the stock is also lower no? <. Only if the stock itself has a huge move upwards will they turn out to be a good idea. > Sure there's some truth to that [although I expect gold to go to 1000], but you do miss the fact that we have years of life left, and the warrants will move more than your expiration day analysis if moves come quicker. For instance the CBOE calculator suggests that you double in the stock tomorrow morning [to the $2US you sighted] would price the options on the AMEX at about $US 1.28. My last post on the topic. PM me for more warrant info if anyone cares. DAK