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Non-Tech : Paired Trades and Hedging Strategies -- Ignore unavailable to you. Want to Upgrade?

To: menanna who wrote (59)12/22/2004 11:26:28 AM
From: tyc:>  Read Replies (1) | Respond to of 136
 
Hi Anna...IF the market price of the warrant is justifiable, its "delta" should be about 38%.

The strategy I suggested on this thread would be to buy the warrants in preference to the stock; saying that they represent a position equivalent to 38% of the stock price. With that holding as protection, one could trade the stock from the short side.... providing a hedged position with opportunities for profit up and down. (But the stock is too low priced for that)

MR is not particularly attractive to me right now, and the warrants don't seem very cheap in relation to the stock price. (but no doubt the market is a better judge of what's fair than I am )



To: menanna who wrote (59)12/22/2004 12:11:03 PM
From: Biomaven  Read Replies (1) | Respond to of 136
 
Anna,

If you could dig out the terms of the warrants I could take a look at whether they look undervalued or not.

But note there's a poster on SI by the name of LLCF who is both a precious metals buff and an ex-options trader. I'd expect him to have found them if they were a real good play.

Peter


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