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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers -- Ignore unavailable to you. Want to Upgrade?

To: koan who wrote (19083)	8/25/2006 5:54:06 AM
From: tyc:>	Read Replies (1) \| Respond to of 78416

I bought more yesterday too. I couldn't resist ! Let's hope the market doesn't make fools of us !. By the way, if you punch the warrant detail into a Black Scholes calculator it indicates an implied volatility of 51% and a delta of 37%. Taking your calculation of leverage (2.80/.39 = 7x) and multiplying by that 37% arrives at 2.65x; implying that the warrant will move 2.65 times as much as the stock.... From this level, if the stock goes up 10%, the warrant might go up 26.5%. That's sure is attractive for a volatile stock like this. However, although the BS formula may give a fair indication of value, I don't think it controls the price of a warrant to the extent that it is used to set the price of options. Yesterday, the warrant price hardly moved. I believe a more realistic delta would be 30%, but that's still attractive..... (better than K in my eyes). AND hey ! maybe Black Scholes is smarter than me !