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

To: Radiosport who wrote (19257)	8/27/2006 7:33:08 AM
From: tyc:>	Read Replies (2) \| Respond to of 78416

>>"then if RNG doubles from 2.79...." It's important to realise that delta reflects the relationship of the price moves from the current level. The delta may be 30% from the current level but at the strike price it would be ~50%, and as the warrant gets deeper in the money it approaches 100%. Thus the way to calculate leverage from the current level is; $2.79/.40 (Stock price /warrant price) that gives the gearage=7x. If the delta were 100% that would also be the leverage). But the delta is only ~30% so you must take only 30% of the gearage and 30% of 7x = 2.1x. The stock is volatile, but this arithmetic says the warrant should climb from this level twice as fast. (someone should tell Mr. Market lol). Message 22755578 It is not true that as soon as the warrant is "in-the-money" it will move dollar-for-dollar. The relevant price curve today tells me that the dollar-for-dollar move will occur at 2x the strike price i.e. at $10. Of course, as expiry date approaches this point drops until at expiry it wll be at 1x the strike price. Again this is theory that Mr Market may not understand !.