Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: marcos who wrote (28691)	1/2/2007 11:51:46 AM
From: tyc:>	Read Replies (1) \| Respond to of 78416

>>....and they need near a double on the common to be in the money ... hmmm Who cares how far it is O/M ? Not me ! When I play with warrants one of the questions I ask is, "Is there sufficient time for the warrant to double in price ?" The answer to that question depends on: 1. The volatility displayed by the stock in the past, (and the fundamentals of the company that should indicate that the volatility will be mainly up or down). 2. The leverage to be expected in the price action of the warrant relative to the price action of the stock. IMHO RNG scores well on both. At current levels, the warrant should move ~30% of the movement of the common. Koan would say that leverage is 6.7x (2.90/.43); I say it is only 30% of that i.e. 2x. However that means that right now and in the short term the warrant's value should enhance at twice the rate of the common. If the stock climbs 10% in price, the warrants price might be expected to climb 20%. (If it doesn't, it has become even more attractive.) The point I'm trying to make is, "Who cares how far it is out of the money, if that is how the warrant will move in the short term and you are bullish on the stock ?"