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: Mario :-) who wrote (31546)	2/1/2007 3:16:56 PM
From: koan	Respond to of 78426

Mario, intrinsic value is simply the amount of money the wt is in the money e.g. RNG wts. If the stock is $6 the wts will have $1 in intrinsic value as the strike is $5.

To: Mario :-) who wrote (31546)	2/1/2007 3:59:18 PM
From: tyc:>	Read Replies (2) \| Respond to of 78426

Intrinsic value is easy ! A warrant gives you the right to buy a stock at a certain price: "the strike price". Its intrinsic value is simply the difference between that strike price and the higher current market price of the stock. The strike price of NGX warrants is $5, so right now the warrant has NO intrinsic value. However, if the stock goes to $7, the intrinsic value of the warrant will be (7-5=) $2. I presume your assessment that EPM warrants are "very overvalued" is taken from some sheet. However this sheet probably just compares the "implied volatility" of the current warrant price with the "historic volatility" displayed by stock in the past month. If the "implied volatility" is higher than the historic volatility of the stock, the writer says it is "over valued". But perhaps the market knows best ! I keep track of the EPM wt that has a strike price of $1.55 expiring 2010. With the stock trading today at .94c, if the stock doubles to $1.88, the warrant will have an intrinsic value of .33c. Using my measuring system there is no leverage and the warrant is therefore unattractive to me at present. That is not to say that the stock is unattractive. I shall continue to keep it in my sights. The market knows best !