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To: koan who wrote (38246)	4/14/2007 12:06:06 PM
From: E. Charters	Read Replies (1) \| Respond to of 78408

you would lose more as you are so deep into warrants it's like junk ... you can never tell when you have too much of the stuff.. who can say how much they would have bot of anything? No matter the sticker price the money gets burnt. If they are cheap, you get more of them..

To: koan who wrote (38246)	4/14/2007 2:03:40 PM
From: LLCF	Read Replies (1) \| Respond to of 78408

<<Swamp dog, I was speaking if you own either one share of stock: say BWR stock versus one BWR stock wt. Both would have approximately the same upside (as the wts are so deep in the money), but if the company went bankrupt one would lose approximately 1/2 with the wt that they would have lost with the stock. They only paid one half. Because BWR wts are so far in the money time deterioration is almost negligible, at this point. If one puts the same amount of money into the BWR wts they get 2 to 1 leverage, so they will make twice as much if the stock continues upoward. For the same investment dollars.>> Again you're not being consistent, you're touting leverage while dismissing SwamppDog's concerns about leverage. Swampp Dog is correct, if you're buying something for the leverage, you simply lose all your money quicker. Your point about not losing as much money is true because you DONT leverage. Looking at the warrants value using a proper model is a different discussion than leverage... which can be obtained in a number of ways, including simply margin in your account. DAK

To: koan who wrote (38246)	4/16/2007 6:48:47 AM
From: E. Charters	Read Replies (2) \| Respond to of 78408

Koan: The warrant/stock must go up to make any money. You can keep your money if the stock goes nowhere. The warrant degrades, while the stock only loses interest. IF is the operative word.. Still, I think that most people miss the fact that the way options are valued is based on time, and volatility history.. this is betting statistically on the chances of gain.. a point the brass instrument calculators miss.. LTCM lost all because the bet wrong about outcomes of cornering markets.. its all looking into the future, no matter what you buy or how you buy it .. the price of a stock or option is based on what people will pay for it.. they are all betting on the future.. so the should put in a human factor or group hysteria analysis to really price things right.. The flux of the VI is the stat history of momentum. This is what puts the price on an option. It is the finite chance that if it fluxed x up and down on the average, the its chance of gain is increased by a percentage of X given Y time to live. There are myriad stock calculators who take advantage of that flux fact, including Shannon's 1955 information theory, now fractal calculator.. In fact stat history wave interp is what makes modems work and coding get thru noise in psuedo random signals for GPS and weak fibre signals.. You are right to beat the drum about leverage as everybody buying is betting long under a certain time constraint... and any security in the instrument is simply a different kind of time loss by interest degradation, but you must temper it with time value, as the great degrader of time chews steadily away at the warrant.. In this way it is wise to use BS as a guide.. while remembering it is market sentiment that is the best factor to guide whether or not to speculate at all.. EC<:-}