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To: Metacomet who wrote (47546)8/18/2007 12:25:40 PM
From: koan  Read Replies (1) | Respond to of 78424
 
Metacomet, if EPM goes to say $5, both the A's and the B's will trade with little time premium, so the A's will trade at a .35 premium to the B's at that time.

Also the leverage should be about 1.1/1.2 at that point and I will be long gone-lol.

The reason I bought some B's last week was I got them for .31 while I had to pay .45 to .50 for the A's, so I got the extra share control for the same amount of money.

And if the stock goes to $5 the .35 will be offset by the extra shares I got for the same amount of money.



To: Metacomet who wrote (47546)8/19/2007 12:40:39 PM
From: LLCF  Respond to of 78424
 
That's why one should look at the value of the warrants @ CBOE.com as one reference point. It's a mistake IMHO to pay 75v for one if the other is offered @ 50v. The BS value takes into account all relevant information unless you have reason to believe you know something about the value of the stock (a top, or bottom, or time frame of future value) that the model doesn't.

JMO

DAK