Forum Archive Index - June 2000

[James Lee <James.Lee@directbroking.co.nz>]

Hi

 

There are two ways the ratios work and unfortunately they are inter used.

The figure before can be for either both warrants or per warrant.

So the TELSB is 4.75 per warrant on top of the 19 cents.

-----Original Message-----
From: James S. [mailto:jsmalley@globe.net.nz]
Sent: Wednesday, June 21, 2000 5:06 PM
To: sharechat@sharechat.co.nz
Subject: [sharechat] A question about Warrants.... (Yes again)

Hi sharechat readers,

 

I've read all the previous sharechat posting about warrants but I still can't work this one out.

FEGSB 29/11/00 $5.50 2:1 warrants currently closed at .64 (21/06) with a underlying share price of $6.09.  Now assuming it takes two warrants at excise time to get a FEG share this implies a value of $6.78 ($5.50 + (2 x .64)).  I realise that the difference in the implied price and the actual FEG price is the 'time' effect that a derivative like a warrant allows.

 

But what about TELSB 29/03/01 $4.75 2:1 warrants?  Their current price (21/06) is .19 and the Telecom underlying share price is $7.50.  Thus using the above logic the implied price is $5.13 ($4.75 + (2x.19)).  Obviously that can't be right!

 

I would appreciate any help in explaining this to me.

 

Thanks in advance

 

James