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Post by babaoriley on May 28, 2014 23:36:20 GMT -5
Baba, instead of the warrants wouldn't you be better off buying January, 2016 $2.50 calls at $5.80? They are a lot easier to buy and sell and are about the same price. Brentie, I can't argue with that strategy. The warrants have a little more life in them, maybe 3 weeks or a month, so that's not much difference, but you never know. And so far, yes, the options seem to be far more liquid than the warrants, which has been a disappointment for me. Biotec, lots of good advice on this thread, but since you asked again, I would slightly favor the warrants over the stock, if you are convinced we're going to succeed relatively quickly. And, as always, sell a few on the spike. |
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Post by trenddiver on May 29, 2014 3:24:01 GMT -5
I own both warrants and shares. When the spread is very narrow at it is now, warrants are the best play. As an example, if you want to control by purchase 6000 shares of stock at today's closing, it will cost you 6000 x 8.17= $49,020. If you want to use warrants to control the same 6000 shares and it will cost you $35,100 (10,000 x 3.51). You will have to come up with an additional $14,400 in Jan 2016 if you want to own the shares or you can just sell the warrant. Yes, the market is not as liquid, but that may change as we get closer to warrants expiration date. Effectively you are deferring $14,400 of the purchase at a cost of $480. The price of the warrant should pretty much follow the price of the stock at a ratio of .6 to 1.00. That is for every dollar the stock goes up, the warrant will go up .60, because each warrant entitles the holder to purchase .6 of a share.
The January 16 2.50 call is also a reasonable way to control the shares. To control 6000 shares through the Jan. 2016 calls, it will cost you $33,900 (based on today's close of $5.65 ), plus an additional cost of $15,000 (6000 sh x 2.50) at the time of exercise.
Thus the totals look like this for an purchase of 6000 sh.
Outright purchase $49,020
Warrants - $35,100 now + 14,400 in Jan. 2016 - $49,500
Call options - $33,900 now + $15,000 in Jan. 2016 - $48,900.
In conclusion It seems that Jan. 2016 $2.50 call options is the lest expensive way to control the shares today. The results could change based on bid / ask pricing. I view the risk for all three of these methods to be equivalent ( except for market liquidity. )
Trend
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Post by biotec on May 29, 2014 4:58:08 GMT -5
Thanks for all the information.
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Post by babaoriley on May 29, 2014 10:34:33 GMT -5
I hate these discussions about warrants, because it reminds me of being too stupid not to convert all my shares to warrants, when they selling for 37 cents. That's when they looked too good to be true. I only bought 12,000 for .37 and then 8,000 for .50 a couple of weeks later. I should have bought 200,000 like Baba did. When the warrants got pricey, I converted them all to $5 leaps, which provided more leverage at that time. I am currently using a sophisticated top secret options trading spreadsheet developed by a high tech military expert. Several other members of this board are also trial participants in this experimental spreadsheet project. I guess recently, I have been getting a little better using the spreadsheet, because the developer only called me stupid a couple of times today. If I had anything like 200,000 warrants, Spiro, one of them would have your name on it, seeking your arrest for spreading knowingly false rumors about me! Also, let us know the first day you don't get called "stupid" by your top secret trading partners, I understand they are a shrewd but seedy lot. Watch your step, it's said that they are not forgiving. For now, you seem pretty sharp to me, I did not imagine this stock getting to this level before approval. I wish I had the guts to sell a few warrants right now! |
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Post by spiro on May 29, 2014 11:33:29 GMT -5
Just to clarify things Baba, I actually thought you had 300,000 warrants. I am not surprised by today's share price, but rather disappointed we are not above $10 yet. I am still waiting for some on this board to start saying that FDA approval is factored in now, because of the high market cap, LOL, boy will they be wrong again. But of course, JMHO.
Spiro
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