REEF.W0019

aero · 1 REEF.W0019 Tue Sep 11, 2012 2:57 pm

aero

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Do you know,who is selling REEF.W0019?
WNHP Rolling Eyes

...??

marusira · 2 Re: REEF.W0019 Tue Sep 11, 2012 3:30 pm

marusira

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aero wrote:Do you know,who is selling REEF.W0019?
WNHP ...??

lots of selling ne..

hariesha · 3 Re: REEF.W0019 Tue Sep 11, 2012 5:15 pm

hariesha

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Same thing was evident in CITK some days back.

REEF 19 is the only warrant in CSE that does have a positive value at current prices. When REEF.N0000 is at Rs.34/- valuation of warrant 19 should be Rs.14.06. At current prices REEF.19 is highly undervalued.

In last march, when REEF.N was trading at Rs.31/- REEF.W19 was traded at 7.80. So actually W19 should go along with REEF.N at the same phase.

This lagging behind is because the negative perception due to failure of couple of warrants during last 12 months. But with REEF 19 there's ample time as conversion date is in 2015.

If this market conditions prevailed for another couple of weeks, surely REEF.W19 will come to its real value.

As W19 is highly volatile it gives lot of trading opportunities for the moment.

smallville · 4 Re: REEF.W0019 Tue Sep 11, 2012 6:32 pm

smallville

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hariesha wrote:Same thing was evident in CITK some days back.

REEF 19 is the only warrant in CSE that does have a positive value at current prices. When REEF.N0000 is at Rs.34/- valuation of warrant 19 should be Rs.14.06. At current prices REEF.19 is highly undervalued.

In last march, when REEF.N was trading at Rs.31/- REEF.W19 was traded at 7.80. So actually W19 should go along with REEF.N at the same phase.

This lagging behind is because the negative perception due to failure of couple of warrants during last 12 months. But with REEF 19 there's ample time as conversion date is in 2015.

If this market conditions prevailed for another couple of weeks, surely REEF.W19 will come to its real value.

As W19 is highly volatile it gives lot of trading opportunities for the moment.

Actaully REEF.W19 sees the valuation as follows;
if convert to shares in 2015, the conversion price is 40 or 50 (cant remember), lets take as 40 then if you buy today at 7, the total cost will be 47 if u hold on to it.. So at the moment its not worthy unless REEF passes 50. Last time we saw the rally of REEF near the warrent conversion time of W18 and REEF touched 38, with that REEF.W19 touched 9 after beaten down to 2.

But the irony is REEF wont stay in 30 regions for another 2.5 year know? So wit time if REEF comes to at least 100 (in 2 years I mean), then REEF.W19 may worth at least 50 (without the conversion price). That's what we're betting on..
Cool

hariesha · 5 Re: REEF.W0019 Tue Sep 11, 2012 9:53 pm

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Values of warrants are derived from two parameters.

1. Intrinsic Value
2. Time Value

Intrinsic value: This is simply the difference between the exercise (strike) price and the underlying stock price. Warrants are also referred to as in-the-money or out-of-the-money, depending on where the current asset price is in relation to the warrant's exercise price. Thus, for instance, for call warrants, if the stock price is below the strike price, the warrant has no intrinsic value (only time value—to be explained shortly). If the stock price is above the strike, the warrant has intrinsic value and is said to be in-the-money.

Time value: Time value can be considered as the value of the continuing exposure to the movement in the underlying security that the warrant provides. Time value declines as the expiry of the warrant gets closer. This erosion of time value is called time decay. It is not constant, but increases rapidly towards expiry. A warrant's time value is affected by the following factors:

Time to expiry: The longer the time to expiry, the greater the time value of the warrant. This is because the price of the underlying asset has a greater probability of moving in-the-money which makes the warrant more valuable.

Volatility: The more volatile the underlying instrument, the higher the price of the warrant will be (as the warrant is more likely to end up in-the-money).

Dividends: To include the factor of receiving dividends depends on if the holder of the warrant is permitted to receive dividends from the underlying asset.

Time value is calculated using various formulas and most famous is the Black-Scholes evaluation model. Ssome stock brokers are publishing those on daily basis. Following is the figure published by Capital Trust Today.

Market price of REEF share : Rs. 33.70
Intrinsic Value of W19 : Rs. -6.30
Time Value : Rs. 20.06
Total Value : Rs. 13.76
Last Traded Price : Rs. 6.80

This is the only warrant which is undervalued comparing to the normal share currently in CSE.