warrants

[Russ]

On 9 Dec,just 2 weeks ago, I bought inpsbj at 18c when inp itself was at R5200.Now inp is up a bit (about 1.5%) to 5280 and the bids for the warrant are at 16c.Thanks to time decay and spread if I sell now I will take a loss of 2c per warrant although the underlying share has gone up.Add costs on to that and you can see how difficult it is to make money on warrants,unless your timing is perfect and the underlying moves quite strongly.

[#2]

the low warrant price makes it worse. I try to find higher prices. Simon's previous advice is ... if the barrier is far enough away, it's not an issue .. check for days to excpiry more then 90 .. price high (always above 20c, but higher is always better) .. strike within 10-15% of spot .. gearing 6-8 for index ..

[Wizard]

That's very true! That's why I hate them. If you bought the instalment on the share you probably would have been in the money! I would only buy a warrant if I anticipate a strong move.

[Russ]

Me too,Wizard,but what I anticipate and what the market does are not always the same!

[AJT]

ha ha - so true...

[#6]

Just a quick question - why do you hold on to a warrant for so long? if it makes nothing within say 3 - 4 days let it go. Regards..