| Author |
Message |
basant
Admin Group
Joined: 01/Jan/2006
Location: India
Online Status: Offline
Posts: 18403
|
   Posted: 18/Oct/2006 at 11:46am |
No the online brokers do not have the warrant series turned on since it is very illiquid. You need a broket for that.
We can discuss and inform each other about the warrants listed . The warrants that are outstanding is difficult to know the best way is to look at the ET stock quotes and if we find the warrants listed there then the original holding could be swapped for the warrant. See warrants should be bought only when you are bullish on that particular stock. Now why this differential pricing you could say so there the answer is that there is a severe lack of liquidity which prevents a clear pricing to emerge.
Edited by basant - 18/Oct/2006 at 11:46am
|
|
'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
|
 IP Logged |
|
|
|
 |
|
Vivek Sukhani
Senior Member
Joined: 23/Jul/2006
Online Status: Offline
Posts: 6675
|
Posted: 18/Oct/2006 at 11:57am |
Just a little technical question. Has the total outgo to be 280(CMP of the warrant) + Rs. 650(that we need to pay on conversion). or the outgo has to be just Rs. 280 which will translate into that the current holder has already exercised his option.
In case, the first case is true, the total sum payable will be Rs. 650+280=930 which is slighly higher than the Current market price of Trent.
This may be a silly question but am asking just for information.
Edited by Vivek Sukhani - 19/Oct/2006 at 12:00pm
|
|
IP Logged |
|
|
|
omshivaya
Senior Member
Joined: 06/Sep/2006
Location: India
Online Status: Offline
Posts: 5966
|
Posted: 19/Oct/2006 at 12:00pm |
|
Thanks Basant ji. So, for warrants, one has to go physically to buy it? Did I get it right?
|
|
The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it
|
|
IP Logged |
|
|
|
basant
Admin Group
Joined: 01/Jan/2006
Location: India
Online Status: Offline
Posts: 18403
|
Posted: 19/Oct/2006 at 12:00pm |
In case, the first case is true, the total sum payable will be Rs. 650+280=930 which is slighly higher than the Cyrrent market price of Trent. => You pay higher for the leverage and the time value of saving on that initial investment. With warrants you could buy Trent for Rs 330 and not Rs 880 so that differential money is saved.
|
|
'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
|
|
IP Logged |
|
|
|
basant
Admin Group
Joined: 01/Jan/2006
Location: India
Online Status: Offline
Posts: 18403
|
Posted: 19/Oct/2006 at 12:02pm |
Originally posted by omshivaya
Thanks Basant ji. So, for warrants, one has to go physically to buy it? Did I get it right? |
Yes and please do not rush in buy it in small quantity. In fact it took me about a month to get some quantity in July.
|
|
'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
|
|
IP Logged |
|
|
|
basant
Admin Group
Joined: 01/Jan/2006
Location: India
Online Status: Offline
Posts: 18403
|
Posted: 19/Oct/2006 at 12:04pm |
|
Om Shivaya: They are not physical. they come in demat form just that online trading platforms do not have that option to buy warrants.
|
|
'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
|
|
IP Logged |
|
|
|
Vivek Sukhani
Senior Member
Joined: 23/Jul/2006
Online Status: Offline
Posts: 6675
|
Posted: 19/Oct/2006 at 12:05pm |
Another simple question..... just want to know how have you arrived at this figure of 330. Is is the Net Present Value of something? If that is the case, then kindly tell shall we discount ot by what figyre
Also kindly let us know whether we have to pay just 280 or 930.
Basant, my knowledge about stock option and convertible warrants is not good , so I am asking such silly questions.
|
|
IP Logged |
|
|
|
basant
Admin Group
Joined: 01/Jan/2006
Location: India
Online Status: Offline
Posts: 18403
|
Posted: 19/Oct/2006 at 12:11pm |
Another simple question..... just want to know how have you arrived at this figure of 330. Is is the Net Present Value of something? If that is the case, then kindly tell shall we discount ot by what figyre
The Net present value of RS 650 payable after 3 years is Rs 500. I have deducted Rs 500 from Rs 880 which is the CMP. We get Rs 380. Now Trent is making a rights issue the exrights price should bring down the MP by Rs 50 since warrant holders will not get rights shares the price is further reduced by Rs 50 so we get Rs 380 - Rs 50 = Rs 330
Also kindly let us know whether we have to pay just 280 or 930.
Rs 280 or Rs 330 whatever be the price of the warrant is payable now Rs 650 is payable in early 2010.If Trent falls to 0 you lose only Rs 280/330 price of warrant if it goes to Rs 3000 then you make a killing since you have full upside, warrant will be converted in shares in 2010!
|
|
'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
|
|
IP Logged |
|
|
|
Active Topics
Memberlist
Calendar
Search
Help
Register
Login
