TGOD.WS ARE 3X UNDERVALUED TGOD.WT ARE 13X OVERVALUED
TGOD.WT ARE 13X OVERVALUED
TGOD.WS ARE 3X UNDERVALUED
There are a few different variables one can use to price Warrants, most important ones being Intrinsic Value & Time Premium.
INTRINSIC VALUE (IV) = Share price - Strike price
TGOD.WS (IV) = .5 - 1 = -.50$
TGOD.WT (IV) = .5 - 3 = -2.50$
The intrinsic value for both is out of the money but they trade above 0$ this is because we are paying for the Time Premium (TP), so lets calculate what thats costing.
TIME PREMIUM (TP) = IV + Market Val of Warrants {use absolute value for IV if out of money}
TGOD.WS (TP) = .5 + .085 = .585$ (for 3 years)
TGOD.WT (TP) = 2.5 + .08 = 2.58$ (for 1 year)
Now lets calculate the premium we are paying annually
TGOD.WS = .585/3 = .195$
TGOD.WT = 2.58/1 = 2.58$
2.58/.195 = 13
Simply put, we are paying 13x more for the same time premium when buying WT warrants
TGOD.WS ARE 3X UNDERVALUED
There are a few different variables one can use to price Warrants, most important ones being Intrinsic Value & Time Premium.
INTRINSIC VALUE (IV) = Share price - Strike price
TGOD.WS (IV) = .5 - 1 = -.50$
TGOD.WT (IV) = .5 - 3 = -2.50$
The intrinsic value for both is out of the money but they trade above 0$ this is because we are paying for the Time Premium (TP), so lets calculate what thats costing.
TIME PREMIUM (TP) = IV + Market Val of Warrants {use absolute value for IV if out of money}
TGOD.WS (TP) = .5 + .085 = .585$ (for 3 years)
TGOD.WT (TP) = 2.5 + .08 = 2.58$ (for 1 year)
Now lets calculate the premium we are paying annually
TGOD.WS = .585/3 = .195$
TGOD.WT = 2.58/1 = 2.58$
2.58/.195 = 13
Simply put, we are paying 13x more for the same time premium when buying WT warrants
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.