RE: Cambior Rebound - snowydayAt the risk of being perceived as a doomsayer I could not agree with you more. Sure someone is going to point out that the Ds moved today - so what? I look at simple economics and also get some help from some software that helps calculate time value of options / warrants.
With CBJ at 2.90. Ds were trading at 22 cents and the Cs at 82 cents. Those numbers implies that the time value for the Ds is about $1.62 (4.35-2.90 + .22) while the time value for the Cs is $1.67 (3.75-2.90+.86). To me that means that if i were brave enough to buy the Ds, I would be banking that the stock would be going up by $1.62 in the next 4 months so that I could cash out, exercise the warrant and buy one share at $4.35. Why would I do that instead of buying a little over half a share for the same price and if nothing were to happen over the next 4 months I would still have half a share?
The logic defies me but the warrants still trade at what I think is a huge premium. The Cs are a little different story because of the much longer time to expiry. You have to do your own math and judge that based on your level of risk acceptance.
cheers