QuoteOriginally posted by: daveangelthey are options. a covered warrant is usually issued by a third party on another stock - say RBOS on BA that sort of thing. largely a retail market. issuers may have some market making responsibility. re the pricing of the warrants you mention there are many reasons why they could be different. you say the terms are the same - is the strike price the same, or the conversion ratio ?I don't think I'm allowed give the ISINs here but here's the infoRatio: 1Expiry Date: 17 June 2011Strike: the sameThe only thing that's different between the two in the 'sensitivity data' is the gearingCheap one:Intrisic Value 355.050 Break Even ( GBP ) strike + 0.05 Moneyness ( GBP ) 355.05 Premium 98.054 Gearing 16,530,151.95 Effective Gearing 16221456.274 Delta 0.981 Theta 0.000 Vega 0.000 Rho 0.000 Expensive one:Intrisic Value 355.050 Break Even ( GBP ) strike + 0.09 Moneyness ( GBP ) 355.05 Premium 98.043 Gearing 4,895,213.63 Effective Gearing 4803796.991 Delta 0.981 Theta 0.000 Vega 0.000 Rho 0.000 As for the market making responsibity... if I bought an entire tranche would they *have* to buy them back from me if I sold?
Last edited by dd3
on July 6th, 2010, 10:00 pm, edited 1 time in total.