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Playing & Trading Strategy

Questions about Warrants, using The Martain as an example.

Posted by: Baron_Darcon on Oct 29, 13:12

Okay first how often do Warrants appear in the derivative section?  

Do we just have to look periodically?  

When do they appear, after the 4th week of a blockbuster?

What detemines if they offer a warrant?

So currently The Martian has a strike price of $170 Million, it's earned $168Million as of yesterday, it has a price of $10.56 so I gather for me to earn a dime it has to make $180Million. Which is a sure thing now.  If it makes say $220 Million,  which is $50 million over strike price and $40 million over what I purchased them. 

So when it cashes out at 12 weeks and I have 20,000 shares so should I get 20,000 x $40 = $800,000?  

Now if I decide to get out of the derivative before the 12 weeks I have to use the cover option, correct?

Shorting the derivative if I'd think it wouldn't make the strike?

Thanks.

 





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