Annual Review — TARP Warrants

by Travis Johnson, Stock Gumshoe | January 16, 2014 3:49 pm

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Source URL: https://www.stockgumshoe.com/2014/01/annual-review-tarp-warrants/


4 responses to “Annual Review — TARP Warrants”

  1. hgpark888 says:

    One question I have is how do you buy warrant?
    I use questrade.com and I reside in Canada.
    I am very curious about warrants as I love listening to your ideas and I want to try warrants this time.

    But, tickers doesn’t work on my system and I don’t know how warrants work exactly.
    Any one experienced with Questrade?

  2. ngoken says:

    How are the pnc warrants priced vs pnc 2018 call options at the same strike price? What are the implied volatility? Thx

  3. ngoken says:

    OK. I ran the PNC warrants through bloomberg’s option pricing calculator. At the current PNC-WT price of $20.77, PNC underlying at $82.27, strike of $67.33, 2.85% dividend yield, and expiry at 12/31/2018, the implied vol on the warrants is 24%. Long term leaps of large financials like BAC, JPM, etc are trading at similar vols. Seems the warrants are fairly valued. Buying the PNC-WT is really just a leveraged directional bet on PNC. IMHO, you’re not really getting anything special here. I think it would be a good deal if the warrants are priced at below market implied vol or premium.

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