Comerica Warrants Math Question

Discussion in 'Options' started by Kirribilli, Apr 30, 2018.

  1. I know they are not options but seem close enough. Anyway, I see these trading at like $16 with a 7.17 strike and a multiplier of like 4 (0.239999998). The stock is trading at 96.

    Q: Do I apply the multiplier to the stock price, which makes sense market-wise, or to the number of shares or fraction of shares a warrant gets?
     
  2. tiddlywinks

    tiddlywinks

    Upfront, I admit I have not worked with warrants in a long, long time. Take away what you will, if anything.

    Anyway, if you do not know at what price the warrants are convertible, and when the conversion period, you are just guessing. You might also factor the dilution effect if all warrants in the series are converted to shares. And don't forget the warrant may convert in a ratio other than 1:1. Your mentioned multiplier of 4nnnnn suggests no hurry, imo.