TGOD.WT ARE 13X OVERVALUED
TGOD.WS ARE 3X UNDERVALUED
There are a few different variables one can use to price Warrants, most important ones being Intrinsic Value & Time Premium.
INTRINSIC VALUE (IV) = Share price - Strike price
TGOD.WS (IV) = .5 - 1 = -.50$
TGOD.WT (IV) = .5 - 3 = -2.50$
The intrinsic value for both is out of the money but they trade above 0$ this is because we are paying for the Time Premium (TP), so lets calculate what thats costing.
TIME PREMIUM (TP) = IV + Market Val of Warrants {use absolute value for IV if out of money}
TGOD.WS (TP) = .5 + .085 = .585$ (for 3 years)
TGOD.WT (TP) = 2.5 + .08 = 2.58$ (for 1 year)
Now lets calculate the premium we are paying annually
TGOD.WS = .585/3 = .195$
TGOD.WT = 2.58/1 = 2.58$
2.58/.195 = 13
Simply put, we are paying 13x more for the same time premium when buying WT warrants
TGOD.WS ARE 3X UNDERVALUED
There are a few different variables one can use to price Warrants, most important ones being Intrinsic Value & Time Premium.
INTRINSIC VALUE (IV) = Share price - Strike price
TGOD.WS (IV) = .5 - 1 = -.50$
TGOD.WT (IV) = .5 - 3 = -2.50$
The intrinsic value for both is out of the money but they trade above 0$ this is because we are paying for the Time Premium (TP), so lets calculate what thats costing.
TIME PREMIUM (TP) = IV + Market Val of Warrants {use absolute value for IV if out of money}
TGOD.WS (TP) = .5 + .085 = .585$ (for 3 years)
TGOD.WT (TP) = 2.5 + .08 = 2.58$ (for 1 year)
Now lets calculate the premium we are paying annually
TGOD.WS = .585/3 = .195$
TGOD.WT = 2.58/1 = 2.58$
2.58/.195 = 13
Simply put, we are paying 13x more for the same time premium when buying WT warrants