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Kinder Morgan, Inc. Message Board

  • been_there_done_that_twice been_there_done_that_twice Aug 19, 2014 3:21 PM Flag

    Anyone have any experience in option pricing vs. Warrant pricing

    My two remaining brain cells seem to remember they both use the same Black Scholes pricing model based on price, duration, and volatility.

    So here's what I see:

    January 2015 $40 calls - $2.47 X $2.61
    March 2015 $40 calls - $2.57 X $2.79
    January 2016 $40 calls - $3.20 X $3.30
    May2017 $40 warrants - $4.41 X $4.42

    What do you think is the best buy?

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    • been_there_done_that_twice been_there_done_that_twice Aug 19, 2014 4:57 PM Flag

      Here's what I think happened today with the warrant's. and think it's bullish

      Specialist/MM had a large order to buy. (1.8 million shares)

      The warrants were suppressed at the start of the day, going down while KMI was rising.

      Then, after the high for the day the warrants were allowed to run, and suddenly were up by half as much as the stock, (.12 vs. .24)

      Boom! Giant block gets crossed at the 4.42 range.

      Stock drifts back down.

      Specialist accumulates low, sells artificially high, then covers the rest all the way to $4.35 at day's end.

      Someone wanted in in a big way..

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