# Gearing and the ASX 200 index



## Seneca60BC (8 July 2008)

Hi all

I understand that as a rough guide, one can calculate the approximate change in the share price and the corresponding change in the warrant price using the gearing value - how does one calculate the approximate change in the warrant price for a ASX200 index warrant.

Say, if the ASX200 went up by 60 points, what is the expected change in the price of the warrant, all else equal.

thanks


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## Trembling Hand (8 July 2008)

*Re: Gearing and the ASX200 index*

the company that wrote the warrant will normally publish a daily sheet with price guides. have a look at their websites.


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## Seneca60BC (8 July 2008)

*Re: Gearing and the ASX200 index*

But i have not seen any for indicies.


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## wayneL (8 July 2008)

*Re: Gearing and the ASX200 index*



Seneca60BC said:


> Hi all
> 
> I understand that as a rough guide, one can calculate the approximate change in the share price and the corresponding change in the warrant price using the gearing value - how does one calculate the approximate change in the warrant price for a ASX200 index warrant.
> 
> ...



It depends on a lot of things; read this thread https://www.aussiestockforums.com/forums/showthread.php?t=1366 

As a warrant behaves like an option, there are some answers there. But be aware that conversion ratios, if any, will affect things.


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## GreatPig (10 July 2008)

*Re: Gearing and the ASX200 index*

The Black-Scholes option pricing formula seems to work pretty well with index warrants (except the ABN Amro minis which are more like CFDs). The conversion ratio is usually 200 (or 0.005, depending on which way you look at it).

GP


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