Installment warrants - newbie needs help

[tanco]

I own some installment warrants (wesiyh - may 2010)
Can someone explain why they aren't following the ordinary share back up as they were tracing the ordinary share prior to market correction.
thanks
tanco

 

[skyQuake]

Decaying time value.
The strike is $26.42, current WES is at 26.61
20c intrinsic value (ie its worth 20c if wes stays at this level till expiry)

 

[tanco]

Dont understand,completion payment is 28.90 in may 2010, as I understand it, my options are
1. make payment of 28.90
2. forfeit
3. rollover into new issue @ $???
4. sell on market before payment due
I currently hold these after rolling them over from the previous issue i.e. wesiyg to wesiyh.

 

[skyQuake]

Dont understand,completion payment is 28.90 in may 2010, as I understand it, my options are
1. make payment of 28.90
2. forfeit
3. rollover into new issue @ $???
4. sell on market before payment due
I currently hold these after rolling them over from the previous issue i.e. wesiyg to wesiyh.

IRESS has them as $26.42 CBA MAY10. (Probably adjusted for divvies)

So basically you pay 26.42 (or 28.90) to convert to a WES share.

 

[tanco]

IRESS has them as $26.42 CBA MAY10. (Probably adjusted for divvies)

So basically you pay 26.42 (or 28.90) to convert to a WES share.

appreciate your help, what is IRESS, and why do you think the price hasn't come back in line with the ord share (maybe opinions not allowed on forum) and when is a rollover cost usually available, sorry SO MANY questions.
thanks for taking the time to reply, obviously I've a lot to learn.

 

[skyQuake]

appreciate your help, what is IRESS, and why do you think the price hasn't come back in line with the ord share (maybe opinions not allowed on forum) and when is a rollover cost usually available, sorry SO MANY questions.
thanks for taking the time to reply, obviously I've a lot to learn.

Installment warrants are fairly complex, did you buy them yourself or were you advised by a financial planner?
IRESS is just a data feed platform.
Your installment warrant is basically an option. It allows you to purchase the WES share at a certain price. (in this case $26.40)
Right now WES shares are trading at $26.66
So your 'option' to purchase WES shares is worth 26c. However from now to expiry, WES shares can go up, which is the time value part (thats why its trading around $3.50).
The reason its not going up as hard as WES is the fact that its only slightly under the current price of WES.
If WES falls to say $25, no-one would want to purchase WES at the pre-determiend price of $26.40.

Heres the link of the PDS of your warrant. A fair read.
http://asx.com.au/PDF/07-001CBA.pdf

 

[LeftRightOut]

You need volatility on the underlying equity price to drag your warrant value up, time decay will kill it in an ever increasing rate until expiry.

 

[tanco]

Installment warrants are fairly complex, did you buy them yourself or were you advised by a financial planner?

I read the applicable material re inst warrants and bought some from the initial release and some on market. Thought I understood the detail but obviously not. Did quite well out of another parcel and the divies and tax helped also but with an average 1st cost of 5.00 and a final installment of 26.60 I'll be short of break even, the problem being funding the final installment.