re: HDRWMB are they expensive ... sitting duck Hmmm... sitting...

re: HDRWMB are they expensive ... sitting duck Hmmm... sitting duck ... the short answer is yes.

See my post late July of BSOPM tech analysis of HDR/HDRWMA which was critical (supported by the maths) of Macquarie's HDRWMA offering which ramped I/VOL to a rude 120% ... a simple grab for cash on their part.

This explains why you are now questioning the current premium levels.

From memory the maths demonstrated marginal leverage at these levels which translates into unecessary risk ... good for Macquarie but little for anyone else.

Others have used a mythical 60%(?) for want of a figure which is a no-brainer and only succeeds in confusing those concerned and concealing the fact that anyone would need a very good reason to be bothered with these Warrants.

Also from memory (I have a good one) HDR at the time of my post was around $0.72 and the HDRWMA was $0.10.

HDR subsequently, went to $0.90 (+25%) and HDRWMA to $0.14 (+40%) which translates into leverage of 1.60.

This equates (approx) with my BSOPM maths which calculated at (I/Vol of 120%) leverage of 1.70.

This represents big premium risk (100%) and marginal return ... (HDRWMA strike $0.75 and expiry 28/11/02) given that HDR has traded below this level ($0.73) this month.

Cheers ....



This is only my view ... read the red stuff.