lilsatoshi

TGOD.WS ARE 3X UNDERVALUED TGOD.WT ARE 13X OVERVALUED

Long
TSX:TGOD   THE GREEN ORGANIC DUTCHMAN HOLDINGS LTD
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

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