Marcus, warrants are primarily priced on 2 factors. Time value and Volitility. K has traded close to $30.00 in the last 52 weeks, so it gets high rating for volitility.

The time value is 5 years, (pretty good) so the question you have to ask yourself is do you think this stock has a chance of getting to $32.00 in the next five years? If they answer is yes then what are you willing to pay for that bet. Right now that bet costs you about $3.00.

If the SP of K gets to say $30.00 in the next 12 months, the warrant would be selling for about $10.00 as it has 4years remaining to exercise.

Seems to me a good trade would be to sell K on the rally. then replace those shares with an equivalent amount of warrants on the dip. One way to lighten up, but still keep some exposure. Comments?

ebear