Low levels of volatility implied by a Treasury auction of Capital One warrants last week could indicate a lower than expected price for JP Morgan’s warrants, say market observers.
An auction is set to dispose of warrants to buy 88.4 million shares of the bank’s common stock on December 10. The warrants are held under the government’s Troubled Assets Relief Program (Tarp). In recent months, analysts have placed the total value of the warrants at approximately $1 billion.
Even if the auction settl
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