RE:RE:RE:RE:Warrants - Why are they trading for more then the stock?I pointed out last week that the pricing on these was irrational (contrary to a previous poster who argued that "the market" could not be naive...). These warrants currently have negative leverage, meaning that the shares will always outperform the warrants no matter how high the shares go. If the shares go to a million dollars, you still end up being considerably better off than if you had deployed the same amount of capital into the warrants. There is no mathematical way that warrants can outperform shares if the warrants cost more than the shares. It seems that many people don't understand that it will take 20 warrants for the privilege of purchasing one share at $3.00, but this is crystal clear from the financial filings readily available on SEDAR. I too was confused about this initially, and I thought the warrants were a screaming buy for a while. Can the warrants still go up in value? Sure, just like worthless dotcom companies went up when people didn't understand them.
If you want some warrants with serious leverage, check out West African Resources. I also like the Dalradian warrants. I am not seeing much else in the warrant world that is very appealing right now.