Nemaska Lithium Inc NMKEF

💰💰💰Trading near Warrants expiry 💰💰💰

[Amor123]

A stock with an expiring warrant often represents a great low risk / high probability buying opportunity. A typical pattern for a stock with an expiring warrant is a drop in price as the warrant expiration nears and then a rebound, or move up, immediately after the expiration. Ive traded a large number of these expirations over the years and, in the vast majority, there is an increase in the price of the common stock once the warrant expires. The warrant expiration puts pressure on the stock because of the arbitrage that is taking place around the warrant. Large institutions are generally buying the warrant and shorting the stock into the expiration. They then cover their short position with the common shares received from exercising the warrants. As pressure from short selling abates after the warrant expires, the common stock generally moves to the upside. Think of it as holding a beach ball under water. When you let go of the ball, it pops out of the water. Generally a stock has this same reaction immediately after being let go by the short sellers/arbitrageurs. While this is the general pattern, there are five ways you can greatly increase your chances of buying a stock that will pop after the warrant expiration. If your stock meets these five criteria, even if there is no pop, it is very unlikely will sink any further short term. You can sell the position flat (neither losing nor making money) or, at worse, for a very small loss.