Emblem Corp EMMBF

RE:Warrants

[7Twiggy]

A warrant is a right to buy a share at a certain price over a period of time. You trade them the same way you trade shares or you can buy the mother share a few weeks before they expire for 1.75. For example if you are holding 1 EMC.wt you can buy 1 EMC wt. for 1.75 right up until December 2019. If the stock is selling for 4.00 at that time you can buy that 4.00 stock for 1.75. The EMC wt.A gives you the right to buy the stock at a price of 2.15 before the expiry date in November 2020. EMC warrants started trading Dec12,2016------1 EMC.wt can buy 1 share if EMC for 1.75 until Dec 2019. ( 2years ) Nov 21, 2017---- 1 EMC.wt.A can buy 1 share of EMC for 2.15 until Nov 2020. ( almost 3 years ) EMC traded at 1.72 yesterday but has a 52 week high of 4.60. The price of a EMC Warrant was around .50 yesterday. The warrant would have had a real value of 0 plus a time value of .50 = .50 The stock closed today at 1.85 and the warrant closed at .54. The warrant had a real value of ( 1.85 - 1.75 = .10 plus a time value of .54 - .10 = .44. ) If the stock moves to 2.50, the warrant will have a value of (2.50 -1.75 = .75 plus some time value. So if the time value is the same as today the warrant would be selling for .75 + .44 =1.19. The time value of a warrant usually decreases the closer we get to the expiry date. In the case of the two EMC warrants we have almost a two year and a three year runway. I have been trading warrants for years, but they can be very confusing at first. I started purchasing the Organigram warrants at .30 all the way up to the .80's. Cashed out most of them between the 1.50 to 2.20 levels. Picked them up before the stock hit the tail winds of the Trudeau election results and the marijuana promise. Remember putting a note on the Organigram board. The stock took off shortly after that. IMO we are now experiencing another gust from the provincial/ federal agreements of late. This stock could easily move back to it's 52 year high of 4.60, which would put the warrant value at 4.60 - 1.75 = 2.85 plus some time value. Now you see what I mean by leverage. You may want to buy a small position to get the feel of how warrants operate. They are not without risk. If the stock tanks and never gets above 1.75 and you are still holding at the expiry date you lose your bet. The good thing is they trade like a stock and you can get in and out quickly. One poster mentioned that there were not enough available for him to purchase. Check out the trading volumes on stockwatch. They look pretty liquid to me. By the way it is trading, it also looks like one of the original investors is selling some to hedge his/her bets. Stockwatch shows a 4.00 52 week high for the warrant. New management and expansion plans tells me we could easily break our 52 week high sooner than later. My examples all pertain to the EMC warrant but the logic is the same for the EMC warrant A.