Serious Q about warrant. Only normal posters reply please Tia
I wouldn’t refer to myself as particularly smart but...
isnt there a flaw in buying “only” warrants that have an expiration even if there is no acc clause?
E.g. Person cash straps themselves and buys 10k worth of warrants (because they could get 2:1 vs a share) that exp in 2020 but short of a lottery win will NOT have the funds needed to exercise the 5k ($2 warrant for argument sake) so will have no choice but to sell their position and sell at warrant price?
Unless the warrant price should be the total difference between strike price and share price. If that were the case then why would anyone buy an actual share?
Or if warrants exp in Jan 2020 isn’t it possible to have a warrant selloff which would cause it to dip just so that those who can’t afford strike price won’t foefeit their warrants?
I know someone posted before about a gap so if it could be explained I’d appreciate. Learning as I go and not entirely dumb. :)
I own many shares and only a few warrants but I’d like to understand the process :)
Lisa