RE:RE:RE:When to hold Warrants vs Commons? $6.54 key number.Thanks Husky4000... I was just making a extreme crazy example, of a highly unlikely event of Warrants going to zero or near zero. That's why I said SHORTS manipulating the share price.
My point is, after commons goes below $6.54, the warrants share price is easily subject to manipulation. Above $6.54 the warrants have the option to convert, so there insurance if for some reason the warrant share price goes waco....like a Game Stop but in reverse.
Below $6.54 commons, warrant price could be manipulated, IMHO.
I consider the warrants a little bit like playing the futures market (ie 2x ETFs), where the price is subject to considerable manipulation, and "Time value" is difficult to know exactly, and you have less control. As such, I try to say away. But, I have them now, so I trying to understand... Thanks for your input.
Given my experience with Shorting, 2xETF, Husky Preferreds, 1x commodity ETF, ...etc... over the years.... it wouldn't surprise me if warrant prices could be manipulated as I said.
Believe it not, I even had shares disappear from my account!!! No notice or nothing, just all of a sudden they are gone. Granted, the company went under restructuring or bankruptcy or somehthing.... but still, I should have been notified.
All just my opinion/view/thinking/guessing
Husky4000 wrote:
You are starting to understand but not quite right. If commons trade at 8, warrants are "in the money" for 1.46. They are at least worth 1.46. But, they will carry another amount, representing a premium for the time left. The more time you have left the more it is. Actually it is around 1.50. So,all else being equal, if commons go to 8 tommorow, WTS would be1.46 PLUS 1.44...2.90$ Still no point to converting. So, for example, you have 1000 warrants worth 2900$...would you take 6540$ to buy 8000 worth of commons??? That's a profit of 1460. And 2900 is greater than 1460... Please, I suggest you read a bit on pricing of long term options.