How To Buy Shares and Stock Warrants On Canadian Companies
January 31, 2017
By Dudley Pierce Baker
Most of the readers here are interested in the resource sector which includes the junior mining companies as well as oil and gas companies.
My opinion is that we will see a very positive tone for the next few years for gold, silver and copper and look for substantially higher prices with many great opportunities for investors.
Since most of these resource companies are Canadian companies the issue for some investors is ‘how to buy the Canadian shares or perhaps the stock warrants on Canadian companies?”
Also, I frequently receive emails asking if the traditional brokerage firms will trade the warrants?
Allow me to clarify this situation for all investors:
You are probably asking what is the big deal?
Canadians can easily purchase the shares and stock warrants trading on Canadian companies through their brokers, no problems here.
Most of the Canadian shares and about 60% of the stock warrants trading on the Canadian companies have been assigned U.S. symbols which facilitates the trading in the U.S.
Most Canadian companies frankly do not really care if their stock warrants trade and it is up to a U.S. market maker to establish a market (not the company) and assign a symbol for trading.
The stock warrants on the Canadian companies are not and will not be registered in the United States, however, this is not a problem. Investors are encouraged to only trade/invest in the warrants with no intent of ever exercising them.
Brokers in the U.S. can easily trade those warrants or shares which have been assigned a U.S. symbol, a 5 alpha symbol ending in F for foreign.
The issue then becomes, ‘what about the other 40% of the warrants without a U.S. symbol’?
This is where your brokerage firm comes into to play.
The reference below of specific brokerage firms is not meant to be a recommendation, thereof, but merely to clarify and assist investors.
Some firms like Interactive Brokers allow for trading virtually worldwide and the orders for the Canadian stock warrants can be easily entered online.
PennTrade is now back in business and using RBC as their clearing firm thus allowing U.S. investors the ability to purchase the Canadian shares and stock warrants.
Fidelity Investments offers the ability to trade Canadian warrants through their international platform if you meet those requirements.
Other firms, TD Ameritrade, Scottrade and others may be more problematic. It is my understanding that if you provide your broker with the cusip number (which we provide in our databases) for the stock warrant, they ‘may be’ able to do the trade for you, but no guarantees.
I am constantly looking for other brokerage firms which will allow for trading in the Canadian stock warrants, at reasonable commissions.
Each investor must make the decision as to whether it may be necessary to open a new brokerage account in order to be able to easily purchase any of the Canadian warrants. In my opinion, if necessary for you, it will be well worth the time and effort so that you have the opportunity to trade the warrants which cost on average, less than half of the price of the common shares and offer substantially higher returns of over 2:1.
Disclosure: Neither Dudley Pierce Baker nor CommonStockWarrants.com is an investment advisor and any reference to specific securities does not constitute a recommendation thereof. CommonStockWarrants.com is an online newsletter providing complete details on all stock warrants trading in the United States and Canada. The information and opinions expressed should not be construed as a solicitation to buy any securities mentioned in this service.