November 12, 2015
One of the most overlooked investment vehicles in the markets today are stock warrants.
While stock warrants actually started trading as early as the 1920s investors have largely ignored them since the early 1980s.
Stock options and the Chicago Board Option Exchange (CBOE.com) started up around 1980 with much advertising and of course, brokerage firms encourage and promote stock options because of their short lives and thus, more commissions.
Contrarily, stock warrants are more of an investment with expiration dates frequently up to and exceeding 5 years. Thus, like common shares, there are less commissions being generated for the brokerage firms.
Basic Definition Of Stock Warrants
Stock warrants give the holder the right, but not the obligation, to purchase the underlying common shares at a specific price and expiring on a specific date in the future. Stock warrants are usually issued in connection with a stock offering or a private placement and are frequently the icing on the cake to get the deal done, i.e., equity kicker or additional incentive.
Most stock warrants will never trade, but if there are stock warrants trading on any companies you are interested in buying then believe me, you need to know the complete details. Those stock warrants which trade offer:
- More potential upside leverage
- Lower entry price than the common shares, thus reducing your ultimate risk
In our Exclusive Stock Warrants Database, we provide the complete details on over 200 stock warrants trading in the U.S. and Canada for all industries and sectors from resources to bio-tech, pharma, financial, restaurants, blank-check companies, etc.
If you need more information you will find it in our Learning Center.
I welcome you to Join Us Soon to get our current rating on these and all stock warrants trading.
Dudley Pierce Baker