Showing posts with label penny warrants. Show all posts
Showing posts with label penny warrants. Show all posts

Tuesday 3 November 2020

Do not buy company warrants and structured warrants.

The price of warrant closely follows the price of its parent stock.

Warrant has a lifespan which is very short and no dividend is distributed to its owners.

They are mainly for short term speculation.

Do not buy company warrants and structured warrants.

Those with warrants given out "free of charge" as a result of rights issue subscription or bonus issues, their chances of winning are next to none if held to exercise date.

One of the most foolish ways is to squander your hard-earned money on speculative warrants because short-term speculation is an effective way to part with your hard-earned money.

Thursday 10 September 2015

Penny Warrants are very risky.

Warrants with only 1 - 2 weeks left to maturity and over 10% out-of-the-money (OTM) are called penny warrants.

They are very risky and their odds are low.  The reasons are as follows:

1.  The bid/ask spreads of penny warrants are rather wide.

2.  Penny warrants have a very high rate of time decay.

3.  It is easy to lose money with penny warrants.

4.  Penny warrants may be not that price sensitive.  

5.  Penny warrants can hardly edge up but easily plummet.