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Re: El_Jefe42 post# 50046

Monday, 04/24/2017 1:01:08 AM

Monday, April 24, 2017 1:01:08 AM

Post# of 81999
On the other hand, if I bought a share at $3 and sold it for $10, I would make $7.

If I bought a warrant for $1 and exercised the warrant for $4 (+ fee), I would have paid around $5.30 for a share and make $4.70.

That's the price of hedging your bet. You clearly don't "make more" on warrants. You lose less.

Seems fair to me. The only addition I'd make is that the breakeven between the common and warrants in that scenario is $6. Above $6 the gain on the warrants far exceeds the common.