Yeah, as you get closer to expiration, the time value keeps going away and the warrants will trade much more on just their intrinsic value and maybe just a teeny bit of time value.
But I would say a very important thing to keep in mind when trading warrants or options is this: Don't ever count your profits until you've taken them.
All the unrealized gains can disappear on the last day or two and turn into losses. You might have a strike price of $40 and the stock is trading at $42.50. On the final day that warrant might be trading at $2.60 ($2.50 in intrinsic value and just $.10 in time value). You may have paid only $.05 for these warrants many months ago when the stock price was much lower and now they're at $2.60. You're sitting on huge gains! You might go into the final day all giddy thinking if the stock moves up $2.50 today, these warrants are gonna be worth $5! That's a 100-bagger, baby! This is awesome!
Instead, on the final day the stock starts up for a little bit and then starts heading down and is trading all over the place. It ends up closing at $39.85. The warrants are worthless. Not only did you lose all your gains on your warrants, you also lost the amount you originally paid when you bought them. You went from being hugely in the green, to total loss and red.
On options expiration days in particular, there can be huge swings during the day as big money groups try to move the stock price toward this option strike price and then back down to this strike price, etc, buying and selling options along the way. You can make or lose a lot of money very fast.
I don't think I've ever exercised a warrant, even though I've traded them a bunch. Don't think I've ever held to the absolute last day. If you plan on holding them into the very last day, I would call your broker and make sure you know all the rules about how they handle things and what YOU will have to do if you plan to exercise.
