April Idea of the Month: Betting on 2018
by Travis Johnson, Stock Gumshoe | April 12, 2013 1:01 am
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Source URL: https://www.stockgumshoe.com/2013/04/april-idea-of-the-month-betting-on-2018/
P.S. I should say this every time I write about warrants, but sometimes it slips my mind: Warrants require an active decision before the expiration date (exercise or sell the warrant, usually).
Options contracts that are in the money at expiration will be automatically exercised by most brokers unless you tell them differently, so they’ll capture your gains by, for example, exercising the option and buying the underlying stock if it’s a call option.
But a warrant, even one that is in the money and valuable, can expire and leave you with nothing if you do nothing. Presumably your broker would make an effort to get your attention, but don’t count on someone else tracking them for you. That’s doubly true for foreign warrants if you trade them on the pink sheets or something, but I’d keep it in mind for even these US-listed and fairly major warrants.
Hi Travis,
With respect to Citigroup (WTA) warrants, the strike price has been adjusted for the reverse split (1:10) and is listed in the table as 10.61 (from the original strike price of 106.1). Should not the price of the warrants also be adjusted to reflect that you would need to buy 10 warrants to buy 1 share? In other words, the real cost of warrants per share of C-WTA is around $5.40 ($0.54 looks awfully cheap).
R
Yes, the C warrants would need to be adjusted for the share consolidation.
Thank you Travis:
As a mediocre investor who is worrried about retirement, I thank you for all the advice and explanation you consistently put out. your advice has rewarded me well thus far.
Thank you again, Peyman.
Travis,
I meant to mention a while back but forgot to, the AIG Warrants are under the symbol AIGWS or AIG.WS or AIG/WS but under AIG-WT. According to their web site they are AIGWS.
Thanks for all the wonderful info,
/* Phil */
correction: add “but not” in front of ‘under’ tnx
Hi Travis,
I have 2 questions: How do I find out the ticker symbol for PNC warrants. When I type in PNC-WT, it says invalid symbol at Trowe price website.
2) Are you currently researching any companies in the Natural Gas vehicles area like WestPort innovations? I looked up a company “Quantum Fuel Systems Technologies Worldwide Inc. (QTWW)” . What is your take on this? Your input is greatly appreciated.
Thanks
RP
You can typically find them by using the ticker search at your broker — I’ve seen it as PNC.WT and PNC-WT , PNCWT, PNCWS, PNC.WS and PNC/WS. There isn’t any real standardization across brokers for the warrant tickers. Careful, PNC and most other banks also have preferred shares trading, those are usually designated by a P somewhere after the ticker.
I do look at the nat gas stocks on occasion, and have covered Westport many times over the years — they’ve been a serial “over-promiser” for a long time so I’m cautious. The nat gas infrastructure plays like CBI or other construction/engineering firms, or the pipelines, are generally more reliably profitable. Don’t know Quantum, but they are teensy weensy and have debt and no profits yet (though analysts expect revenue growth), so expect a wild ride if you get involved.
Good article. Thanks.