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Silver Wheaton Corp. Message Board

  • What is your opinion of the regular warrants versus the A warrants?

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    • The details give the answer, 102579 ...

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      SLW.WT - 87,412,500 warrants
      Terms: 5 warrants for 1 common share, Exercise price C$4.00, Expiry Aug 5 2009

      SLW.WT.A - 40,500,000 warrants
      Terms: 5 warrants for 1 common share, Exercise price: C$5.50, Expiry Nov 30, 2009

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      The regular warrants have more than double the liquidity and that alone makes them a better trading vehicle ... I'm sure you have noted that the "A" series has low volume ...

      At the current market price of the underlying stock of CAD $4.39, the regular warrants are "in the money" and this adds a bit of comfort to using them ...

      The warrant "time premium" represents a certain risk as it drops over time and so the smaller the time premium, the less risk involved and the closer it becomes a pure leverage play ... at present, the time premium on the regular series is CAD $0.32 but it is CAD $0.46 on the "A" series ...

      The "A" series do have a 4-month longer term but at this point it is of no consequence ...

      The "A" series, because of its lower price (a lower denominator in the math ratio), it will tend to give you a better "bank for the buck", that is a 10% rise in the underlying share will tend to give the regular warrants a 25% gain but the "A" series might experience a 40% gain ...

      There is also the unexplained intangible tendency for the "first" or "original" series in a group to acquire a stronger following and perform better ... call it "human nature" if you will and there is no reason for it, but it happens ...

      All in all, I would say that the regular series has a fairly clear advantage over the "A" series at this time ... but please, that is not to say the "A" series are no good and stay away, lol ... the "A" series are good, I just find that the regular series are better for me ...

      Regards ...

      jc

 
SLW
18.94May 28 4:01 PMEDT