Issue link: http://resourceworld.uberflip.com/i/855838
A U G U S T / S E P T E M B E R 2 0 1 7 www.resourceworld.com 31 market or trending can greatly determine your level of success. If you will, think about as a child getting on and off of a merry-go-round. When to jump on and when to jump off can be challenging and scary. Likewise, your timing with invest- ments as to when to enter and exit your positions with warrants will determine your level of success. Many of us investing in the resource sector believe that gold and silver bot- tomed in 2015 and the next few years should provide a very favourable climate for further advances. If we are correct in our assessment, investing in companies with good management, good properties and cash in the bank should see substan- tial gains. Long-term warrants trading on those shares should be of great interest to those investors looking to maximize/lever- age those opportunities. There is no reason to believe that the price of a warrant is going to rise without an increase in the price of the stock (of which the warrant is an option to buy). The investor chooses to purchase the warrant in lieu of the stock of a company because he anticipates that the price of the warrant will rise more rapidly than the price of the stock. The warrant then offers the investor a greater return than the stock, that is, the warrant offers greater leverage. But such potential leverage requires that the price of the stock will rise, and hence, the com- pany itself must have potential for growth. As I mentioned previously, the decision to allow warrants to trade or not lies solely with the company's management and/or their financial advisors. For those warrants which are trading you can buy and sell them just like you would shares. A freely tradable warrant on a Canadian company will have ".WT" in its symbol. In the US, a trading warrant will have a symbol ending in "W" or ".WS" on the NYSE, NASDAQ, AMEX or OTC markets. If you find a five-year warrant trading on a company you like, you need to pay attention and thoroughly investigate for this could just be you next 10-bagger. Fact is, there have been many five-year war- rants issued in the last 12 months. While the focus on stock warrants is on the potential of their upside performance, we must inform investors of the risk with stock warrants. Warrants, like call options and LEAPS, have an expiration date. If the common shares are selling below the exer- cise price of the warrants on expiration day, the warrants will expire worthless. Investors should carefully monitor their positions in stock warrants and not go to sleep and let the warrants expire worthless. n Dudley Pierce Baker is the founder and edi- tor of CommonStockWarrants.com offering subscribers the only database of all stock warrants trading in the United States and Canada. Neither Dudley Pierce Baker nor CommonStockWarrants.com is a financial advisor thus investors should consult with their own financial advisors before making any investment decisions. If you visit my web- site you can receive a free copy of "The Stock Warrant Handbook", Your Personal Guide to Trading Stock Warrants, which will give you much more information.