Dangers and benefits of buying stock warrants

Discussion in 'Options' started by john7722, Jun 20, 2022.

  1. john7722

    john7722

    When I go into by IBKR account I can see there are also warrants for many stocks with longer expiration then what options offer.
    Sometimes you can even see 2026 or 2027 exp which seems much better deal then 2024 exp options. I would not mind holding until expiration .

    What are potential problems with those kind of warrants? Can they be bought by issuer before expiration without my consent?

    Thank you for your help.
     
  2. zdreg

    zdreg

    Possibly. Check the prospectus They are likely to be thinly traded.
     
  3. ajacobson

    ajacobson

    Rarely available to sell short so they can be way overpriced. Retail can't generally arb them and trading the actual option against may be considered as two trades. If you have the time and capital you can trade them against converts and those numbers can be very attractive.
     
    Gambit and zdreg like this.
  4. john7722

    john7722

    What if you are not interested in trading them but you want to buy them as a long term investment . How do they compere to LEAPS ? Doesn't it look like a better investment compered to leaps?
     
  5. ajacobson

    ajacobson

    Leaps are superior because they can be arbed.
     
  6. nah. wrong.

    they are often available to short even when the stonk isn't

    if anything they are cheap compared to listed options, with the caveat that they might have early call terms that f you up.

    never trust what you read on the internet, unless its posted by me
     

  7. arbed ? arbed means guaranteed profit.

    you must be a very wealthy man then
     
  8. KISS... no danger to any kind of "option/warrant/LEAP buying" beyond the loss of premium paid.
    "Selling" options.. is an entirely different can of worms.
     
  9. speaking of warrants, the RDBX warrant has been destroyed vs the stonk .


    buyers smoked