Contracts that can be bought or sold and give the investor the right to buy the underlying stock at a set price are warrants. These are long term and can be held, sold or exercised.
The advantage is if the market rises, the contract can be traded for a premium above what the investor paid. Unlike traditional equity options, warrants offer a longer term feature. The risk is that they are normally priced out of the money (more than most options).
If the stock investor wishes to exercise the warrant they can (own the stock).
Warrants do not pay dividends. Once they are exercised into stock shares, a dividend is eligible to be paid to the stockholder.
- This course is designed as a beginner's guide for the warrants topic. Through this course, you will come to understand the basic concepts used by investors worldwide regarding warrants and factors that influence the price of a warrant. Additional, this course will give you the opportunity to learn how to determine whether a warrant is worth buying. As an introductory course about the warrants, it is presented in a simple and easy to use format, using examples and illustrations suitable for those with little to no prior knowledge or experience with the subject matter.
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