shares or warrants, page-3

Thorminator

Its all about leverage and time. Long term investors (ie more than 2 years would probably purchase shares but even then not necessarily in the initial stages)

Here is my personal example:

I purchased 500K warrants (options) average 5c. Shares were then 17-19c. For the same money I would have bought only 130K shares. Leverage 4:1

At yesterdays close, my investment would show 110% profit in shares as opposed to over 500% in warrants. While there is still plenty of time to exercise the warrants, there is no risk. Short term investors can get far better leverage for their money at those differences. However, as the sp increases the difference in the two prices converges.

To purchase shares as opposed to warrants on today's price would not create as big a profit difference as the relative leverage is now 4:3 instead of 4:1

Of course some sell their options and convert to shares at no cost to their portfolio when they are able to take advantage of volatile sp fluctuations.

At the outset my THR portfolio was entirely made up of THRO. Today it sits at THRO:THR 1:4 and I have used the recent market fluctuations to make the switch at no cost.

That is one reason that people choose warrants over shares - I know there will probably be other reasons. Hope this helps.