Leverage
Indicator for
Warrants
One of the tools
to be used in
considering
which warrants
to buy is the
Leverage
Indicator (LI).
The LI should
never be used
alone but in
combination with
other factors it
can be highly
valuable in
selecting
undervalued
warrants.
So what is
the Leverage
Indicator?
Simply the LI is
the price of the
common shares
divided by the
price of the
warrant. For
example, if the
common shares
are selling for
$6 and the
warrant is
selling for
$1.25 the LI
would be 4.8 ($6
divided by
$1.25). Any
number in excess
of 2 is
interesting but
the large the
number the more
interesting the
warrant becomes.
Let's take
this in order of
significance:
1. The company
2. The remaining
life of the
warrants
3. Leverage
Calculation
4. The Leverage
Indicator
As you can see
the LI is only
one tool to be
used in your
selections of
warrants to buy.
We currently
display the
Leverage
Indicator in our
Warrant Database.
Look for the
link to Sort
by Expiration
Dates, then
look to the
right where we
have inserted
the Leverage
Indicator for
each warrant.
Characteristically,
as warrants get
closer to their
expiration date
they will
reflect a higher
LI because the
warrant is
declining in
value. You
should
therefore, focus
on companies
with a high LI
AND a
remaining life
of over 18
months or more,
preferably much
more.
A high LI all by
itself means
nothing and can
be very
deceiving. But
if you use the
LI in connection
with the other
tools above you
have the
potential for a
winning warrant.
If you don't
care for
warrants, fine,
but do not let
this stop you
from being a
subscriber. Only
24% of my
portfolio is
invested in
warrants, and
believe me, the
rest YOU NEED TO
KNOW ABOUT,
ASAP.
___________________
Warrants
Learning Center
- For those
needing more
information
about warrants
please don't
forget our
Learning Center.
Also, we have a
Live Chat
Feature on our
website, check
them out.
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For those
readers and
subscribers
unfamiliar with
all of our
services:
•
PreciousMetalsWarrants.com
provides an
online database
for all warrants
trading on the
natural resource
companies in the
United States
and Canada.
•
InsidersInsights.com
tracks the
buying and
selling of
corporate
insiders with a
focus on the
junior mining
and natural
resource
sectors. Buy and
Sell Alerts are
issued as deemed
relevant based
upon our
analysis.
There are many
great
opportunities
presented in
each of these
services and we
encourage you to
get on board
with us soon.
Dudley
Dudley Pierce Baker - Owner/Editor - Guadalajara/Ajijic, Mexico
Lorimer Wilson - Director of Marketing and Contributing Editor - Toronto, Canada
Bruce Ross - Webmaster and Administrative Assistant - Phoenix, USA
