The Complete Guide to The World’s Most Explosive Securities

The Complete Guide to The World's Most Explosive Securities

BY DAVID FOREST, EDITOR, STRATEGIC TRADER

Strategic Trader THE COMPLETE GUIDE TO THE WORLD'S MOST EXPLOSIVE SECURITIES

Dear Reader, They're the world's most explosive securities... They offer limited downside risk... And here at Strategic Trader, we have a proven system to pinpoint the best ones available... giving us a legitimate shot at 1,000% gains... or more. The mainstream term for this little-known way to make big money is "warrants." And in this comprehensive report, we'll show you:

? What warrants are... and why they're an essential tool for strategic traders, ? How they work, ? Our unique "T-U-V" system for finding the best in the world and, ? Three of the top warrants to buy today. Let's get started...

WARRANTS: THE WORLD'S MOST EXPLOSIVE SECURITIES

A stock warrant is a security that gives the holder the right (but not the obligation) to buy a share of stock at a fixed price at any time during a pre-determined period. In simpler terms, they're a better way to make more money than just buying a stock outright... and you can purchase them for much cheaper (more on that in a bit). Now, some people will compare warrants to options. And they're similar... But there are two major differences. One, warrants are issued by the company itself ? not a third party, like an exchange. The second difference is gains. Warrants are much more lucrative. Warrants are used to "sweeten the pot." They're an incentive created by the company to induce investment support at a time when support is thin. That can mean a tough time in the industry (think banking in 2010, offshore oil in 2017, or gold mining in 2015)... or it can be company-specific. Either way, they're an essential tool for traders that many investors don't even know exist. And here's the best part: Anyone with a brokerage account can buy them. No options agreement, no margin account, and no special accredited status is needed.

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Strategic Trader THE COMPLETE GUIDE TO THE WORLD'S MOST EXPLOSIVE SECURITIES

They can be bought and sold just like a stock. And they often produce far greater returns, offering leverage to a rising stock price. I'll tell you more on that in a bit. Before we get started, it's important to acknowledge we've seen plenty of volatility in the market lately. These warrants may have fallen recently along with the rest of the market. But we still have plenty of conviction that these are great investments. In fact, due to the recent volatility, now is a great time to pick them up at bargain prices. Now, there are a few key things to know about warrants, including:

? The "expiration date." Warrants expire at some point (like options do). They're only available for a limited amount of time. What we discovered is that you want to pick up warrants that have a long time to expire.

? The "exercise price," also known as the "strike price." This is the fixed price at which the company will sell shares to the warrant holder at any time before the expiration date.

? When a warrant is listed on an exchange, its ticker will often be the same as the company's common stock with a "W" or "WS" added to the end, sometimes separated by a period (.) or a forward slash (/). For example, NextDecade (NEXT) has warrants listed on the Nasdaq under the ticker NEXTW.

Now, some warrants are different and use the conventional symbol. For example, Hostess' stock ticker is TWNK. Its warrant ticker is TWNKW. Here are some screenshots from a TD Ameritrade account on the mobile app:

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Strategic Trader THE COMPLETE GUIDE TO THE WORLD'S MOST EXPLOSIVE SECURITIES

One of the easiest things to do is just type in the ticker for the underlying stock and the warrants should pop up. Then, you can click on the warrant to trade it:

Let's look at a quick example so you can see how warrants magnify returns on a stock.

HOW WARRANTS MAGNIFY OUR RETURNS

Take offshore supply vessel company Tidewater. The company suffered a major slowdown after the 2010 Deepwater Horizon explosion. When the offshore oil business slowed, the company had too many ships and too few customers. Its revenue fell to a level below what it needed to service the debt on those ships. Tidewater went bankrupt in a prearranged plan with its creditors. The creditors reduced their claims on the company from $2 billion to $440 million. That was a level the company could afford in light of the business slowdown. In exchange, the creditors would own stock in the reorganized Tidewater. Tidewater relisted its shares in July 2017 for $25. Creditors also had warrants to buy an additional share of the company's stock at $57 any time before July 2023. That's seven years from its relisting date. Some investors sold these warrants right away in the open market. I bought 1,000 of them for $1.44. I sold them in October 2018 for $5.25. That's a 260% gain.

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Strategic Trader THE COMPLETE GUIDE TO THE WORLD'S MOST EXPLOSIVE SECURITIES

But warrants aren't only issued in the resource market. Take the 2008 financial crisis, for instance. Bank stocks cratered. They had to raise capital immediately to shore up their balance sheets. Naturally, investors didn't want to touch bank stocks. To entice shareholders, the banks offered warrants, which sweetened the deal for investors. Here's a list of what happened to these warrants over their 10-year holding period. Notice some of them were up as much as 3,067%.

Underlying Company

Associated Bank Bank of America Boston Private Financial Cathay General

Ticker Symbol ASB BAC BPFH CATY

Warrant Ticker ASB/WS BAC/WS BPFHW CATYW

Strike Price $19.77 $12.66 $7.11 $20.59

Comerica First Financial JP Morgan M&T Bank PNC Financial Signature Bank Sun Trust Sun Trust Texas Capital Bancorp TCF Financial Wells Fargo Wintrust Financial Zions Bancorp

CMA FFBC JPM MTB PNC SBNY STI STI TCBI TCF WFC WTFC ZION

CMA/WS FFBCW JPM/WS MTB/WS PNC/WS SBNYW STI/WS A STI/WS B TCBIW TCF/WS WFC/WS WTFCW ZIONZ

$29.40 $12.20 $41.62 $73.86 $67.33 $30.21 $33.70 $44.15 $14.84 $16.93 $33.64 $22.82 $36.27

Warrant Issue Date

Expiration

Entry Price

12/1/11 11/21/18 $0.85

1/15/09 1/16/19 $1.96

11/21/08 11/21/18 $1.32

12/5/08 12/5/18 $5.51

Exit Price $7.11 $18.28 $9.44 $22.37

Warrant Return 736% 833% 615% 306%

11/14/08 12/23/08 10/28/08 12/10/12 12/31/08 12/12/08 12/31/08 11/14/08 1/16/09 11/14/08 10/28/08 12/19/08 11/14/08

11/14/18 12/23/18 10/28/18 12/23/18 12/31/18 12/12/18 12/31/18 11/14/18 1/16/19 11/14/18 10/28/18 12/19/18 11/14/18

$4.34 $3.65 $7.91 $25.95 $6.69 $10.00 $2.46 $1.25 $6.80 $0.91 $6.65 $9.00 $0.45

$61.75 $20.50 $75.00 101.64 $70.30 $85.50 $40.50 $23.19 $77.00 $9.10 $25.85 $66.62 $14.25

1323% 462% 848% 292% 951% 755% 1546% 1755% 1032% 900% 289% 640% 3067%

In fact, you could have purchased one SunTrust warrant for $1.30 plus a regular trading commission and sold it for $23.19... using any online brokerage account.

But it's not just the big gains that make warrants one of the best investments today...

WARRANTS LIMIT DOWNSIDE RISK

Warrants offer a way to profit without breaking the bank. It only takes a little bit of money to capitalize. Here's what I mean by that...

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