Of the current warrants (PNC,BAC,WFSL,FFBC,SBIB,WFC,SGNY,JPM,TCB,TCBI,COF,) are available to the public. A look up under the above symbols should show the warrants and the stock symbol for you brokerage platform. There is not a common symbol for warrants across the brokerage community.
The warrants offer from 3X leverage to over 10 X
This means if you bought a share of JPM for say 40 and you purchased the tarp warrant for 14, either would allow you to
profit from JPM increase in price. If JPM goes to 54 the warrant will go to apx 28. So in the 1st case the increase is 54-40 =14 divided by the original investment 40 = 35%ROI and the warrant's ROI for the same move is 100%
If you buy sbib's warrant for one dollar and the underlying stock goes up 3 dollars your warrant will go up aprox $3 dollars or a 300% ROI
In general I run a portfolio including all warrants, but with a higher weighting given to those with the best leverage and the individual strengths of the specific bank.
Note: There will be new Tarp warrants as more banks pay back the government loans. The Banks may buy all or part of these warrants, as has been the case so far. (Goldman Sacks bought all of them back, wfc about 2/3) |
