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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers -- Ignore unavailable to you. Want to Upgrade?

To: Postman who wrote (5764)	2/1/2006 4:13:51 PM
From: koan	Read Replies (2) \| Respond to of 78416

Warrants can be trouble and I ahve mixed emotions about even talking about them as they can be very dangerous. In 1987 I foolishly put many people into Pegasus wts at .30. They went to $5.25 and amny people including me made a bundle. But I had trouble explaining them to even the most educated e.g. doctors and lawyers (well lawyers havingn trouble is understandable-lol). Afterwards some people kept fooling with them and made mistakes. One should always be cautious when buying wts and realize they can lose everything. They should also make sur they understand them. What is interesting is that wts can actually be both a more conservative play than stocks and yet provide upside leverage. Yes alice free lunches do exist-lol: Here is how. Say you buy SLW reg wts for $1 (5 for 1) strike of $4. Stock is $9. One has almost a 2 to 1 leverage on the upside. Now say the stock plummets $5. If you owned the stock you would lose $5, but the wts would probably only drop by around .50 to .70, so you would actually lose less with the wts. Or take the SLW B wts when they were $1 to 1.60. Stock was about $8. $10 strike - 5 years to go. If the stock went bankrupt one woul donly lose the $1 to 1.60, but $8 if one owned the stock. wts are tricky, but well worth learning about. IMO-lol