By David Forest, editor, Strategic Trader
I’m not a trader. I’m more of an investor… a speculator.
But what I do know is that trading is a game of inches.
Where we ruthlessly fight for every penny, every percentage point. Where exact buying and selling can make the difference between fat profits and crushing losses.
It’s for that reason that I (Dave Forest) am always looking for a way to give regular investors an edge in the market.
It took a while… a lot of research… analysis… and “real world” experience. But eventually, my team and I found it.
I’ll explain what it is and how it can help you with your trading and speculating today…
If this is your first time reading the Dispatch, welcome. If you’ve been here before, welcome back.
At the Dispatch we have two goals:
To introduce you to the most important investing themes of the day, and
To show you how to profit from them.
We do this by showcasing ideas from me and our other in-house investing experts, such as Nick Giambruno, and the founder of our business, Doug Casey.
Today, we’ll focus on what I consider to be one of the best ideas we’ve ever uncovered at Casey Research – although I’ll admit, I’m a little biased…
The “Secret” Market That’s Out of Bounds for Most of Wall Street
Did you know there’s a “secret” segment of the trading world?
One where it’s infinitely easier to find attractive pricing… spots where the market is overlooking obvious value, leaving big profits spread across the table, almost dripping off the edges?
The secret is called warrants. (Regular Dispatch readers will be familiar with this idea.)
In most ways, warrants are like call options. They give you the right, but not the obligation, to buy a stock at a set price for a given period of time.
But many warrants are actually easier to buy than options.
They trade on major exchanges like the NYSE and Nasdaq. You can find them easily in your brokerage account… if you know where to look. And you don’t need special permission from your brokerage firm to trade them – unlike with options.
But there’s one critical difference between options and warrants. Warrants are issued directly by the company.
That means there are far fewer warrants than options. Now, having fewer choices may seem like a negative. But in this case, it’s a positive.
An option on a major stock might trade millions of dollars of daily volume. Whereas many warrants will trade just tens or hundreds of thousands.
That brings me to the positive aspect of this. That low volume makes warrants too small for major players like hedge funds or algorithmic traders.
Those massive investors need to move millions, or even billions, to make it worth their while and for them to make a profit. So warrants simply aren’t worth it for them.
That’s why warrants are dream investment vehicles for individual investors. They’re too small for the big guys… but they’re a perfect way for regular investors (like you) to grow individual wealth.
Let me give you some examples…
$250 Becomes $12k… $500 Becomes $24k
In my Strategic Trader service, we recommended one warrant that gained 4,942%. In dollar terms, that means if you put $500 into that trade, you’d have walked away with $24,210.
This is precisely why warrants are so, so powerful… you place small “bets,” which give you the chance to make big gains.
Even if you’d put just $250 into the warrant I’ve just mentioned, you’d be up over $12,000. And what was the risk? Just $250. Not a cent more.
To make over $24,000, it was just by putting $500 at risk… and not a cent more.
Of course, not every warrant explodes into a 49-bagger. I recently closed out another warrant play for a solid 393%. And another for 2,805%. As I write, I have five other open positions in my Strategic Trader advisory that are up more than 100%.
Full disclosure: I’ve got a handful of positions that are currently down. That happens. But remember, with these plays you only have to make small investments – $250, $500, or $1,000.
So if you’re down 20%, 30%, or even 50% in the short-term, ask yourself this: Is that so bad when there’s the potential for that to turn around into one of the big wins I’ve mentioned above?
Besides, I’m more than happy to wait for those down positions to make a comeback.
Now, if you’ve never traded warrants before, I don’t blame you if you think this sounds unbelievable.
The bottom line on this is that things are moving fast in the world’s economy. Mostly, I mean inflation. As an investor, you can’t afford to sit back and hope that your current portfolio will keep pace with inflation, let alone stay ahead of it.
It’s for that reason you owe it to yourself to check out what warrants have to offer… and how you can gain access to one of the best risk-reward investment ideas on the market today.
Think about it. Where else in stocks do you get the chance to turn just $500 into more than $24,000? If you can come up with a better answer than warrants, I’d love to hear about it.
If not, check out more details on how it all works here.
Keep walking the path,
Editor, Strategic Trader