Well, that is what I have been thinking about toda
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Posted On: 05/22/2019 9:19:11 PM
Well, that is what I have been thinking about today: the warrants vs shares.
It might be to one advantage to sell some shares and buy warrants.
I tried it out today on a small scale.
I sold 84 shares today (mainly to give me a round number of shares) at 1.75 and bought 200 warrants at .66 and .69.
It was kind of strange. There was zero volume on warrants up to the time I thought about making this trade. As soon as I started to write the order, all of a sudden a big barrage of warrants trade went through at around .72. I put in my order at .72 and got the warrants filled at .66 & .69!. Surprised me!
My thought on this are compound.
1. The Wimpy theory: I'd gladly pay you Tuesday for a hamburger today.
That is, I gladly pay in the future for 200 shares for the cost of 84 shares today.
2. By selling 84 shares today, I create a tax loss on those shares for this year for exchange to get 200 shares in the future. Hopefully there is no hidden IRS rule on this???
3. I also got a little cash left over from this trade to use to buy other things. And that cash is really non taxable (in a cash account) because it was in a losing trade (assuming you paid more for them). In an IRA, it won't matter. Just think, if you sold 100 shares for 1.75 you would get $175. You buy 100 warrants for $75 to replace the shares you sold. So you get $100 in cash to do with as you please. Of course you do have to exercise them down the road. However, god forbid, if VERB was to go bankrupt and it goes to zero OR you sold what you had left for pennies, you at least would not have lost all your investment money because you squeezed out that $100!!!
See what you think about all day after binge-watching The OA for three days straight.
It might be to one advantage to sell some shares and buy warrants.
I tried it out today on a small scale.
I sold 84 shares today (mainly to give me a round number of shares) at 1.75 and bought 200 warrants at .66 and .69.
It was kind of strange. There was zero volume on warrants up to the time I thought about making this trade. As soon as I started to write the order, all of a sudden a big barrage of warrants trade went through at around .72. I put in my order at .72 and got the warrants filled at .66 & .69!. Surprised me!
My thought on this are compound.
1. The Wimpy theory: I'd gladly pay you Tuesday for a hamburger today.
That is, I gladly pay in the future for 200 shares for the cost of 84 shares today.
2. By selling 84 shares today, I create a tax loss on those shares for this year for exchange to get 200 shares in the future. Hopefully there is no hidden IRS rule on this???
3. I also got a little cash left over from this trade to use to buy other things. And that cash is really non taxable (in a cash account) because it was in a losing trade (assuming you paid more for them). In an IRA, it won't matter. Just think, if you sold 100 shares for 1.75 you would get $175. You buy 100 warrants for $75 to replace the shares you sold. So you get $100 in cash to do with as you please. Of course you do have to exercise them down the road. However, god forbid, if VERB was to go bankrupt and it goes to zero OR you sold what you had left for pennies, you at least would not have lost all your investment money because you squeezed out that $100!!!
See what you think about all day after binge-watching The OA for three days straight.
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