Part 6/10:

While warrants offer the chance for substantial gains, they are inherently risky. If the stock remains below the exercise price at expiry, the warrants become worthless, leading to potential total loss of the invested capital.

Jay cautions investors to do thorough due diligence on each company's warrant terms. Some companies may force early exercise under certain conditions, and understanding the expiry dates, exercise prices, and specific warrant clauses is vital.

Practical Guide: How to Trade Warrants

Trading warrants is straightforward and similar to buying stocks through a brokerage account:

• Buying Warrants: You specify your limit price and place purchase orders just like stock trades.