There are 400 tradeable warrants available on US markets.
They’re as easy to buy as any stock… but you shouldn’t touch 365 of them.
Today, I (Chris Reilly) talk to new RiskHedge warrants expert John Pangere about his strict system that pinpoints only the most potentially profitable warrants.
[The doors are still open to John’s Strategic Trader advisory. Click here for details.]
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Chris Reilly: John, you’ve said before you consider any warrant trade, you run it through your “T-U-V” system. What does that stand for?
John Pangere: Let me first say, without a system, you’re just guessing.
T-U-V forces me to look at three specific things before I get interested in a warrant’s upside.
And if one of them fails, I move on.
Chris: Let’s start with the T. What exactly are you looking for?
John: T stands for time.
Even though warrants trade like stocks, every warrant has an expiration date.
I’ve found the sweet spot is typically three to five years until expiration.
If it’s much shorter than that—think 18 months or less—you’re racing the clock. The stock has to move quickly. That compresses your margin for error.
So the longer until the warrant expires, the better.
That doesn’t mean it takes years to make money, though. Sometimes the profits come quickly.
Take the Granite Ridge Resources (GRNT) warrants I recommended.
We exited with an 81% gain in a little over six months, while the underlying stock was actually down 25% over the same period.
Chris: And the U?
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John: The “underlying” stock.
In short: I only buy warrants on stocks I’d want to own anyway.
That means the business must have strong potential, whether it’s an innovative growth company, a turnaround in motion, or a firm with a major catalyst on the horizon. The warrant is just a leveraged way to play it for less capital upfront. But if the company itself isn’t compelling, the warrant’s not worth your time.
Chris: Do you have an example?
John: Look at Intuitive Machines (LUNR). I recommended the warrants (LUNRW) in September 2024.
Intuitive doesn’t make rockets like SpaceX. It makes vehicles launched into space aboard those rockets. These space vehicles help NASA and commercial payload customers get access to the lunar surface, like the company’s Nova-C lander.
It’s the first US vehicle to softly land on the lunar surface since 1972. And it’s a key part of NASA’s Artemis program to once again put astronauts on the surface of the moon.
It didn’t take long for the trade to play out.
The warrants surged more than 150% in a few months. We took a Free Ride, selling enough to recover our original speculation.
Then, just a couple months after that, the warrants took off again. We officially cashed out of the remaining warrants with a 262% gain ($2.31 to $8.37) in just five months.
Chris: And lastly, the V...
John: Volume. This is the final, but perhaps most overlooked, filter.
You can find a warrant with a long runway and a great underlying company… but if it barely trades, look elsewhere.
Some warrants are locked up in a few hands. Others just don’t have enough outstanding float. Either way, low volume means you could get stuck trying to enter or exit your position.
I usually pass on these types of warrants, even if they hit our first two criteria.
When a warrant passes all three of these filters, that’s when I get interested.
Chris: You talked previously about your Purple Innovation (PRPL) warrants trade, which you officially closed for a 4,987% gain. Is the goal to find 4,000%+ winners?
John: Most trades aren’t quite that good. But I’ve had many 1,000% winners. They come as a result of following my process.
The goal is to consistently identify warrants that pass T-U-V. When you do that, you increase the probability of catching outsized moves, and you eliminate most bad setups.
Without a system, every warrant looks interesting. With a system, most get rejected, leaving only trades with high potential.
So of course not every trade is a quadruple-digit winner. But we have had dozens of triple-digit winners (100%+). And some of those turn into quadruple-digit gains. That’s 10X your money or more. We’ve had more than half a dozen of those.
Chris: Why don’t more investors approach warrants this way?
John: Because most investors don’t approach warrants at all.
They’re niche. Barely followed. And that’s a shame, because they’re as easy to buy and sell as the stocks in your brokerage account. All of that creates opportunity.
Chris: Reader, if you want to get John’s full portfolio of warrants, including his four “buy now” recommendations report, go here. Your Charter Membership to Strategic Trader is waiting.