Stephen’s note: The deadline to join Strategic Trader, our brand-new warrants advisory, is tonight at midnight.
Go here to make your decision before the doors shut.
Today, I’m handing the reins to Strategic Trader editor John Pangere. He walks us through a recent warrants trade that produced 300% gains in just two weeks.
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A 300% gain… in two weeks.
Most folks think you have to take on a massive amount of risk to achieve that. Or try some crazy, leveraged trading strategy that can wipe you out in a hurry.
That’s not the case.
This was a real warrants trade I recommended to my members.
And it wasn’t a “go to the carnival and hope for the best” type of speculation.
You know what I’m talking about... you go to the carnival to play games thinking you’ll come home with the big prize.
First you start at the shooting gallery, but your aim is miraculously “off” that day.
When that doesn’t work, you move to the next game. Maybe this time you’ll try your hand at the ring toss. Then on to throwing darts at underinflated balloons.
This happens over and over again. You see other people winning. So you jump from game to game, hoping it’s your turn next.
The truth is you don’t have to play everyone else’s game. You don’t need to go to the carnival to win big prizes.
To speculate the right way, all you need is one strategy that can churn out enough winners to more than make up for the losers.
That’s what I do with warrants.
Drilling for warrants
Long-time premium members of Strategic Trader know the advantage to speculating with warrants is the leverage you get to a rising stock price. So if a company’s stock is up 100%, the warrants might be up 200% or more over the same period.
It’s how we made 300% in two weeks speculating in offshore oil drilling company Valaris Ltd. (VAL).
In the January issue of Strategic Trader, I told readers that sometimes the best place to find great ideas comes from looking around at what everyone else hates—and finding a way to play it.
But instead of buying a company’s stock, we target the warrants, which offer far greater upside with less upfront capital.
That’s exactly what we did with Valaris when I recommended the company’s warrants on January 21.
At the time, I told premium members the offshore drilling business was rising from the ashes after years in purgatory.
The fact is that the world wouldn’t survive without offshore oil. According to the EIA, offshore oil production accounts for about 30% of the world’s supply.
But in order to search for oil offshore, you need the right tools. Like the offshore rig pictured below.
Valaris DS-17 | Source: Valaris
Valaris happens to be one of the world’s largest offshore rig operators.
It owns a fleet of “seventh generation” (7G) drillships, the most advanced in the world. They can pull oil from nearly 10 miles below the surface of the ocean.
Today, there are only about 50 of these 7G drillships in the world. Valaris owns 12 of them.
After declaring bankruptcy in 2020, the company emerged with a fresh balance sheet and an eye on the future. And with a world-class fleet, Valaris turned its fortunes around by going from bankruptcy to billions in just a few short years.
So we bet that the company’s fortunes would continue to rise, especially when its backlog—work booked for the future—kept rising.
But a funny thing is happening in the offshore oil-drilling business: new ships aren’t coming online anytime soon. They take years to build, and there simply aren’t any on order with shipyards.
And with some ships too old to keep operating, the fleet of drillships is getting smaller.
So last month, offshore drilling giant Transocean LTD (RIG) decided instead of waiting years for a new fleet, it would buy one. More specifically, it’s acquiring Valaris.
Shares of Valaris shot up immediately.
From the time I told readers about the company on January 21 through February 9, when we closed out the trade, shares gained about 53%.
But the warrants crushed that return, gaining 300% over the same period.
Same company. Wildly different result. All by using a system that’s proven itself over the seven years since starting Strategic Trader.
And that’s not the only recent example...
Ready to trade warrants?
In December, I recommended warrants in a little-known drone company, VisionWave Holdings (VWAV), which is making a system to counter drone swarms.
Within weeks, the stock shot up 84%. But the warrants did far better, gaining 202% when I alerted premium members to take some profit.
But those are just two examples of what we’ve done here at Strategic Trader.
My premium subscribers have had the chance to cash out with 10X or more gains more than half a dozen times over the past seven years. Not to mention the more than two dozen triple-digit gains on other trades.
The fact is, I’ve seen this time and time again. I’ve personally made more than 10X gains numerous times over the years with warrants. It’s the reason I developed the system that we use today to zero in on this little-known, but lucrative, corner of the market.
The good news is we’re just getting started.
So the question isn’t, “What game are you going to play this year to help boost your portfolio?” The question is, “Why aren’t you trading warrants?”
If you’d like to see how I find trades like this before they happen, that’s exactly what I share with premium members of Strategic Trader.
Charter Membership is open right now, but enrollment closes at midnight.
If you’re curious about trading warrants and the kind of asymmetric setups they can produce, you can learn more about Strategic Trader here.
Regards,
