Post #413 by rnam on the Falling Knives board

Investment Strategies / Falling Knives

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% Anyways, at first glance, they seem like an interesting alternative - you get a leveraged exposure to the possible upside of the OXY share price, some protection on the downside, and interest on your $22 savings to invest, losing only the 1.7% dividend. Do you or anyone else have any other thoughts on why the OXY-WT might be better than OXY?

The warrants can be thought of as deep in the money call options at a bargain premium. There are no call options available for 2027. The premiums for those listed for Jan 2026 are much higher than the 20 cents or so you pay for the warrants. Plus the trading volumes and liquidity are much higher for warrants than options. Finally there are anti-dilution provisions on the warrants.

Cash interest rates of 4.5 - 5% almost fully compensate for the loss of dividends.

You may not recall, but we had this exchange in TMF in 2022.

https://discussion.fool.com/t/oxy-warrants/66152

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