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We are
of the opinion that the Canadian mining stocks are close to a spectacular
breakout very soon and we think it timely to revisit one of our articles of a
few years ago.
Are
the potential gains only for Canadian investors?
Frequently
I read comments from other analysts regarding the difficulties of trading,
i.e. buying, the Canadian mining stocks. They usually suggest investors seek
out a broker that specializes in these stocks and while that is not bad
advice, it is not necessary to do so.
There
is no secret code to be entered to play this game, it's just a matter of
understanding a few basic rules and you will soon be a professional yourself.
Canadians:
The
trading of the mining stocks and warrants will be very easy for you. The vast
majority of mining companies are based in Canada and trade on the Toronto
Exchange (TSX) or the TSX Venture Exchange. The symbols for the shares and
warrants can be easily obtained and orders executed. The Canadians through
their local newspapers have access to an incredible amount of news on the
natural resource sector as this is where most of the companies are
headquartered and also where a substantial portion of the world's resources
are located.
Americans:
If
you want to be included in this long-term bull market in the natural resource
sector, it is imperative that you understand how to invest and have your
orders executed.
For
U.S. citizens do not be discouraged if your broker has previously told you
they cannot execute your orders on the Canadian mining shares or warrants. In
a few minutes of reading you will be an expert on this subject and will
probably know more than your broker and I assure you they will execute your
orders.
As
a U.S. citizen, I have purchased hundred's of the
Canadian mining companies and warrants using my U.S. discount brokers in the
last few years and I will share with you 'exactly' how to place your orders,
or if necessary, 'exactly' what to tell your broker.
For
those specific mining shares you are following, I suggest you track your
portfolio using Stockhouse or Yahoo Finance using
the Canadian symbols and thus follow the Canadian prices, including the bid
and ask price for each security.
Symbols
for mining shares:
In
order to place orders you need a symbol, right? Virtually all of the Canadian
mining companies have been assigned a five (5) alpha symbol by the OTC market
to facilitate these trades in the United States. The last character is an 'F'
representing a foreign market. You will find
the symbol (s) in numerous
locations:
- Your brokerage
firm - symbol search
-
- Yahoo Finance
-- symbol search
-
- Nasdaq -- symbol search
With
these OTC symbols you can now enter your order online. Cautionary reminder:
you may see a price for the most recent trade, but this is probably not the
current price. Remember, the primary market for the Canadian stocks is on the
TSX not in the U.S. The price you see using the OTC symbol will be the last
trade (in the U.S.) which may be days, weeks or months ago. In other words,
the stock could be actively trading on the TSX in Canada but not in the U.S.
due to a current lack of knowledge and interest by U.S. investors as pointed
out above. Do not be discouraged. Ascertain the current price of the shares
in Canadian dollars, decide how much you want to pay for the shares (in U.S.
Dollars) and enter your LIMIT ORDERS.
Some
investors will no doubt give up saying, 'this is too difficult'. Let me
remind you that this bull market will take place with or without you. The
choice is yours whether to participate and it is essential for you to
understand how to get quotes and place your orders.
Symbols
for Warrants:
Many
of the warrants trading have also have been assigned a 5 alpha symbol by the
OTC market, if not then a little more work it required. In these cases, if
there is a warrant you wish to purchase you will need the cusip
number (a 9 digit legal identification) for this warrant. The cusip number can be obtained from the company and is but
one of the many particulars on warrants which we furnish to our subscribers.
If
there is an existing OTC symbol you may enter the order for the warrants
online, otherwise, you will need to call your broker and give them the cusip number for the warrant.
Example:
Let's
say you want to purchase 5,000 warrants on ABC Mining Company, the cusip number is 123456789, the warrants expire on January
5, 2011 and you want to limit the price you pay in U.S. Dollars to $0.50.
Give your broker the specific instructions:
"I
want to buy 5,000 ABC Mining Company warrants, cusip
number - 123456789, expiring on January 5, 2011 at a LIMIT PRICE of $0.50
U.S. dollars." Your broker will read the order back to you for
confirmation. Congratulations, you have just placed your first order for
warrants.
Australian
& U.K. Citizens:
Depending
upon your brokerage firms, I suggest you can purchase the Canadian mining
shares and warrants using the procedures discussed above for U.S. Citizens.
Concluding
thoughts:
Commissions:
The
commissions will vary depending on your brokerage firm and whether you can
place your orders online or whether you must call your broker to enter the
trade. While the amount of the commission should be considered, they are to
me just an expense, overhead, of doing business. The potential gains to be
derived from the mining shares and warrants over the coming months and years
should over shadow your concern over commissions, in my opinion.
For
those readers unfamiliar with our services:
- PreciousMetalsWarrants.com
provides an online database for all warrants trading on the natural resource
companies in the United States and Canada.
-
- InsidersInsights.com
tracks the buying and selling of corporate insiders with a focus on the
junior mining and natural resource sectors. Buy and Sell Alerts are
issued as deemed relevant based upon our analysis.
-
Dudley Baker
PreciousMetalsWarrants
Also
by Dudley Baker
Dudley Baker is the owner/editor of Precious Metals
Warrants, a market data service which provides you with the details on all
mining & energy companies with warrants trading on the U. S. and Canadian
Exchanges.
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