Intermediate
Intrinsic value time value and expiry breakeven
A warrant premium combines the value of its current exercise advantage with the value of possibilities that remain before expiry. Understanding both prevents a low price...
Read articleFOLITIC / WARRANTS & RIGHTS
Warrants & Rights Trading Guide
Understand warrants and subscription rights, from contract basics to pricing, dilution, exercise and portfolio risk. Follow eight stages covering corporate warrants, covered warrants and rights issues.
Start with What a warrant gives you and what it does not, then follow the next lesson links. Explore 32 lessons with worked examples, exercises and further reading.
Explore the learning path
Browse by topic
Warrant Pricing and Leverage · All lessons
Warrant Pricing and Leverage
Separate intrinsic value from time value and measure sensitivity without mistaking it for a forecast.
Intermediate
Delta gearing and the limits of leverage estimates
Gearing compares underlying exposure with the warrant premium, while delta estimates local price sensitivity. Their combination is an approximation that changes as the market and the...
Read article
Intermediate
Implied volatility and why a correct view can lose money
A warrant can lose value even when the underlying moves in the expected direction. The purchase price may already include expensive uncertainty that later disappears.
Read article
Intermediate
Time decay dividends and comparing warrant prices
Time, dividends and contract differences can make two warrants on the same share look deceptively comparable. A useful comparison holds exposure and assumptions consistent before judging...
Read article