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Warrants
Issued on November 01 2010 par Strategies-options.com

Warrants are listed options issued by banks.
As simple as for stocks, one is able to buy warrants on markets.



I - What is a warrant ?

Warrants are listed options with longer maturities issued by banks. They provide a way to hedge or to speculate against a movement on a given asset, by offering the choice for the owner to buy (in case of a call warrant) or to sell (incase of a put warrant) an asset at a given price called 'the strike' during a given period of time.


II - Advantage

A premium is needed to be paid to profit from a move of an asset, up or down, without risking the whole value of that asset. The risk is then limited to the premium.



III - Graphs

For a call warrant :



For a put warrant :






Next : Turbo Warrants For Newbies
Previous : Warrants : A First Attempt

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Other Derivatives - INDEX
Other Derivatives - CHAPTER I
Other Derivatives - CHAPTER II
Other Derivatives - CHAPTER III
Other Derivatives - CHAPTER IV

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