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Thursday, 17 September 2015

iCapital Close End Fund: The Winners and the Losers over the last 10 years

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This fund has done reasonably well since inception.  Its NAV has grown from RM1.00 in 2005 to the present NAV of RM 2.80 on 17.9.2015 (CAGR ...

Local Index Warrant: Calculation of Settlement Price

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The method of calculation of settlement price differs for stock warrants, index warrants and other types of warrants. Local Index Warran...
Wednesday, 16 September 2015

Decoding a Warrant Name

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Warrant Name Underlying Strike Price Issuer Warrant Type:  European or American Warrant Class:  Call Warrant or Put Warrant Expiry Dat...

Option Pricing for Beginners

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Option Pricing for Beginners Posted on   May 22, 2009   by   James Kwak   For a complete list of Beginners articles, see  Financial...

Warrants: Premium

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Premium is a measure of how much the underlying price has to move for the warrant to break even if it is held until maturity . The pre...
Tuesday, 15 September 2015

Warrants: Option Pricing Model

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An example:

Warrants: Turnover versus Outstanding Quantity

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Turnover is the total units of a warrant bought and sold on a day. Outstanding quantity refers to the accumulated units, or the accumul...
Saturday, 12 September 2015

Warrants: Historical Volatility

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Historical volatility reflects the historical price of a stock within a given period of time. If Stock A is trading at $10 with a volatili...

Warrants: Implied Volatility and Warrant Price

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Apart from the underlying price , the most important factor that affects the price of a warrant is implied volatility. It is the expected ...

American Warrants versus European Warrants

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Warrants can be divided into American or European types, based on the way they are exercised. American Warrant - Holder can exercise the...
Friday, 11 September 2015

Warrants: Conversion Ratio

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The conversion ratio determines the number of warrants required for conversion into one share of the underlying stock or one point of the un...

Technical Parameters of Warrants: Vega, Gamma and Rho

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Vega Vega measures the rate of change in the warrant price for each point of movement of its implied volatility. No matter it is a call ...

Technical Parameters of Warrants: Theta

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Theta, also called time decay, measures the rate of change in the price of a warrant as its maturity is running short while all other things...

Warrants: Effective Gearing versus Gearing

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The biggest appeal of warrant trading lies in the leverage effect. Investors only need to invest a small sum to earn a potential return c...

Warrants: Days to Maturity

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Warrants can be classified accordingly to the length of their remaining days to maturity. Short term warrant:  Warrant with less than 3 mo...
Thursday, 10 September 2015

Deep in the money (deep ITM) and far out of the money (far OTM) warrants

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If we take into account the extent of difference between the strike price and the underlying price, warrants can be further classified into:...

Warrants - In the money, at the money and out of the money

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A warrant is described as in-the-money (ITM), at-the-money (ATM) or out-of-the-money (OTM), depending on the relationship between its strik...

Covered Warrants

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Covered Warrants are mainly issued by investment banks. They are issued to offer a leveraged investment tool for investors. Cash settl...

Penny Warrants are very risky.

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Warrants with only 1 - 2 weeks left to maturity and over 10% out-of-the-money (OTM) are called penny warrants. They are very risky and the...

Company Warrants

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The basic concept of warrants is to give investors the right to buy or sell the underlying at the pre-determined strike price on the pre-...