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24hrGold.com Editorials and Commentaries

Books

Warrants

Expiration Date
The last day the warrants can be
exercised. If warrants aren't
going to be exercised then they
must be sold the day before
the expiry date.
Leverage
The leverage of a warrant is a
measure of how much you can
increase your exposure to a
share if you bought warrants
instead of making a direct
investment. It is calculated by
dividing the current share
price by the current price of
the warrant.
Intrinsic Value
The difference between the
exercise price and the actual
trading price of the common
stock. Once the common has
gone over the exercise
price the warrants are 
said to be 'in the money'.
Volatility
The higher the volatility 
rating the higher the price
of the warrant will be.
A measure of actual 
stock price changes over 
a specific period of time. 
Historical volatility is 
calculated by using the 
standard deviation of an
underlying stock price.
In the Money
When the price of the 
common is higher than 
the exercise price
Time Value
The time value is the 
difference between the
current warrant price 
and its intrinsic value.
The time value is to be 
interpreted as the
consideration paid for 
the advantage that the
warrant buyer has over 
the direct investor.

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