Warrant Handbook

Item
1
Factors Affecting Warrant Price

​

Item
2
Moneyness

Moneyness is the relationship between Exercise Price and Underlying Price. 

There are three forms of moneyness: (i) In-the-Money; (ii) At-the-Money; and (iii) Out-of-the-Money.

  • For Call Warrants
    • In-the-Money         : when Underlying Price > Exercise Price;
    • At-the-Money         : when Underlying Price = Exercise Price;
    • Out-of-the-Money  : when Underlying Price < Exercise Price.
  • For Put warrants
    • In-the-Money         : when Underlying Price < Exercise Price;
    • At-the-Money         : when Underlying Price = Exercise Price;
    • Out-of-the-Money  : when Underlying Price > Exercise Price.

​

The warrant will be worthless if it expires out-of-the-money on expiry date.