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Newbee on warrants: Please help

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buzwiz
Contributor
Can anybody tell me what happens if I wait untill expiry date on an American call warrant? What are my options on that date if the price is above the strike price? Terribly newbee
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7 REPLIES 7
Galuc
Super Contributor
They expire so you don't get anything, what u doing in warrants as a newbee, ur schoolfees r going to be expensive!
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Russ
Super Contributor
I suggest Simon answer this.
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Not applicable
Well depends on whatyou mean above strike price. Is it a PUT or CALL?

PUT needs to be lower than strike price then you are ITM (In The Money) and you get the value of the warrants after expiry. If the price is above strike on a PUT you loose it all.

CALL needs to be higher than strike price then you are ITM (In The Money) and you get the value of the warrants after expiry. If the price is below strike on a CALL you loose it all.

But as you said American CALL and it is above strike price,you are ITM and you will get value of your warrant after expiry. You could opt to convert them to underlying but almost no one does this.
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buzwiz
Contributor
Thanks. I like what you say. But the reply by Galuc does not make sense to me.
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buzwiz
Contributor
How does one exercise ones's right on expiry date? What I mean is, would it be like normal trading online?
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Not applicable
School fees is the money you loose making "newbee" mistakes like trading products that you have not experience or understanding about. Every person here well tell you about it and everyone warns the newbees, but they never listen so they have to pay learning fees (lost money)..... Exercising kinda like trading but you pay the difference in between what you warrant is worth at the time you convert and the actual value of the sahre at the time. short answer you need lotsa extra cash to convert.
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SimonPB
Valued Contributor
you sell in the market and pay brokerage .. or you hold and you'll get the money in about a week ..
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