You cannot lose more than your capital outlay, BUT you can lose ALL of your capital outlay. If you purchase shares and the price drops, you can conceivably wait for the market to recover and pass the initial price that you paid, realising a profit, even if it takes years. With warrants that is not true, though. They have a predefined lifespan and if your warrant is not "in the money" when it expires then it has no value at all and you lose your entire investment. The implication of leverage or gearing simply means that a 1% change in the price of the underlying commodity can have an effect of more than 1% (3%, 4%, etc) on the warrant price. While this is great for positive movements, it is just as true for negative movements. Potentially increased reward always implies increased risk.