Trying to understand warrents

[Salv]

Ok i get the basic principle behind warrents, im struggling to understand the nitty gritty detail tho. I get that they are leveraged, but does that mean that i am exposed to more than my capital outlay that i used to purchase the warrant, like a SSF?

[#2]

If I can give advice, you should try and attend Sbk warrants course will give you much better insight into warrants, you can also look under help and education. And to your question no u can't loose more than your capital outlay

[Salv]

Thx, i have registered for the course, but an inquiring mind must b have its questioned answered ;) Thx again

[Rovert]

drop me a mail with your question and i'll try and answer --> [email protected]. I've lost enough to know lol

[NJ_1]

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.