Warrants
Warrants are similar to option contracts where the option owner enters into a long position, while the subscriber takes a short position. The issuers are large banking houses and exchanges. The option holder can be any one who purchases the option on the market. Options can be subscribed for the future purchase of the underlying asset (call) or for the future sale of the underlying asset (put). The realization price of the option is defined in advance and is known as the strike price. A timeframe is also defined in which the option holder's right must be exercised (European option) or until when it can be exercised (American option).
Warrants are similar to option contracts where the option owner enters into a long position, while the subscriber takes a short position.
The owner of the option has the right to apply the option within a defined term in the future and the issuer in this case must accept such an obligation stemming from the issue of the option. The owner of this right pays the issuer, in this case an option premium. An option premium is variable over time and depends on the change in price of the underlying asset and is the only cost (in addition to trader and exchange fees) that must be paid by the option buyer. As an option represents the right to the underlying asset in the future, the owner of the option has no right to payment of a dividend. The nature of option contracts means that leverage is an integral component.
