Time decay Sample Clauses

Time decay. So long as other factors remain unchanged, the value of derivative warrants will decrease over time. Therefore, derivative warrants should never be viewed as products that are bought and held as long term investments.

Time decay. The purchaser of a warrant, whether it is a call warrant or a put warrant, has a known and limited potential loss. Warrants are a wasting asset and if a purchased warrant expires worthless (ie out of the money), the purchaser will lose the total value paid for the warrant (known as the premium), plus transaction costs. Transactions in all derivative products traded on the Market carry a degree of risk. The initial outlay of capital may be small relative to the total contract value so that transactions are ‘leveraged’ or ‘geared’. A relatively small market movement may have a proportionately larger impact on the value of the contract. This may work against you as well as for you. You may sustain a total loss of funds in relation to your position.