Volatility risk. Prices of derivative warrants can increase or decrease in line with the implied volatility of underlying asset price. The Customer should be aware of the underlying asset volatility. Limited Life: Unlike stocks, derivative warrants have an expiry date and therefore a limited life. Unless the derivative warrants are in-the-money, they become worthless at expiration. Deeply out- of-the-money warrants are less sensitive to movements in the price of the underlying asset because such warrants are unlikely to become in-the-money on expiry.
Appears in 7 contracts
Samples: Securities Trading Account Agreement, Securities Client Agreement, Securities Client Agreement
