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  • September 24, 2021
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Out-of-The-Money Warrant

A warrant whose exercise price exceeds the price of its underlying at a given point in time. In other words, when the formula value (intrinsic value) of the warrant is zero or smaller than zero, then it is said to be out-of-the-money. For example, if the exercise price of a particular warrant is $120 and the current price of its underlying stock is $110, then the warrant is $10 out-of-the-money.

It is known for short as OTM warrant.


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