Warrant

A warrant is a securitised option issued by a brokerage that gives the holder the right to buy or sell an underlying asset at a set price and trades on the exchange like a stock. Warrants are options adapted for retail investors: they trade on the BIST Equity Market like shares, require no margin and losses are limited to the price paid.

Contents

1.Key points
2.How it works
3.Interpretation
4.Pitfalls
5.Frequently asked questions

Key Points

The underlying can be a stock, index, currency or commodity; call warrants are bullish and put warrants bearish.
Warrants are used for leveraged short-term directional trades and limited-risk hedging.
time value decays quickly and the warrant can expire worthless.

How It Works

Warrant price = (Intrinsic value + Time value) / Conversion ratio. The conversion ratio shows how many warrants correspond to one unit of the underlying. Leverage = Underlying price / (Warrant price × Conversion ratio). A market maker provides liquidity with continuous bid and ask quotes.

Interpretation

Warrants are used for leveraged short-term directional trades and limited-risk hedging. They control a large position with small capital and carry no margin call risk.

Pitfalls

time value decays quickly and the warrant can expire worthless. Because leverage is high, 100% losses are common. The price depends on the market maker’s quote; when volatility falls the warrant loses value even if the underlying is flat.

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Frequently Asked Questions

What is Warrant?

A warrant is a securitised option issued by a brokerage that gives the holder the right to buy or sell an underlying asset at a set price and trades on the exchange like a stock.

How does Warrant work?

Prepared by: Yatırımcı.AI Research TeamLast reviewed: September 27, 2026Method: MethodologyEditorial policy