Put warrant

Warrant that grants the buyer the right to sell a certain quantity of a particular underlying instrument at a predetermined strike price on or before a specified date

An investor who buys a put warrant expects that the price of the underlying instrument will fall during the exercise period. Thus, he acquires the right to sell a particular quantity of the security in question at an agreed-upon price, either at any time during the exercise period (American-style) or on the expiration date (European-style). The put writer is obligated to buy the underlying instrument at this price, and in return receives a premium from the put holder. However, most warrants are settled in cash rather than through the physical delivery of the underlying security.

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