The time value of a warrant depends primarily on the residual time to expiry, the implied volatility of the underlying, anticipated dividends, and interest rates. The longer the duration and the higher the volatility, the greater the time value, as there is more chance the warrant will acquire intrinsic value.

Share warrants (BSA) are issued by the companies themselves and entitle the holder to subscribe to a future capital increase, while covered warrants are issued by financial institutions and constitute speculative instruments without the creation of new shares. BSA serve as a financing tool, whereas covered warrants are traded on Euronext Paris and subject to MiFID II regulations.

Knock-out warrants (turbos) differ from standard covered warrants through their knock-out barrier mechanism. If the underlying asset's price reaches a certain level (the barrier), the warrant is deactivated and loses all its value. This offers even greater leverage but with increased risk of total loss.

A warrant's premium is composed of intrinsic value, which represents the immediate gain from exercising the warrant, and time value, which reflects the probability that the warrant will acquire intrinsic value before expiry. These two components depend on various factors such as residual time, implied volatility, anticipated dividends, and interest rates.

Theta expresses the daily loss of value due to the passage of time for a warrant. It is always negative for the buyer because as expiry approaches, the probability that the warrant will acquire intrinsic value decreases, which reduces its overall value.

Leverage measures the amplification of changes in the underlying asset's price on the warrant's price. It is calculated by multiplying the delta by the ratio of the underlying asset's price to the warrant's price adjusted for parity. For example, leverage of 10.98 means that a 1% change in the underlying will result in approximately an 11% change in the warrant's price.

Warrants can be used for different functions in financial markets. Covered warrants are primarily speculative instruments as they allow betting on market movements with significant leverage. Put warrants serve as portfolio hedging to protect against declines. Warrants on foreign indices or shares facilitate international diversification without operational complexity.

A warrant is considered 'in the money' when its immediate exercise would generate a profit. For example, for a call warrant, this occurs when the underlying asset's price is above the strike price. This definition is crucial for assessing a warrant's position relative to the market.