Factors that affect the price of Inline Warrants (2) - Implied Volatility

Unlike standard warrants, the price of Inline Warrants can be positively or negatively impacted by implied volatility, which depends on whether the underlying is "In-The-Range" or "Out-Of-The-Range".

Implied volatility represents the anticipated level of volatility of underlying assets over the remaining life of a structured product, as reflected in the price of the structured product.

Assuming other factors remain unchanged, when the underlying price is "In-The-Range", lower implied volatility means the probability of Inline Warrants to expire "In-The-Range" is higher, hence the price of Inline Warrants will be higher; on the other hand, when the underlying price is "Out-Of-The-Range", lower implied volatility means the probability of Inline Warrants to expire "In-The-Range" is lower, hence the price of Inline Warrants will be lower.