Factors that affect the price of Inline Warrants (3) - Time Value

Time value declines when a standard warrant approaches expiry, as the probability that the underlying price will move in favour of the standard warrant holder is lower, hence lower warrant price.

The impact of time value on Inline Warrants, similar to implied volatility, can be positive or negative, depending on if the underlying price is "In-The-Range" or "Out-Of-The-Range".

Assuming other factors remain unchanged, when the underlying price is “In-The-Range”, a shorter time to expiry means the probability of Inline Warrants to expire "In-The-Range" will be higher, thus the price of Inline warrants will be higher; when the underlying price is "Out-Of-The-Range", shorter time to expiry means the probability of Inline Warrants to expire "In-The-Range" is lower, thus the price of Inline Warrants will be lower.