Common use of Market Forces Clause in Contracts

Market Forces. In addition to the basic factors that determine the theoretical price of a derivative warrant, derivative warrant price are also affected by the demand for and supply of the derivative warrant. This is particularly the case when a derivative warrant issue is almost sold out and when there are further issues of an existing derivative warrant. High turnover should not be regarded as an indication that a derivative warrant’s price will go up. The price of a derivative warrant is affected by a number of factors in addition to market forces, such as the price of the underlying assets and its volatility, the time remaining to expiry, interest rates and the expected dividend on the underlying assets.