The value of leveraged/geared products frequently rises or falls more dramatically than price movements in the underlying instrument. Leverage/gearing is a yardstick for the magnitude of such value disparities. For example, a product with a leverage factor of 5 will move by approximately 5% when the underlying instrument rises or falls by 1%. So bear in mind, leverage works both ways! With knock-out products, the reliability of the leverage factor is comparatively high. However, in the case of warrants, the (simple) leverage factor is of only limited meaningfulness because the price sensitivity (delta) must also be taken into account. With warrants, "omega" is the best coefficient for assessing the related leverage.

Liquidity is a yardstick for how easily a financial instrument can be traded. For shares with very little liquidity, the bid/ask spread is normally wider than with very liquid issues. In the area of structured products, issuers continually post bid and ask prices for their own products. Hence most of those products are tradable even if there is little or no turnover is taking place in them.