Stock ACME current price $10 dividend 5% Future contract (1 year)=10-(0.05*10)+(0.02*10)= $9.7 Turbo CALL 1 year parity 1:1 strike at $9 and bid-ask prices:0.98-1 ->related price=9+1=$10 After 1 year (d=dividend): Comments: If you do not want to be leveraged, buy the stock If you just want to be leveraged, buy the future If you want to be leveraged, do not want to rollover quarterly the future(+spreads+commissions) and do not want to wait for a margin call, use the turbo warrant When to use turbo warrants When you want to speculate, or just be leveraged When the future contract minimum is too big (i.e.: just 1 mini euro/dollar contract is $62.000) When you do not have a derivatives account to buy the future contract When you do not want to receive a margin call or add money to your derivatives account when the price goes in the opposite direction Exchanges Securities exchanges that trade this product: Euwax – Stuttgart SMART Market – Frankfurt Nordic Growth Market, Nordic Derivatives Exchange (NGM, NDX) Hong Kong Exchanges See also Warrant (finance) Turbo (finance) Notes External links Jonatan Eriksson: Explicit Pricing Formulas for Turbo Warrants Jonas Persson, Jonatan Eriksson: Pricing Turbo Warrants Celeste Skinner: Are Turbo Certificates the Answer to CFD Restrictions? Options (finance)