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If a company pays a dividend, particularly a hefty one-time dividend, it can provoke early exercise. In theory, a stock’s price falls on the ex-dividend date by the amount of the dividend. Option holders don’t receive the dividend, though, so they might sell the option before the ex-dividend date to avoid the price drop. 

If, however, the dividend is greater than the remaining TV of an option, then early exercise can make sense.

Consider a stock selling for $41 that is going to pay a $1 dividend, going ex-dividend tomorrow. A call option on the stock has a $30 strike price, sells for $11.50, and expires a week later. This option has an IV of $11 and $0.50 of TV. Assuming that the stock price falls by the amount of the dividend as anticipated (and for ease of calculation, we’ll assume the stock price stays flat to expiry), the option holder is better served by exercising early.

Early exercise means that the option holder pays $30 for shares currently worth $41. He then receives a dividend of $1 and continues to hold shares worth $40. Conversely, holding the option through the ex-dividend date until expiry sees the remaining TV dissipate, and the holder ends up with just the shares worth $40. 

Any combination of financial instruments producing a market instrument with different characteristics than could otherwise be achieved, for example, higher yield, better liquidity, or interest rate protection. These securities mimic conventional financial instruments that may or may not be available to investors. Most such deals are Private Placements involving two investors, and usually are created through Interest Rate Swaps, for example, creating a synthetic Floating Rate Note by matching a fixed rate bond and an interest rate swap.

Security created by buying and writing a combination of options that imitate the risk and profit profile of a security.

A derivative security that gives the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue as a “sweetener” to entice investors.
The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months.

http://www.youtube.com/watch?v=uo2cnX5EN0E&feature=PlayList&p=A85762BA9079D6DD&index=0&playnext=1

http://articles.moneycentral.msn.com/Investing/Extra/TheBestOnlineBrokers.aspx

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Normal and Inverted: Snapshot in Time
A contango market is often confused with a normal futures curve; and a normal backwardation market is confused with an inverted futures curve. 

Let’s start by getting an understanding of the difference between the two. Start with a static picture of a futures curve. A static picture of the futures curve plots futures prices (y-axis) against contract maturities (i.e., terms to maturity). This is analogous to a plot of the term structure of interest rates: we are looking at prices for many different maturities as they extend into the horizon. The chart below plots a normal market in greenand an invertedmarket in red:

Suppose we enter into a Dec 2008 futures contract, today, for $100. Now go forward one month. The same Dec 2008 future contract could still be $100. But it might also have increased to $110 (this implies normal backwardation) or it might have decreased to $90 (implies contango). The definitions are as follows:

• Contango is when the futures price is above the expected future spot price. Because the futures price must converge on the expected future spot price, contango implies that futures prices are falling over time as new information brings them into line with the expected future spot price.
• Normal backwardation is when the futures price is below the expected future spot price. This is desirable for speculators who are “net long” in their positions: they want the futures price to increase. So, normal backwardation is when the futures prices are increasing.

http://www.investopedia.com/articles/07/contango_backwardation.asp