The important practical value of Soros' investment theory lies in its use of the theory of contrarianism to identify overreactive markets, following the process of market formation, from self-propelled strengthening to decay,
Soros' theory of interactions only provides him with the direction of his investment objectives and the means to seize potential opportunities, not the precise orientation or the timing of important turns.
The unstable state of the market has been the ground on which Soros has tested his theory of contrarianism, arguing that financial markets are volatile and disorderly.
Warrant trading means that the holder acquires a right, not a duty, and the recipient has the right to decide whether or not to honour the contract, while the issuer has only the obligation to be executed, and therefore the investor has to pay a price to acquire this right.
