Structured Warrants

Gain investment exposure
at a fraction of the price

Warrants are leveraged investments that allow investors to gain exposure to the underlying security without actually owning it.

Investors who have a view on the movement of the underlying security can buy a warrant, which costs a fraction of the price of the underlying share.

  • Small capital outlays with higher percentage return
  • Amplified gains and possibly losses

How to apply

Investing in structured warrants

A structured warrant is issued by a bank or securities firm. It gives you the right to buy / sell a given quantity of the underlying asset at the strike / exercise price on or before the expiry date.

Company warrants vs. structured warrants

 

Company warrants

Structured warrants

Issuer

Own company

3rd party issuer, usually a bank

Underlying

Own company shares

Any underlying asset that meets legal / regulatory requirements

Exercise style

Usually American

American or European

Dilution

New shares issued, usually results in share dilution

No new shares issued, no dilution of shares

Expiry period

Usually 3 - 5 years

Usually 6 months - 2 years

Liquidity

No market maker

Designated market maker

Settlement period

Physical delivery of shares

Usually cash settled


Factors affecting price of warrants

Factor

Change

Impact

Underlying price

Increase

Positive

Exercise price

Increase

Negative

Expiry period

Increase

Positive

Volatility

Increase

Positive

Dividend expectations

Increase more than expected

Negative

Interest rates

Increase

Positive



Talk to us to find out more

Consult our financial consultants and we will provide you with free financial advice that suits your goals and risk profile, with no obligations.

 

Call us at

03 8317 5000