# Rolling instalment warrant - what happens on the reset date?



## joe2000 (20 August 2006)

Hi,

I have a number of rolling instalment warrants which I bought a few months ago. My question is what is going to happen on the reset date? 

Thank you.


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## sails (20 August 2006)

Hi Joe,

I have never taken them to the reset date, so not exactly sure either.  However, here is a link to some info on the ASX site: http://www.asx.com.au/investor/warrants/how/rolling_instalments.htm and it looks like the terms and conditions may vary depending on the issuer.

Hopefully someone else can offer you help, but if you don't get any replies suggest you phone the warrant issuer and/or ask an ASX warrant expert by using this form:   http://www.asx.com.au/asx/about/Feedback.jsp

Cheers


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## Magdoran (30 August 2006)

joe2000 said:
			
		

> Hi,
> 
> I have a number of rolling instalment warrants which I bought a few months ago. My question is what is going to happen on the reset date?
> 
> Thank you.




Hello Joe,


Margaret is spot on with her advice here.  I saw this earlier, but was flying interstate the last couple of weeks, so didn’t have time to address this question.

Joe, you really should read the issuers terms and conditions, as well as fully read up on instalment warrants if you are going to invest in them.  I have quoted an excerpt out of the ASX issued PDF on Warrants below for your information.  A lot depends on the strike price you bought and if this is ITM, OTM or ATM, and how the issuer structures the “funding” cost (essentially an interest component and fees for the issuer to hold the warrants on your behalf).

It’s kind of like taking out a hire purchase loan on a car - you get to drive it, but you have to pay the yearly payments on it, and pay the residual amount due to own it outright.  Try thinking of it in these terms.  The rollover is essentially the next payment to continue to use the car.  See the conditions set out below for more information.




> *From the ASX PDF on Warrants*
> 
> *Rolling Instalments*
> 
> ...




Regards


Magdoran


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