Commodity Warrants

[RichKid]

Just came across some trading warrants on oil on the ASX. This is the link to the info page with examples of how they work: http://www.asx.com.au/investor/warrants/how/commodity_warrants.htm

It appears they may introduce more commodities in future (just a guess). Note the spread and the conversion ratio when working out costs etc.

I heard of a non-ASX traded warrants provider too, I think they were just callled 'commodity warrants' but I didn't like the pricing or warrant terms.

We still need more players and greater liquidity as I reckon warrants are an easy way to lose money if not handled properly.

 

[RichKid]

.......
I heard of a non-ASX traded warrants provider too, I think they were just callled 'commodity warrants' but I didn't like the pricing or warrant terms.

We still need more players and greater liquidity as I reckon warrants are an easy way to lose money if not handled properly.

This is the link to the product I mentioned, Commodity Warrants Australia, I've never used them:
http://www.cwa.net.au/public/index.php

 

[RichKid]

This is the link to the product I mentioned, Commodity Warrants Australia, I've never used them:
http://www.cwa.net.au/public/index.php

Just thought I'd mention that there may be better ways to get exposure to commodities, especially the metals- listed co's, options, ASX traded warrants, CFD's, futures....

 

[markrmau]

What's the spread like? I noticed MacBank spread for oil was pretty high - about 3%.

I tried looking around the site but had difficulty finding anything. Are the warrants listed on ASX? Is there a simple link to a list of the actual warrant details?

 

[RichKid]

What's the spread like? I noticed MacBank spread for oil was pretty high - about 3%.

I tried looking around the site but had difficulty finding anything. Are the warrants listed on ASX? Is there a simple link to a list of the actual warrant details?

Not sure Mark, I didn't even bother looking through it, the ASX is bad enough with marketmakers ruling the roost, I'd expect even less liquidity/wider spreads with a private bunch, it's probably like a dodgy mini-CFD provider except they package it as a warrant. Too much risk in these unknown providers imo. I've had a look at the ASX warrants (see first post) and they seem the best if you can get in at the right time for a quck swing trade.

Soft commodities are the tough ones, I'd guess that CFD's would be the way to go unless you can find a share chart that tracks cotton or soybeans or sugar as closely as LHG tracks Gold.

Maybe the overseas brokers have more options but you'd have to open a foreign ac I think. Wayne may know more about IB and similar brokers. Way out of my comfort zone.

We're lucky to have this expsorue to commodities in Australia, other countries aren't so lucky!