Installment Warrants and MINIs Liquidity

[steve007]

Hi All,

I have been trading mostly on stocks and am in the process of venturing into Installment warrants and Put MINIs to protect positions.
I have been told to be aware of the liquidity issue of Warrants and MINIs. I want to get into the 4 major banks, Macquarie bank and Woolworth. I am considering investing quite a sum of money to get good high yield income from the banks.

Can someone provide some intel into this issue. The problem I see is that if I cannot get out of the positions, when I need to, then it is a no-goer. As the underlying stocks are very liquid, is there a problem with the warrants?

I

 

[Boggo]

Hi All,

I have been trading mostly on stocks and am in the process of venturing into Installment warrants and Put MINIs to protect positions.
I have been told to be aware of the liquidity issue of Warrants and MINIs. I want to get into the 4 major banks, Macquarie bank and Woolworth. I am considering investing quite a sum of money to get good high yield income from the banks.

Can someone provide some intel into this issue. The problem I see is that if I cannot get out of the positions, when I need to, then it is a no-goer. As the underlying stocks are very liquid, is there a problem with the warrants?

I

Giday Steve.
I don't currently hold any warrants just at the moment but I use them a bit to leverage some of the top stocks.
My main use of instalment warrants is to capitalise on dividends etc, especially in a SMSF where you aim for the fully franked dividends and pick up the tax credits by multiples of the underlying.

They can be a double edged sword so make sure you fully understand all the different types of instalment warrants, how they trade and how the daily pricing matrix works.

The market maker will always provide a market for you but they don't open and close like a stock does.
In the link below you can search and find the different warrants available for various stocks, (just for Citi) and the second link is an example of the pricing matrix for four different Citi warrants on WOW.
You need to be able to decide which one of these is more suitable for your situation and what that Delta etc means.

https://au.citifirst.com/EN/search/...aEaVB/VVlL8tyK9T7toN41HnhDvdo2Yf6MwFcznedqOY=

https://au.citifirst.com/EN/PricingMatrix/WOWIOA

 

[steve007]

Giday Steve.
I don't currently hold any warrants just at the moment but I use them a bit to leverage some of the top stocks.
My main use of instalment warrants is to capitalise on dividends etc, especially in a SMSF where you aim for the fully franked dividends and pick up the tax credits by multiples of the underlying.

They can be a double edged sword so make sure you fully understand all the different types of instalment warrants, how they trade and how the daily pricing matrix works.

The market maker will always provide a market for you but they don't open and close like a stock does.
In the link below you can search and find the different warrants available for various stocks, (just for Citi) and the second link is an example of the pricing matrix for four different Citi warrants on WOW.
You need to be able to decide which one of these is more suitable for your situation and what that Delta etc means.

https://au.citifirst.com/EN/search/...aEaVB/VVlL8tyK9T7toN41HnhDvdo2Yf6MwFcznedqOY=

https://au.citifirst.com/EN/PricingMatrix/WOWIOA

Thanks Boggo. Very much appreciated.
My biggest worry is that would I be able to gt out of the MINIs when I want at the time and reasonable price?
It like the fricking insurance companies, they want your money and when you need something back it is an eternal fight.

 

[kipper57]

Steve the Market Maker will dictate the price unless there is another trader in the mist.

I suggest you watch the market depth of the warrant first and see how the Market Maker operates. Keep in mind leverage is good for making money but can also be painful in losing it.

As Boggo mentioned understand the instrument b4 trading the warrant, as some do have different features. It is not easy when the disclosure document has a whole lot of crap in it, that is general info rather than specific to the instrument you want to trade.

I am considering giving Index warrants a go anyone traded them? things I need to consider?