Quick Concepts

[The Barbarian Investor]

Warrants- From Noel Whittaker

QUICK CONCEPTS
For us beginners..fel free to post any usefull information for us beginners

What is a Warrant?

A warrant is a financial instrument issued by a bank or other financial
institution, which is traded on the Australian Stock Exchange’s equity
market. Warrants may be issued over securities such as shares in a
company, a currency, an index or a commodity.

There are many different types available. However, the most common are:
i) Trading warrants (put/call warrants) over a single stock, index
currency, or interest rate.
ii) Warrants over a basket of stocks.
iii) Instalment warrants.
iv) Endowment warrants.
v) Barrier warrants.
vi) Capital plus warrants.
vii) High-yield notes or BLOCS.

Warrants belong to the investment class known as derivatives and, as
such, are highly speculative. On the positive side, they can potentially
offer much higher returns than a direct investment as they are highly
leveraged. On the negative side they can lead to equally high losses
and, in the worst-case scenario, result in the loss of your entire
investment. Warrants tend to magnify the effects of any movement in the
market.

 

[Scratch]

Warrants belong to the investment class known as derivatives and, as
such, are highly speculative. On the positive side, they can potentially
offer much higher returns than a direct investment as they are highly
leveraged. On the negative side they can lead to equally high losses
and, in the worst-case scenario, result in the loss of your entire
investment. Warrants tend to magnify the effects of any movement in the
market.

Barbarian,

I have been swanning around checking out various derivatives. CFDs appear to be for those with expertise. I have read all the ASX handouts on Warrants and being ex Navy, am still not clear on some points. Would you like to step us plebs through a couple of trades??

S

 

[RichKid]

Barbarian,

I have been swanning around checking out various derivatives. CFDs appear to be for those with expertise. I have read all the ASX handouts on Warrants and being ex Navy, am still not clear on some points. Would you like to step us plebs through a couple of trades??

S

As this appears to be a thread for 'quick' concepts it may be best to continue a detailed discussion in the Derivatives forum, there are some threads on warrants there already. Alternatively, someone could start a follow my trade type thread for warrants in that forum. Just trying to keep the thread on topic, unless BarbI would like to change the focus?

 

[Scratch]

As this appears to be a thread for 'quick' concepts it may be best to continue a detailed discussion in the Derivatives forum, there are some threads on warrants there already. Alternatively, someone could start a follow my trade type thread for warrants in that forum. Just trying to keep the thread on topic, unless BarbI would like to change the focus?

I am happy to go with the recommendations of the RichKid. Barbarian, if you are up to showing us the hows and wherefors....please let me know where to go....or should I say which forum to go to. Thanking you in anticipation.

S