Warrants- From Noel Whittaker
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