Installment Warrants and MINIs Liquidity

steve007 said:

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

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Boggo said:

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

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