Warrants


Call Warrant is an alternative investment that investor can invest in Bursa Malaysia. It can be traded through remisiers or via online trading, which is similar to trading shares.

The advantage of call warrants is that, it has unlimited upside similar to buying the underlying asset, but the loss is limited to the amount initially invested in the call warrant.

In order to make trading decision, normally investors look at gearing, premium, cash settlement & expiry date.

Below is the formula to how calculate call warrant gearing, premium and cash settlement. Alternatively, you may want to use free online call warrants calculator. The online calculator will calculate these parameters together with the trading profit or loss.

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warrant

Previously we look at Warrants and Local Call Warrants. In Bursa Malaysia we are also allowed to trade Foreign Call Warrants. As mentioned previously, below are short brief explanation about Call Warrants.

Call Warrants give a right, but not an obligation, to buy a fixed number of stock shares at a specified price within a limited period of time. But unlike warrants, call warrants are issued by third parties based on existing stock shares. Therefore, they do not increase the issued capital or dilute the earnings of the company as a warrant do. Call warrants have maturity dates of not more than two (2) years

The table below shows Foreign Call Warrants that currently traded in Bursa Malaysia together with its maturity dates and exercise price as of 18th August 2010.

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warrant

Previously we look at Warrants, there are another type of warrants traded in Bursa Malaysia. We call it Call Warrants. Below are short brief explanation about Call Warrants.

Call Warrants give a right, but not an obligation, to buy a fixed number of stock shares at a specified price within a limited period of time. But unlike warrants, call warrants are issued by third parties based on existing stock shares. Therefore, they do not increase the issued capital or dilute the earnings of the company as a warrant do. Call warrants have maturity dates of not more than two (2) years

The table below shows Local Call Warrants that currently traded in Bursa Malaysia together with its maturity dates and exercise price as of 10th August 2010.

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warrant

I guess some of you like to invest in Warrants instead of normal shares. It you do, better watch out the maturity dates or you will lose your money. Below are short brief explanation about Warrants.

Warrants give the holders the right, but not an obligation, to subscribe for new ordinary stock shares at a specified price during a specified period of time. The warrants are issued by the company. Warrants have a maturity date (up to 10 years) after which they expire worthless unless the holder had exercised to subscribe for the new shares before the maturity date.

The table below shows Warrants that currently traded in Bursa Malaysia together with its maturity dates and exercise price as of 1st August 2010.

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This article will introduce us to the pricing and risk of structured warrants. It will show how the price of a warrant relates to the underlying share and identify significant features that contribute to the valuation of a warrant. It will also stress some important risk aspects that investors must be aware of.

How the price of a warrant relates to the underlying share?

Generally, a warrant’s price is closely connected to the behaviour of the underlying share. By behaviour, we mean bow volatile the underlying share is and whether it is moving in a favourable direction for the warrant holder.

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