Wednesday, June 18, 2008

Today I attended a seminar on the topic of investment warrants by Macquarie. This is introduction to investment warrants for me.

There are differences between trading warrants and investment warrants. Investment warrants are long dated up to 1 year plus and they are issued deep in-the-money. They have comparatively lower gearing & premium. You can choose cash or physical delivery of share at expiry for investment warrants and you also entitle to net ordinary dividend equivalent payments announced by underlying stock. These investment warrants are suitable for longer term investment.

Trading warrants are typically short dated, less than 3 months and they are generally issued out-of-the-money. Trading warrants have comparatively higher gearing & premium and only allow cash settlement at expiry date.

Investment warrants is identified with the warrant code of ‘i’ in front of usual Call or Put Warrant code (e.g. SingTelMBLiCW090703).

You can check out Macquarie Warrants website for live pricing and upcoming hotshot contest in July (simulated real-time trading contest).

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