Buying and selling warrants
You can buy and sell warrants by placing an order with your broker, just as you would with shares
Warrants are traded in a similar way to shares. You can subscribe for warrants directly with the issuer when they are first issued, as well as buy and sell them on ASX. The buying and selling process is the same as for shares.
Warrants are traded through ASX-accredited brokers. You may already be using a broker to buy and sell shares. If he or she is active in advising on warrants, or is accredited to advise on warrants, there may be no need to look elsewhere. However, if your existing broker is not active in warrants, or accredited to advise on warrants, it is wise to seek out a specialist broker in this area.
Your broker must fulfil certain requirements before you can start investing in warrants. Your adviser will ask you to:
You should make sure you understand the specific terms of any warrant before investing. Warrant issuers are required to produce a disclosure document containing the terms for a warrant series. A disclosure document sets out information for investors to assess the risks, rights and obligations associated with the warrant and the warrant issuer’s capacity to fulfil its obligations. The disclosure document will also include information on how to exercise your warrant on or before the expiry date.
In addition to the terms, the issuer may have other obligations, for example, under the ASX Operating Rules. It’s important to read the relevant disclosure document and terms of issue before investing in a particular warrant series.
As with shares, you place an order to buy or sell warrants with your broker. You may find your orders may be filled by market makers. The market makers for warrants are typically the warrant issuers.
Warrants are issued with a six letter code.
The first three letters represent the underlying share or security.
The fourth letter displays the type of warrant.
The fifth displays the warrant issuer.
The sixth and last displays the warrant series.
There are many different types of warrants and each type can be identified by the fourth letter in the warrant’s six letter code.
| Fourth letter of code | Description |
|---|---|
| B | Bonus Certificate |
| E | Endowments |
| I or J | Instalments |
| S | Self funding instalments and structure investment products (SIPs - these include longer-term investment style products) |
| W, V, U or T | Trading style warrants including equity calls and puts, index calls and puts, currency calls and puts |
| X, Y or Z | Equity and index knock-out/barrier warrants and Capital Plus Warrants |
| K, M or Q | MINIs |
| L | Guaranteed Stop Loss MINIs |
| D | This is a temporary code assigned to a warrant trading on a deferred settlement basis due to a corporate action, reconstruction or a rollover |
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