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Warrant is an option that gives the holder the right but not the obligation to buy or sell
an underlying security at a specific price (exercise price) on or before a predetermined date
(maturity date).
Warrant allows you to benefit from a leveraged participation without having to buy the underlying securities.
These may be issued from a range of underlying securities including
equities, indices, commodities and currencies.
Warrants 101
There are two types of warrants in the market:-
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Company Warrant
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Warrants issued directly by a listed company and are exercisable into their own shares. This results
in share dilution.
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Structured Warrant
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Warrants usually issued by a third party (i.e.: investment bank, universal broker or financial
institution). There will be no dilution effect at the end of the exercise.
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Features and Benefits:-
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Call Warrant
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Warrants that give the holder the right to buy a given quantity of an underlying security at a
predetermined price, on or before a specific time.
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Put Warrant
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A Warrant that gives the holder the right to sell a given quantity of the underlying security at a
predetermined price, on or before a specific time. These Warrants have a fixed tenure and if not
exercised before their maturity date becomes worthless.
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European Style
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A Warrant holder who can only exercise his/her rights on the date of maturity.
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American Style
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A Warrant holder who can exercise his/her rights anytime before or upon maturity.
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For more information, log on to http://www.nagawarrants.com/home.html
Disclaimer: This sheet includes information only and should not be considered as investment advice or any form of
recommendation to purchase or sell any warrants. The price of warrants may fall in value as rapidly as it may rise
and you may sustain a total loss of your investment. You should therefore ensure that you understand the nature of
the warrants and, where necessary, seek advice before you invest in any warrants.
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