Getting Started with CitiFirst
What are Warrants?
Warrants give investors an alternative way to borrow to invest in some of Australia’s leading companies and a variety of other underlying assets, such as, indices, currencies, commodities and listed managed investments.
Warrants are complex financial instruments. Warrants can offer investors synthetic exposure to either rising or falling markets for a smaller portion of capital. They can offer leveraged participation in the underlying asset or the potential to hedge against market declines.
The warrants market continues to grow in Australia. This growth is driven both by increasing volumes in the well-established products such as trading warrants, as well as the interest in new, innovative products such as MINIs. A variety of warrants are available, can be traded in small size and are listed on the Australian Stock Exchange (ASX).
Broadly, there are two types of warrants:
Warrants traded on the ASX market since 1991 and are issued by some of the leading investment banks in the world and Australia.
There are many types of warrants, each with different characteristics, risk profiles, leverage and terms. This provides investors with a lot of choice and as such you should be sure you take time to learn and understand how to best use warrants when making your investment decisions. The ASX and warrant issuers such as Citi offer a range of resources such as online courses and booklets to help you understand the benefits, risks and uses of warrants.