A Beginner’s Guide: Call Warrants Basics
A call warrant is a leveraged financial instrument which derives its value from the value of an underlying security. A call warrant can provide exposure to the underlying security for a fraction of the underlying securities price.For a physical-settled call warrant, the warrant holder has the right, but not the obligation to buy the underlying security from the issuer at a predetermined price or Exercise Price at expiry or at anytime during the tenure of the call warrant.For a cash-settled call warrant, the warrant holder can exercise at expiry or anytime within the tenure of the warrant to receive a cash payment based on the positive difference between the underlying security price and Exercise Price of the call warrant, adjusted by the Exercise Ratio and any other incidental charges.
American - Gives the warrant holder the right to exercise at anytime before or on Expiry Date
European - Gives the warrant holder the right to exercise only on Expiry Date
The date on which the ability to exercise the call warrants expires.
Taken from CIMB portal.
5.50 pm : Happy Father's Day. Being father giving me sense of responsibilities. I m glad to be a father of my two lovely kids.
I was speaking about Warrants and Call-Warrants with JL last night. I m also a trader when I m free, so I do buy these highly leveraged financial in struments.
Basically, I will like to see myself as 'investors' ... so, FA is significantly important. Putting 80% of my money into stocks with good fundamentals or prospects,I feel 'safe'. But, it is OK to place 20% of my funds playing with these.
If you know-how, you have reduced substantially your RISK and manage to conquer your fears. Nothing could replace experiences, so being NEW to markets and a novice, I definitely have much more to learn.
Here, I will like to thank MANY who have guided me indirectly and rendering supports whenever needed.