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What are warrants? Warrants are financial instruments issued by banks and other institutions and are traded on ASX. They are very broadly split into investment-style products and trading- style products. Warrants are a form of derivative that is, they derive their value from another 'thing' (underlying instrument).
Investing in Warrants 6 Even so, warrants offer a viable option for private investors because the cost of ownership is usually low and the initial investment needed to command a large amount of equity is relatively small.
A warrant agreement is an agreement to purchase stock, also called a stock warrant. The agreement provides one party the right to purchase a company's stock at a specific price and at a specific date.
The easiest way to exercise a warrant is through your broker. When a warrant is exercised, the company issues new shares, increasing the total number of shares outstanding, which has a dilutive effect. Warrants can be bought and sold on the secondary market up until expiry.
You can buy and sell Warrants on the ASX and Cboe during normal market hours via your Commsec Trading Account.