Traditional corporate equity warrants
Introduction|
Course|
Q&As |
Recommended reading|
Quiz |
Introduction
Context
Warrants are for experienced investors who have an understanding of risk, and who want to exploit the gearing potential in warrants. This is one of the more hidden - and thereby inefficient - areas of the market, offering interesting opportunities to the shrewd investor.
Prior knowledge required
Very little prior knowledge is required, but the topic involves a fair bit of simple mathematics. Warrants should not be the starting point for a
novice investor, and so, although not required, a good knowledge and experience of ordinary share markets is desirable.
Contents
- Introduction
- What is a warrant?
- The warrant market
- Advantages of warrants over shares - the magic of gearing
- Further attractions of warrants
- Disadvantages of warrants
- Fundamentals - warrant terms
- Fundamentals - intrinsic value and parity ratio
- Basic analysis
- Analysis - time value and premium
- Analysis - gearing
- Analysis - break-even and capital fulcrum point
- Analysis -sample spreadsheets
- Analysis - summary
- Investing strategies
- Dealing in warrants
- Warrant exercise
- Further topics
- Further information
- Conclusion