Reasons to invest in warrants with nabtrade
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Access
Access all warrants on the ASX and Cboe.
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About warrants
Most warrants offer a degree of gearing and give the warrant holder the right but not the obligation to buy, sell or participate in the performance of an underlying investment, before or on the expiry date.
Being a derivative security, warrants derive their price from an underlying asset such as shares and exchange-traded products, a share price index, debt, currencies, or commodities.
Broadly, there are two types of warrants: investment warrants and trading warrants.
Investment warrants
- Why are they used?: Borrow to invest in shares and increase exposure to potential capital growth, dividends and franking credits.
- Investment time-frame: Medium to long term.
- Key benefits: Leverage and no margin calls.
- Used by: Self-managed super funds and investors.
Trading warrants
- Why are they used?: Trade the rise or fall of shares, indices, commodities and currencies.
- Investment time-frame: Short to Medium term.
- Key benefits: Leverage and no margin calls.
- Used by: Experienced investors and traders.
Benefits
Leverage
Most warrants carry a degree of leverage, so they can give you the opportunity to magnify gains depending on the performance of the underlying asset/s.
Lower initial capital
You can gain exposure to the performance of the underlying investment(s) for less money than having to buy it outright.
Risk management
Some types of call and put warrants can expire worthless, however the loss is limited to the invested capital.
Risks
Market risk
The market price of warrants is affected by movements in the underlying share price, and broader economic and market conditions.
Issuer risk
Each warrant is a contract between the warrant issuer and the warrant holder. The warrant holder is therefore exposed to the risk that the issuer will not perform its obligations under the warrant.
Time decay
Warrants are decaying assets so it’s important to monitor expiry dates and know when to exercise a warrant.
Pricing
| Trade size | $1,000 | $5,000 | $10,000 | $20,000 | Over $20,000 |
| Brokerage | $9.95 | $14.95 | $19.95 | $19.95 | 0.11% of trade value |
Get started with nabtrade
Every new nabtrade customer receives:
- A domestic trading account
- An international trading account
- An integrated cash account
Additional service options include:
- nabtrade High Interest Account
- nabtrade IRESS ViewPoint
- NAB Margin Loan
- Self Managed Super Fund setup and management services
Get started today
- Apply - Complete the application form - you can select from an Individual, Joint, Company or SMSF/Trust account.
- Add cash to your account - watch the tutorial.
- Start trading - Login to nabtrade on desktop or download our app.
Funding options for warrants
There are two ways to fund your investment:
Add cash to your account
Every nabtrade account comes with a linked cash account.
Borrow to invest
With a NAB Margin Loan you can borrow to invest.