Gearing without margin calls

Take advantage of the benefits of leverage to invest in some of Australia's major companies and Exchange-Traded Funds with Instalment Warrants. Make one payment when you first invest, and immediately start enjoying the major benefits of share ownership. As a holder you can make the second payment at any time up until the Maturity Date of the instalment to take full ownership of the underlying securities.

With Instalment Warrants, you can increase your exposure to potential capital growth, dividends and franking credits, allowing you to build a more diversified portfolio.  You may also be able to use Instalment Warrants to borrow for investment within your Self-Managed Super Fund (SMSF).

Benefits

Buy shares in two payments

Buy ASX-listed securities in two payments. Make the First Instalment Payment then choose to make the Final Instalment  at any time up to the Maturity Date to take full ownership of the securities.

Leverage

Instalment Warrants offer investors a degree of leverage, where a small price change in the underlying securities can a mean a larger  percentage change in the value of your Instalment Warrant.

Increased dividend income

Receive dividends and franking credits for the underlying securities (subject to eligibility). Depending on the Instalment, you may receive dividends as cash or use them to reduce your Final Instalment. 

Diversification

Instalments Warrants offer the potential to diversify your investments and spread risk across your portfolio.

Variety

There are a variety of Instalment Warrants to suit your investing needs. Such variety includes how the interest is charged, how income is paid, and the time to maturity.

Listed and traded on the ASX and Cboe

Instalment Warrants are listed on the ASX and Cboe and are generally available over major Australian Shares and Exchange-Traded Funds (ETFs).

Borrow to invest in your SMSF

You may be able to use Instalment Warrants to borrow to invest in your Self-Managed Super Fund.

No margin calls

Instalment Warrants are not subject to margin calls, due to the limited recourse nature of the loan.

No loan documents

No credit checks or loan documents are required for Instalment Warrants.

Risks

Leveraging can magnify losses

If the underlying security's value falls, the market price of the Instalment Warrant will fall by a larger percentage. It may fall as low as zero, but you cannot lose more than your original outlay.

Changes in market variables

Changes to interest rates, volatility and dividends may adversely affect the value of your Instalment Warrant.

Specific risks

Each series of Instalment Warrants has specific risks. You should consider the Product Disclosure Statement (PDS) for each product before making any investment decision.

Issuer risk

You are exposed to the Issuer not performing its obligations. Instalment warrants are unsecured obligations,  not guaranteed by the ASX, the National Guarantee Fund, ASX Clear or any other person.

Changes to tax law

Tax legislation in respect to Instalment Warrants could change, which might adversely affect  your investment

Corporate actions

Corporate actions and extraordinary events could affect your investment. Instalment Warrant issuers may treat Corporate Actions differently. Check the Product Disclosure Statement for your series.

How they work

Instalment Warrants are a form of gearing, offering leveraged exposure to capital movements in the underlying security's price. During the course of your investment, you receive the benefit of dividends and franking credits associated with the underlying security. There are no margin calls. And if you choose not to make the Final Instalment, any losses are limited to your First Instalment.

  • You make a First Instalment by paying the market price on the ASX/Cboe
  • The issuer provides you with a limited recourse loan, known as the Final Instalment
  • Make the Final Instalment before the Maturity Date to take ownership of the underlying shares 
  • You can sell your Instalment Warrants on the ASX/Cboe (during market hours) throughout your investment

Rates and fees

Trade execution

Brokerage fee amount by transaction value1,2,3,4

Trade online (via website, mobile apps or other platforms) and settle your trade to a CDIA5 or CommSec Margin Loan5

$5.00 (Up to and including $1,000)

$10.00 (Over $1,000 up to $3,000 (inclusive))

$19.95 (Over $3,000 up to $10,000 (inclusive))

$29.95 (Over $10,000 up to $25,000 (inclusive))

0.12% (Over $25,000)

Trade online (via website, mobile apps or other platforms) and settle into a bank account of your choice

$29.95 (Up to and including $9,999.99)

0.31% ($10,000 and above)

Trades over the phone and deceased estates6

$59.95 (Up to and including $10,000)

0.52% (Over $10,000 up to $25,000 (inclusive))

0.49% (Over $25,000 up to $1,000,000 (inclusive))

0.11% (Over $1,000,000)

Trades requiring settlement through a third party6

$99.95 (Up to and including $15,000)

0.66% (Over $15,000)

1 Different brokerage rates apply to CommSec Pocket trades executed through CommSec Pocket App or CommBank App.

2 Alternative brokerage rates may be agreed from time to time and (if agreed to) will be payable under clause 22 of CommSec's Share Trading Terms and Conditions. If you are offered, and agree to a tiered brokerage rate, this may result in brokerage charges that differ from rates expressly disclosed within the CommSec FSG.

3 Unless otherwise indicated, where a fee or charge is expressed as a percentage, it refers to a percentage of the transaction value. For GST rounding reasons, the final brokerage fee may result in a slight variance from the stated or expected charge, which may exceed two cents for large trades.

4 Brokerage charged (shares, warrants, listed managed investments and derivatives): Brokerage at these rates applies each time you trade a stock, warrant, listed managed investment or derivative.

5 To be eligible, you must trade online, be CHESS Participant Sponsored with CommSec and settle your trades through either a Commonwealth Direct Investment Account (CDIA) or a CommSec Margin Loan.

6 Includes CommSec Margin Lending and Geared Investments Lending Trades and where the Commonwealth Bank exercises its rights under the loan terms and conditions.

Interest rates vary for each Instalment Warrant. Refer to the issuer for specific information. Depending on the type of Instalment Warrant all of your interest cost may be paid as part of your First Instalment Payment or it may be capitalised into the Final Instalment Payment.

Get started

Open a CommSec Share Trading Account to invest in Warrants

To start trading Warrants with CommSec, it is an ASX and Cboe requirement that you read the Understanding Trading and Investment Warrants (ASX) and Investing in Warrants (Cboe) booklets. You’ll also need to complete the Warrants Trading Agreement. To help you get started:

Already have a CommSec Share Trading Account?

If you have a CommSec Share Trading Account, you can review the required booklets and complete the Warrants Trading Agreement via the Service Centre. Login to CommSec below, go to Settings then Create a request. Search for Warrant Trading Agreement then follow the prompts.
Login now >

Don't have a CommSec Share Trading Account?

You’ll need to become a CommSec customer before investing in Warrants. Join now to open a standard Share Trading Account and select ‘Open a CDIA'1.
Join now >

Frequently asked questions

They are generally issued over leading Australian shares and Exchange-Traded funds.

You can buy and sell Instalment Warrants on the ASX and Cboe during normal market hours via your Commsec Trading Account.

No. Once you have made the First Instalment Payment (based on the ASX/Cboe market price) you are not obliged to make any more payments. You can choose to make a Final Instalment Payment to take full ownership of the underlying security. Depending on the Instalment Warrant, you may be able to make a payment to continue the Instalment until a later date.

Instalment Warrants are listed on the ASX and Cboe. You can view their pricing via your Commsec Account during normal market hours. Most issuers also provide indicative pricing on their websites or alternatively the ASX/Cboe websites.

CommSec will charge a brokerage fee - refer to our Rates and Fees.

Each issuer has information relating to their Instalment Warrants available on their website. The ASX provides online educational courses. Visit the ASX for further information.

Important Information

Warrants are financial instruments issued by banks and other institutions which are traded on ASX Limited and Cboe Australia Pty Limited. They are a form of derivative giving the holder the right to trade (Buy or Sell) or cash settle the underlying instrument (eg shares in a company, a currency, an index or a commodity or a managed investment) with the warrant issuer for a particular price at a particular time according to the terms of issue. Warrants are issued pursuant to a Product Disclosure Statement (PDS) which may be amended or supplemented from time to time. You should carefully consider the PDS before making any investment decision, including whether to acquire, or continue to invest in that product.

1 The target market for the Commonwealth Direct Investment Account (CDIA) can be found within the product’s Target Market Determination.

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© Commonwealth Securities Limited ABN 60 067 254 399 AFSL 238814 (CommSec) is a wholly owned but non-guaranteed subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945. CommSec is a Market Participant of ASX Limited and Cboe Australia Pty Limited, a Clearing Participant of ASX Clear Pty Limited and a Settlement Participant of ASX Settlement Pty Limited.

The information on this page has been prepared without taking into account your objectives, financial situation or needs. For this reason, any individual should, before acting on this information, consider the appropriateness of the information, having regards to their objectives, financial situation or needs, and, if necessary, seek appropriate professional advice.

CommSec does not give any representation or warranty as to the accuracy, reliability or completeness of any content on this page, including any third party sourced data, nor does it accept liability for any errors or omissions.

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