What is a Warrant?

Warrants are listed and traded on the ASX and Cboe. With Warrants, you can take advantage of the benefits of leverage and diversification to invest in some of Australia's major companies, managed investments and other underlying assets.

     
There are many types of Warrants, each with their own characteristics, risk profile and terms, offering you the flexibility to build a portfolio or trade market movements. Some Warrants may also be used to provide gearing within a Self-Managed Super Fund. Warrants you can trade through CommSec include Mini Warrants (MINIs) and Instalment Warrants.

Benefits

Leverage

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

Variety

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

Diversification

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

Listed and traded on the ASX and Cboe

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

No margin calls

Warrants are not subject to margin calls, due to the limited recourse nature of the leverage provided.

Limited risk

The limited recourse nature of Warrants means that the most you put at risk is your initial purchase price of the Warrant.

No loan documents

No credit checks or loan documents are required for Warrants.

Dividend income

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

Wide asset range

With Warrants you can gain exposure to a wide range of underlying assets including shares, indices, currencies and commodities. Refer to the issuer for specific information.

Risks

Leveraging can magnify losses

If the underlying asset prices moves against your position, the market price of the Warrant will fall by a larger percentage. It may fall as low as zero, but you cannot lose more than your original outlay.

Market risk

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

Specific risks

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

Issuer risk

You are exposed to the risk of the Issuer not meeting its obligations. 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 Warrants could change, which might adversely affect your investment.

Corporate actions

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

How they work

Market movements

Warrants provide you with a form of gearing that allows you to borrow to invest in some of Australia's leading companies and Exchange-Traded Funds or trade market movements in a variety of underlying assets. Warrants are listed on the ASX and Cboe so you can buy and sell them during normal market hours.
There are a range of different Warrants, and how each one works will depend on its individual features.

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 Warrant. Please refer to the Warrant issuer for the rates on each Individual Warrant.

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 most commonly issued over leading Australian shares and Exchange-Traded funds, however they can also be issues over many other asset classes including indicies, currencies, commodoties and international securities.

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

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.

There is a minimum $500 investment amount for purchases made on ASX and Cboe.

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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