The diagram shows a typical name of an index warrant.
First term: The underlying that the warrant follows and tracks. In this case, it is tracking the index, Straits Times Index (STI).
Second term: This can be called the strike price or the exercise price. For a company warrant, the strike price is not shown in its name, i.e. SIA SGA eCW080121.
Third term: Shows the issuer who is usually a bank. Not in order of size or merit, the major warrant issuers (and their warrant name codes in brackets) in Singapore are
- Societe Generale (SG), French
- Deutsche Bank (DB), German
- BNP Paribas (BNP), French
- Macquarie (MBL), Australian
- Merrill Lynch (MER), U.S.
- Rabobank (RB), Dutch
- ABN Amro (AA), Dutch
Fourth term: European or American style. In Singapore, only European style warrants are issued but in other countries, you may find American style warrants. The difference between the two is that for the latter, the holder can exercise the warrant between the listing date and expiry date. As compared to the European style, which can only be exercised only at maturity.
Fifth term: Can be either be call warrant (CW) or put warrant (PW). CW – you expect the underlying price would be higher than strike price. PW – you expect the underlying price to be lower than strike price.
Sixth term: Shows the maturity or expiry date of this particular warrant. After this date, the warrant is worthless.
Sometimes, there may be an extra letter at the end of the warrant name.
For e.g., STI2300SGAeCW060330B
The letter at the end is to notify investors that this particular issuer has issued more than one warrant on the same underlying and maturity, but with a different strike price.
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