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Definition

Warrants are securities traded on the JSE. They are derivatives that closely resemble options and include the right but not obligation to buy (call), sell (put) or participate in the performance of an underlying instrument. They are either "American", which means they can be exercised at any time up to the expiry date, or "European", which means they can be exercised only on a specific date - typically the expiry date. They have a limited time for which they are listed on the JSE and they all have an expiry date. They are issued on ordinary shares, baskets of shares, indices and bonds and serve a particular purpose in trading, but have high risk associated with the trading decision. The main difference between an option and a warrant is that a warrant involves a new issue of shares by the company itself. To read more about warrants traded on the JSE go to: <a href="https://www.jse.co.za/content/JSEEducationItems/IntroductionToWarrants.pdf">https://www.jse.co.za/content/JSEEducationItems/IntroductionToWarrants.pdf</a>

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