Instalment Warrant Mechanics

7 Pages Posted: 6 May 2013

See all articles by Antonie Kotze

Antonie Kotze

Financial Chaos Theory; Department of Finance and Investment Management

Date Written: November 1, 2010

Abstract

Instalment warrants are very popular in Australia and these instruments have been listed by Nedbank and Standard Bank in South Africa.

Instalments are financial products, that allow investors to gain direct exposure to shares by making a part payment upfront and delaying an optional final payment (or second instalment) until a later date (expiry date). This allows an investor to buy shares, and other securities, for a fraction of the current share price whilst receiving the benefits of capital growth and ordinary dividends.

Keywords: Warrant, Instalment, Exotic option, Option pricing, Put-call-parity

JEL Classification: G12, G13

Suggested Citation

Kotze, Antonie, Instalment Warrant Mechanics (November 1, 2010). Available at SSRN: https://ssrn.com/abstract=2261135 or http://dx.doi.org/10.2139/ssrn.2261135

Antonie Kotze (Contact Author)

Financial Chaos Theory ( email )

PO Box 16185
Doornfontein, 2028
South Africa

HOME PAGE: http://www.quantonline.co.za/

Department of Finance and Investment Management ( email )

PO Box 524
Auckland Park
Johannesburg, Gauteng 2006
South Africa

HOME PAGE: http://www.uj.ac.za

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