Equity derivatives

Headline: INVESTMENT: Warrants still offer value

Link: http://finweek.com/2014/02/26/investment-warrants-still-offer-value/

First two paragraphs:

Warrants might again become popular. Retail options, or better known to you and me as warrants, have faded in the last decade and the question posed is if they still have a place for the local trader. When they were launched on the JSE in October 1997, they were the first geared product for private traders and as such became very popular, helped in large part by the dot-com bubble.

 

During the heyday of the bubble, warrants such as 1DDT (they had shorter codes back then) would occasionally do as much as R100m in trade in a single day, making it one of the top traded instruments on the JSE. But these days trade in warrants is typically a couple of million rand showing just how far they have fallen in terms of popularity. The decline has in large part been due to other derivatives being introduced coupled with the complexity of warrants. Single Stock Futures (SSFs) and Contracts for Difference (CFDs) as well as commodity futures, the new rand-based Quanto commodity futures, currency futures and the increasing popularity of Alsi Index futures have all played a part in reducing the appeal of warrants.

 

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