Company Warrants

What are Company Warrants?

Company warrants are issued by companies on their own ordinary shares to raise capital for themselves. Their value depends on the value of the ordinary share which is the underlying security.

Warrants cost a fraction of the price of their underlying security and give the buyer the right (but not the obligation) to buy this underlying security at a predetermined price (the Strike or Exercise Price) on or before a predetermined date (the "Expiry" Date).

These products require you to have passed an appropriateness assesment before trading.

How do Company Warrants work?

Warrants give the same economic exposure to an underlying security without actually owning it, and cost a fraction of the price of the underlying security.

At the exercise date you can choose to buy the underlying security at the pre-determined price (strike or exercise price). At this point you will know what the actual value of the shares are. If you choose to buy the underlying security this is known as exercising the warrant (or exercising the rights attributed to that warrant).

How risky are Company Warrants?

  • The value of your investments can go down as well as up, you may not get back all the funds that you invest

  • Warrants are not suitable for everyone. You should not deal in warrants unless you understand their nature and the extent of your exposure to risk. You should have satisfied that they are suitable for you in light of your circumstances and financial position

  • Before trading you should fully understand the nature of warrants and your exposure to the risk involved

  • The geared nature of warrants means that a relatively small movement in the share price of the underlying asset will result in larger movements in the value of the warrant. Therefore company warrants provide the opportunity for greater returns than ordinary share dealing but also greater risk of potential losses

  • If you are in any doubt you should consult an independant adviser.

Liquidity risk
If there are insufficient buy orders, the market price of a warrant will be affected. There is a risk that you could not sell your warrants for a reasonable price.

Limited life of warrants
A warrant may become worthless if your expectations are not realised before it's expiry.

What does trading in Company Warrants cost?

Company Warrantss are traded like shares and are charged at normal online commission rates, which start from just £5.95 online. See rates and charges.

Which account should I choose to invest in Company Warrants?

You can invest in Company Warrants through our Share Dealing​ Account or SIPP account.

Existing customers can upgrade your account online to trade in Company Warrants. Login and go to My Profile > My Details and Preferences > Appropriateness Assessment Form.