ASX Currency Warrants
The Australian Dollar is an actively traded currency around the world, but high minimum amounts for trading spot and futures contracts can make this a difficult market for retail investors to access.
Currency warrants provide investors and traders with a simple cost effective investment alternative that allows investors to take a view on the AUD and how it will move in relation to the USD. They offer exposure to an underlying currency by giving you the right to exchange an amount of foreign currency for Australian dollars on or before the expiry date.
Key benefits of Currency Warrants:
- A convenient short-term investment or hedging instrument - with leveraged exposure
- Trade based on your view of how the AUD will move relative to the USD. This may be either positive for a rising - AUD (Call Warrant) or negative for a falling AUD (Put Warrant).
- ASX-listed, settled through CHESS
- One initial upfront payment and no margin calls.
- Minimum loss is limited to the initial investment amount
- One Currency Warrant gives exposure to AUD10.00
Risks of Curency Warrants:
Since they provide leveraged exposure movements in the underlying exchange rate will have a greater impact in percentage terms on your profits and losses
Price movements in the currency warrant may not be on a one for one basis with the underlying exchange rate.
How to trade ASX Currency warrants:
Prior to trading ASX currency warrants you will have to read a copy of the ASX Warrants Booklet (PDF 2.5MB) and complete a warrant client agreement form with your broker.
Clients can trade currency warrants via their standard equity account. Contact your broker for further information about trading currency warrants.
For more information view the Currency Warrants PDS (PDF 1MB)