MINIs

MINIs are a highly leveraged share-tracking warrant. They enable investors to participate in the movement of an underlying asset on a one to one basis for a fraction of its price. MINIs offers unlimited upside returns with a safety net. They can be considered as a CFD - style product with an embedded stop loss feature that ensures that an investor cannot lose more than their initial outlay.

MINIs are American style instruments, meaning they can be exercised at any time. MINIs have the quality of being an open-ended contract for the purposes of trading. As a result, MINIs are low maintenance leveraged investments minimising the hassles of expiries and rollovers.

  • MINI Longs enable leveraged participation in rising equities, index markets, currency and commodity markets; and
  • MINI Shorts enable leveraged participation in falling equities, index markets, index markets, currency and commodity markets.

Features

Underlying assets Issued over Shares, indices, currencies and commodities
Term to expiry Open-ended no expiry date
Exercise style American
Exercise price Amended daily
Code abbreviation 6 letter code with the fourth letter being a K, Q or M
Initial payment Share price - exercise Price (equity MINI long)
Funding costs Charged on a daily basis if MINI held overnight
Settlement Deliverable or cash settled
Other features Limited recourse loan and stop loss level to limit losses to initial outlay

 

There are four issuers of MINIs – Citifirst, Credit Suisse, Macquarie & RBS. You can differentiate between the issuers by their issuer codes. The fifth letter of the warrant or issuer code for Citi is an O eg. BHPKOQ, the fifth letter for Credit Suisse is a C eg. BHPKCA, the fifth letter for Macquarie is an M eg. BHPKMA and  for RBS the fifth letter is a Z or an R. eg. BHPKZP or BHPKRP

 

* Note Traditional MINIs always have a K as the fourth letter. Guaranteed Stop Loss MINIs (GSL MINIs) have the fourth letter as an L and have a number of different features to traditional MINIs. For more on information on GSL MINIs  click here 

Citi MINIs brochures:

Credit Suisse MINI brochures:

Macquarie MINIs brochures:

RBS MINIs brochures:

  • Equity MINIs

    Equity MINIs track the price of an underlying share. The price of the MINI reflects the Intrinsic Value which equals the difference between the market price in the underlying asset and the Strike Price of the quoted MINI but not less than zero.

    Strike Price (or Financing Level) is the portion of the underlying price that the issuer funds on behalf of the Holder.

    Value of a MINI Long = Share Price - Strike Price
    Value of a MINI Short = Strike Price - Share Price

    An initial capital outlay is required in order to acquire a MINI. Funding Costs however are charged on a daily basis via daily incremental Strike Price changes, thus the Strike Price of a MINI is set daily and Funding Costs are added to the Strike Price for long investors and for short investors in most cases an interest credit is passed on to the investor via an incremental strike increase.

    Example - Equity MINI

    Warrant code BHPKOB
    Underlying asset BHP Billiton Ltd
    Exercise price $33.00
    Warrant Price $14.00
    Warrant type MINI Long
    Expiry date 31 December 2029
    Conversion ratio 1

    BHP is trading at $47

     Value of BHPKOB MINI Long:
    = $47 - $33
    = $14.00

    Index MINIs

    Index MINIs track the price of an undelying index. Currently MINIs are listed over the S&P ASX 200 futures index. The price of the Index MINI reflects the Intrinsic Value which equals the difference between the market price in the underlying asset and the Strike Price of the quoted MINI divided by the multiplier but not less than zero.

    Strike Price (or Financing Level) is the portion of the underlying price that the issuer funds on behalf of the Holder.

    Value of an Index MINI Long = (Level of Index Futures - Strike price) * Multiplier
    Value of an Index MINI Short = (Strike Price - Level of Index Futures) * Multiplier

    An initial capital outlay is required in order to acquire an Index MINI. Funding Costs however are charged on a daily basis via daily incremental Strike Price changes, thus the Strike Price of a MINI is set daily and Funding Costs are added to the Strike Price for long investors and for short investors in most cases an interest credit is passed on to the investor via an incremental strike increase.

    Example - Index MINI

    Warrant code XJOKZP
    Underlying asset S & P ASX 200 Index Futures Contract (SPI 200)
    Exercise price 4000
    Warrant Price $5.00
    Warrant type MINI Long
    Expiry date 31 December 2029
    Multiplier 0.01

    The S & P ASX 200 Index Futures contract is trading at 3800

    Value of XJOKZP MINI short:
    = (Exercise price (4000) - Index Futures Level (3500)) * Multiplier (0.01)
    = $5.00

    (PDR 312KB)