Deal in Traditional Warrants, Covered Warrants and other securitised derivatives listed on the London Stock Exchange.
You should be aware that special risks apply to dealing in warrants and other such complex instruments. These risks are documented in a formal risk warning notice. For your protection, and to satisfy the regulations, it is important that you read and understand the contents of this warning and that you complete our appropriateness assessment before we can permit you to deal in complex instruments.
Warrants give you the right (though not an obligation) to purchase shares at a fixed price for a specified period of time. A traded instrument, the price of the Warrant is related to the price of the underlying investment: typically it would be higher than the current share price. The closer the warrant gets to its expiry date, the closer its price gets to the underlying share price.
Covered Warrants are issued by large financial institutions, principally Société Generalé, and give you the right to buy or sell existing shares at a fixed price by a certain date. 'Covered' relates to the requirement of the issuer to hold (or hedge) a sufficient amount of the underlying asset to cover the issue. However, Covered Warrants are overwhelmingly cash rather than physically settled so investors need never take delivery of the asset, as a result they are exempt from stamp duty. Covered Warrants automatically exercise at expiry, are traded on the stock exchange, and are CREST settled (T+3) through your account in the normal way.
Listed CFDs combine the flexibility of a CFD (Contract for Difference) with the price transparency of a London Stock Exchange listing. Most importantly, a Listed CFD embeds a Guaranteed Stop Loss at no extra cost, which means you can never lose more than your initial margin payment, no matter how badly markets move against you.
Issued by a range of investment companies such as RBS, Barclays Capital and Société Generalé, Listed Structured products use different financial instruments such as futures and options to create investments that provide you with a level of exposure to stock market gains coupled with guarantees to limit losses or to lock in gains as the market rises.
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