- Warrant education
- Index warrants
What is an index warrant?
An index warrant is a structured warrant (“SW”) that is issued over an underlying index e.g. the Hang Seng Index or the FTSE Bursa Malaysia KLCI. The index call warrant tracks the performance of the underlying index i.e. it will tend to increase in value when the underlying index increases, while index put warrants move in an opposite direction to the underlying index, meaning it tends to increase in value when the underlying index decreases.
Click on a tile below to learn more about each underlying index.
Hang Seng Index
More info
Hang Seng TECH Index
More info
FTSE Bursa Malaysia KLCI
More info
iShares China A50 ETF
More info
The Standard & Poor's 500 Index
More info
The NASDAQ-100 Index
More info
The Dow Jones Industrial Average Index
More info
Live matrixVisit the Live Matrix page to see how you can utilize this powerful tool to track the movements of your index warrants. View Live Matrix |
Want to know more?
Click on a section below to get more in depth information on warrants.
All data sourced from Bloomberg and the official websites of the underlying index sponsor or ETF manager (as applicable) as of December 2021.
Index warrants issued by Macquarie
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The Standard & Poor's 500 index
The Standard & Poor's 500® Index (SP500) is widely regarded as the best single gauge of large-cap U.S. equities and is one of the most followed equity indices in the world. There is over USD 13.5 trillion benchmarked to the SP500 (as of 31 December 2020) and it captures approximately 80% of the U.S. market capitalization. The index tracks 500 of the largest companies listed on the New York Stock Exchange and the NASDAQ including, Apple Inc, Amazon, Johnson and Johnson, Microsoft Corp, Facebook Inc, etc.
Trades 23 hours
Trading in S&P 500® futures covers the full trading hours of Bursa Malaysia
Over $13.5 trillion
in assets benchmarked to the index
Captures ≈ 80%
of U.S. equity market capitalization
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S&P 500 warrants issued by Macquarie
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The NASDAQ-100 Index
The NASDAQ-100® Index (“NDX”) is one of the world’s distinguished large-cap growth indexes and is home to some of the world’s most innovative companies including Apple, Google, Intel and Tesla. The index includes 100 of the largest U.S. and international non-financial companies listed on the NASDAQ Stock Market based on market capitalization. The index reflects companies across major industry groups including computer hardware and software, telecommunications, retail/wholesale trade and biotechnology, and does not contain securities of financial or investment companies.
100 of the largest
U.S. and international non-financial companies based on market capitalization
Houses innovative companies
such as Apple, Google and Tesla
Heavy allocation
to top performing industries like Technology and Consumer Services
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NDX warrants issued by Macquarie
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The Dow Jones Industrial Average Index
The Dow Jones Industrial Average® Index (“DJIA”) is a price-weighted measure of 30 U.S. blue-chip companies covering all industries except for transportation and utilities. Aside from being the most recognizable stock indicator in the world, it is also the most widely quoted indicator of U.S. stock market activity and the oldest continuous barometer of the U.S. stock market with a history of more than 100 years.
30 U.S. blue-chip companies
covering all industries except for transportation and utilities
Most widely quoted
indicator of U.S. stock market activity
Oldest
continuing U.S. market index
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DJIA warrants issued by Macquarie
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iShares FTSE China A50 ETF
The iShares FTSE China A50 ETF (“China A50 ETF”) is an exchange traded fund listed on the Stock Exchange of Hong Kong (SEHK), whose movement closely corresponds to the performance of the FTSE China A50 Index. The index is designed to represent the performance of the mainland Chinese market through the 50 largest A Share companies listed on the Shanghai and Shenzhen stock exchanges.
Net assets
of over RMB15 billion
FTSE China A50 Index
comprises the top 50 A-Share companies by market capitalization
Provides access
to movements in the China A-Share market
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China A50 ETF warrants issued by Macquarie
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Hang Seng Index
The Hang Seng Index (“HSI”) is the most widely quoted performance indicator of the Hong Kong share market, and one of the most watched indexes in the region. Comprising 50 of the largest shares on the Hong Kong exchange, it tracks the movement in the Hong Kong market and is very closely linked to the Chinese economy. Many investors across the world use the HSI as a proxy to invest into China.
Comprises 50
of the largest and most liquid stocks listed on the HKEX
Captures major sectors
with constituents grouped into Finance, Utilities, Properties, and Commerce and Industry
Tracks the HK market
and is closely linked to the Chinese economy
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HSI warrants issued by Macquarie
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Hang Seng TECH Index
The Hang Seng TECH Index (“HSTECH”) comprises the largest companies listed on the Hong Kong Stock Exchange which have high exposure in selected technology themes. First launched in July 2020, the more notable constituents include well-known names such as Alibaba, Tencent, Meituan and Xiaomi (commonly referred to as ‘ATMX’) which have a combined weight of more than 30%. Investors will be able to gain exposure to these heavyweights as well as a diverse spectrum of themes within the tech sector including internet, fintech, cloud, e-commerce and digital while minimizing any single stock specific risk.
View more information on the HSTECH here.
Note: The chart below includes back-tested data compiled by the Hang Seng Indexes Company Limited for the period before the HSTECH’s launch date of 27 July 2020.
Higher volatility
than the HSI on average
Ease of access
Trade warrants on Bursa using your existing trading account
Broad coverage
of the technology sector, including the popular ATMX!
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HSTECH warrants issued by Macquarie
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FTSE Bursa Malaysia KLCI
The FTSE Bursa Malaysia KLCI (“FBMKLCI”) is comprised of the top 30 companies by market capitalization on the Bursa Malaysia Main Market, including Maybank, Tenaga Nasional, Public Bank, Sime Darby and other household names. It is the headline index for the Bursa and is the most widely used benchmark to track the performance of the Malaysian market.
The FBM KLCI futures (“FKLI”) are listed and traded on the Bursa Malaysia, the FBMKLCI warrant price is linked to the movements in the futures price over time and at expiry settlement will be based on the closing level of the relevant futures expiry.
Comprises 30
of the largest companies on Bursa Malaysia
Benchmark
to track the performance of Malaysia’s stock market
Household names
such as Maybank, Tenaga Nasional and Sime Darby
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FBMKLCI warrants issued by Macquarie
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What is an index warrant?
An index warrant is a structured warrant (“SW”) that is issued over an underlying index e.g. the Hang Seng Index or the FTSE Bursa Malaysia KLCI. The index call warrant tracks the performance of the underlying index, meaning i.e. it will tend to increase in value when the underlying index increases. Meanwhile, index put warrants moves in an opposite direction to the underlying index, meaning it tends to increase in value when the underlying index decreases.
The Standard & Poor’s 500 index (“S&P 500®”)
The S&P 500® is widely regarded as the best single gauge of large-cap U.S. equities and is one of the most followed equity indices in the world. There is over USD 7.8 trillion benchmarked to the S&P 500® and it captures approximately 80% of the U.S. market capitalization. The index tracks 500 of the largest companies listed on the New York Stock Exchange and the NASDAQ including, Apple Inc, Johnson and Johnson, General Electric, Microsoft Corp, Facebook Inc, etc..
The Standard & Poor’s 500 index (“S&P 500®”)
The iShares FTSE China A50 Index ETF (“China A50 ETF”) is an exchange traded fund listed on the Stock Exchange of Hong Kong (SEHK), whose movement closely corresponds to the performance of the FTSE China A50 Index. The index is designed to represent the performance of the mainland Chinese market through the 50 largest A Share companies listed on the Shanghai and Shenzhen stock exchanges.
Hang Seng Index (“HSI”)
The HSI is the most widely quoted performance indicator of the Hong Kong share market, and one of the most watched indexes in the region. Comprising 50 of the largest shares on the Hong Kong exchange, it tracks the movement in the Hong Kong market and is very closely linked to the Chinese economy. Many investors across the world use the HSI as a proxy to invest into China.
FTSE Bursa Malaysia KLCI (“FBMKLCI”)
The FBMKLCI is comprised of the top 30 companies by market capitalization on the Bursa Malaysia Main Market, including Maybank, Tenaga Nasional, Public Bank, Sime Darby and other household names. It is the headline index for the Bursa and is the most widely used benchmark to track the performance of the Malaysian market.
The FBM KLCI futures (“FKLI”) are listed and traded on the Bursa Malaysia, the FBMKLCI warrant price is linked to the movements in the futures price over time and at expiry settlement will be based on the closing level of the relevant futures expiry.
Why trade index warrants?
The key advantages of index warrants are:
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Allow you to take a view on the general market direction
By gaining access to the index, you remove the need to select a share and instead take a view on the market as a whole.
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Able to profit from both rises and falls
Index warrants allow you to take either a bullish (call warrant) or a bearish (put warrant) view on the market. So you have the potential to profit from both rises and falls in the market.
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Get exposure to different markets
Index warrants allow you to get exposure to foreign markets like Hong Kong (e.g. the HSI Index) without having to leave the Bursa Malaysia.
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Hedge your share portfolio
Index put warrants allow you the potential to profit from downward movements in the market, making them a useful hedge for a diversified share portfolio.
How to trade index warrants?
Index call warrant
If you have a bullish view on the S&P 500®, you can buy a call warrant e.g. SP500-CA. Example as follow:
Index put warrant
If you have a bearish view on the FBMKLCI, you can buy a put warrant over FBMKLCI e.g. FBMKLCI-HW. Example as follow:
Assuming your view was right, if you have bought the put warrant instead of shorting the underlying index, you would have made a 12.5% return, almost 5 times that of the index level move.
These are examples of gearing at work and the advantage that warrants offer i.e. a greater potential profit as a percentage of your invested capital. However, gearing works in both directions, so greater potential returns also come with greater risk.
How to calculate the cash settlement amount at expiry?
Your index warrant will be automatically exercised if you hold it until expiry. If the Cash Settlement Amount (“CSA”) is positive, Macquarie will make a cheque payment to you within 7 market days after expiry.
The FX rate component takes into consideration the underlying indexes that are denominated in a foreign currency and not MYR.
Example of an S&P 500® call warrant:
Example of an FBMKLCI put warrant:
