The logic behind put warrants
A FEW weeks ago this column touched on structured warrants, which are essentially options on various underlying assets that are issued by financial institutions like Macquarie Bank.
Two types were described - calls that rise in value when the underlying asset rises, and puts, which gain value in a falling market. Because the majority of investors and traders would aim to buy low and sell higher, calls would be the more familiar - if you're bullish, then all you do is buy a call and wait for it to rise.
Puts however, are less intuitive and because of this, they warrant a closer look.
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