What Are Structured Warrants?
What are structured warrants, how derivatives and leverage work, and how settlement happens at maturity — a plain-English introduction with a scroll-through visual guide.
From Derivatives to Structured Warrants
Scroll to walk through the five ideas that build up to a structured warrant.
What are derivatives?
Derivatives are financial contracts whose value is derived from an underlying asset — a stock, an index like the HSI, a commodity, or a currency. Instead of owning the asset directly, a derivative lets you gain (or hedge) exposure to its price movement.
Warrants meaning: a right, not an obligation
A warrant gives the holder the right, but not the obligation, to buy or sell an underlying asset at a fixed strike price on or before a set maturity date. That's the warrants meaning in finance, whether it's a company warrant or an exchange-listed structured warrant.
Call warrant vs put warrant
A call warrant gains value as the underlying rises above the strike price. A put warrant gains value as the underlying falls below the strike price — the call warrant vs put warrant choice is simply a bet on direction.
Leverage and gearing
Because a warrant costs a fraction of the underlying's price, a small move in the underlying can translate into a much larger percentage move in the warrant — this amplification is called gearing, and it cuts both ways.
What are structured warrants?
Structured warrants are issued by a financial institution (Macquarie, RHB, Kenanga, CGS, and others), listed on an exchange such as Bursa Malaysia or HKEX, and cash-settled at maturity — no exercise action needed from the holder.
What are structured warrants?
Structured warrants are exchange-listed derivatives issued by financial institutions — such as Macquarie, RHB, Kenanga, and CGS — rather than by the underlying company itself. They cover single stocks, indices like the HSI, or ETFs, and are cash-settled at maturity.
Why trade structured warrants?
Structured warrants let traders take leveraged, defined-risk directional views (via call or put warrants) on an underlying without the capital outlay of buying it outright, and without needing a margin account the way futures or CFDs require.
Settlement of structured warrants
Most Bursa Malaysia and HKEX structured warrants are cash-settled: on expiry, in-the-money warrants automatically pay out the cash difference between the settlement level and the strike, adjusted for the entitlement/conversion ratio — no exercise action is needed from the holder.
FAQ
What are structured warrants?
Structured warrants are exchange-listed derivatives issued by financial institutions (like Macquarie, RHB, Kenanga, CGS) rather than the underlying company itself, covering single stocks, indices like the HSI, or ETFs.
Why trade structured warrants instead of the underlying?
They offer built-in leverage and a defined maximum loss (the premium paid), letting traders express a directional view with less capital than buying the underlying outright.
How are structured warrants settled?
Most Bursa Malaysia and HKEX structured warrants are cash-settled automatically at maturity — in-the-money warrants pay out the cash difference, no exercise action needed.
See the structured warrants screener or browse more learn articles.