The ASX has devised the following strategy library – it contains a collection of warrant strategies to explain how different types of warrants can be used in different market environments. Sometimes you can use more than one warrant type to achieve the same investment objective (for example using either trading warrants or instalments to get leveraged exposure to market movements).
The discussion of each strategy includes the investment objectives, how the strategy is constructed, relevant examples, and benefits and risks. The following strategies are broken into the reasons to invest in warrants:
New product categories
Applications of technical analysis for warrant strategies
Applications of fundamental analysis for warrant strategies
Leverage
Income
Diversification
Protection
Other topics
Self Managed Super Fund (SMSF)
Note that for the purpose of simplicity, transaction costs, tax considerations and the cost of funding are not included in the ASX examples.