The Standard Bank of South Africa Limited (�Standard Bank�) is pleased to launch an innovative new product called Reset Warrants. Reset warrants give investors added security when dealing in the warrant market.
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What are Reset Warrants?
A Reset Warrant is a derivative, meaning that its value is derived from another underlying asset. Reset Warrants differ from Vanilla Warrants in that they have a pre-determined reset date on which the strike price of the warrant could change in an investor�s favour. Reset Warrants are available as call warrants listed over individual indices or shares traded on the Johannesburg Stock Exchange Limited (�JSE�).
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The reset date is an observation date on which the strike of a call warrant could decrease to the prevailing market level if the underlying price is below the warrant�s initial strike price. This increases the probability of the warrant ending �in the money�, and effectively gives investors a second chance when an anticipated move in the underlying asset does not occur as initially expected. Reset Warrants therefore give investors a degree of insurance against the market moving in the opposite direction to their view.
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Prior to the reset date, Reset Warrants will lose their value at a slower rate than Vanilla Warrants when the market moves against investors. Once the reset date has passed, Reset Warrants behave like Vanilla Warrants.
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Learn More
Click here to Download the Reset Warrants Brochure
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