Perbedaan Waran dan Right Issue

Summary

In this video, Ari Setiawan explains the concept of warrants in the stock market, comparing them to rights issues. A warrant is a right to purchase shares or bonds at a predetermined price, often issued as a bonus by companies during their IPOs to attract investors. Unlike rights issues, which typically have shorter expiration periods, warrants can last for several years. Warrants often mirror the price movements of the underlying stock, rising or falling in tandem. The process for exercising warrants is also discussed, with instructions on how to redeem them via an online trading platform.

Takeaways

• 😀 Warrants are rights to purchase stocks or bonds at a predetermined price set by the company.
• 😀 Warrants are similar to rights issues but generally have a longer validity period.
• 😀 Rights issues usually last for a short period (e.g., one week), whereas warrants can last for several years.
• 😀 Warrants are often issued by companies during an IPO or listing to attract buyers.
• 😀 Warrants and rights issues both carry similar risks, but their duration and trading periods differ.
• 😀 Warrants tend to be more active when the underlying stock experiences significant price movements.
• 😀 The price movement of a warrant often mirrors that of the underlying stock, rising or falling with it.
• 😀 To redeem warrants, users must follow the redemption process, similar to rights issues, through a designated platform.
• 😀 The redemption process for warrants involves selecting the number of warrants to redeem and confirming the application.
• 😀 Ensure that the redemption history shows a successful transaction before the expiration date of the warrant.

Q & A

What is a warrant in the context of stocks and bonds?

A warrant is a financial instrument that gives the holder the right, but not the obligation, to purchase stocks or bonds at a predetermined price set by the issuing company.

How does a warrant differ from a rights issue?

A warrant differs from a rights issue mainly in its duration. While a rights issue typically lasts for a short period (e.g., a week), a warrant can be valid for a much longer period, sometimes lasting years.

Why do companies issue warrants during an IPO?

Companies issue warrants during an IPO (Initial Public Offering) as a bonus to attract investors to purchase the shares. This is meant to make the IPO more appealing.

What are the similarities between a warrant and a rights issue?

Both warrants and rights issues give investors the opportunity to purchase additional shares or bonds, typically at a fixed price. However, their timing and duration differ.

What happens to the value of a warrant when the underlying stock price changes?

The value of a warrant is usually closely tied to the price movement of the underlying stock. If the stock price increases, the value of the warrant typically increases as well, and if the stock price decreases, the value of the warrant generally decreases.

How long can a warrant remain valid?

A warrant can remain valid for a long period, sometimes several years, unlike a rights issue which typically lasts for a short time, like one week.

When is the best time to exercise a warrant?

The best time to exercise a warrant is typically when the underlying stock price has risen significantly, making it advantageous to purchase the stock at the pre-determined price set by the warrant.

What is the process to exercise a warrant?

To exercise a warrant, you need to go to the relevant section in your trading platform (for example, '4205' in the case of the video mentioned), select the number of warrants you wish to redeem, and apply. Ensure the transaction history shows that it has been successfully processed.

What happens if you don't exercise a warrant before it expires?

If you don't exercise a warrant before its expiration date, you lose the right to purchase the underlying stock or bond at the predetermined price, and the warrant becomes worthless.

What role do warrants play in attracting investors to an IPO?

Warrants are issued as incentives during an IPO to make the offering more attractive to investors, giving them a potential opportunity to purchase shares or bonds at a favorable price in the future.