When choosing a warrant, we suggest that investors may want to take the following steps into their consideration:

1. TAKE A VIEW ON THE UNDERLYING SHARE OR INDEX: To choose a warrant you should first look at the nature and performance of the underlying shares. This will assist in enabling you to make an informed decision about the anticipated movement of the stock.
2. TIMEFRAME: Your selection will be further narrowed by the time frame of your view. Generally you may try to select a warrant that matches the intended time frame for your trade. Shorter dated warrants will tend to provide more gearing, giving you more bang for your buck. However these warrants will tend to decay at a faster rate. In theory, longer dated warrants tend to be less risky but will require a greater outlay and are generally less responsive.
3. GEARING: Next you may look for a warrant with an appropriate gearing level. The two things to consider are the strength of your view and your appetite for risk. Effective gearing is one of the most useful multiples for this purpose. The higher the multiple, the greater your exposure and the higher your returns or losses will generally be.
4. IMPLIED VOLATILITY: Lastly, you should examine closely the warrant's Implied Volatility.  You should consider it against other similar warrants and against the historical volatility of the underlying share and warrant.  Generally speaking, the higher the Implied Volatility the higher is the relative price of the warrant.

One more important thing to remember. As every warrant issuer has a designated market maker that is responsible for providing liquidity for the warrant. It is important that you choose a warrant issuer that you are confident will provide you with a fair price and sufficient liquidity for you to enter and exit your trades.

Under normal market conditions, investors may consider using this process as a general approach for selecting a warrant. Warrants are a volatile instrument and their variables are constantly changing. If are uncertain about any aspect of investing in warrants should contact your stockbroker or professional advisor prior to investing.

While Macquarie Capital Securities (Singapore) Pte Limited ("MCSSPL") provides the information in good faith and derived from sources believed to be reliable, MCSSPL does not represent or warrant the completeness, reliability, accuracy, timeliness or fitness for any purpose of any of the material and it accepts no responsibility for the accuracy, completeness or timeliness of the information.

This internet site is produced by 'Macquarie Warrants Singapore - Macquarie Capital Securities (Singapore) Pte Limited (Registration No 198702912C)', holder of a capital markets services licence under the Securities and Futures Act, Chapter 289 of Singapore. The information on this internet site is directed and available to residents of Singapore only and is not provided to any person who is a resident of the United States or any other country. Any material provided on this internet site, including any indicative terms are provided for information purposes only and do not constitute an offer, a solicitation of an offer, or any advice or recommendation to conclude any transaction (whether on the indicative terms or otherwise). We recommend you obtain financial, legal and taxation advice before making any financial investment decision. The price of warrants may go down as well as up and there is a risk that an investor may lose some or all their investments. Past performance is not indicative of future performance.

Please visit the following webpage: Company Disclosures for disclosure of corporate finance relationship with the Macquarie Group.