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This handbook provides a limited view from the other side of the warrant market. It is an excellent reference for understanding the theoretical structure of warrants, how they are priced by the warrant issuers, and how their idea of fair pricing changes. In part this is a very good background to warrants and ought to be used as a supplement to the risk disclosure warrant information provided to clients prior to obtaining approval to trade.

For those already trading warrants, the book is still very useful because in many parts it is written from the issuers perspective. This provides an opportunity to understand how they see the market, how they view their obligations as market makers, and how they use the same terms as we do, but with some very important differences. Issuers are less than transparent about how they ‘make the market’ and this is the first book to look at this aspect of warrant activity in any detail. This makes it particularly useful.

Despite the excellent coverage of the detail of the subject, the reader is still left with the impression that the warrant issuers have kindly created a product as a service to the investing and trading community. Of course, nothing is further from the truth. Warrants are a profitable product for the warrant issuers and unless traders understand how the issuers make money then they are at a disadvantage. It is unfortunate that this book does not answer this question at all. This omission leaves a very good book incomplete in a significant way.

Traders wanting to understand how to trade warrants in a practical way will not find this type of information. A scant two and a half pages are formally devoted to Warrant Risks. Experienced traders have written several long chapters of the impact of the gap between warrant theory and warrant trading reality.
Traders wanting to understand the theoretical basis of the warrant market will find this book invaluable. It is clearly explained and this makes the book an excellent starting point.


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