Warrants (SAP Library

Warrants

Definition

Warrants vest the owner of the warrant with the right to purchase currency amounts (Currency warrants), bonds (Bond warrants), or stocks (Equity warrants) at predetermined conditions within a certain period (or on a certain key date). A special type of warrant is the Index warrant, which speculates on rising or sinking prices and is only aimed at cash settlement and not the delivery of securities.

Warrants can be traded on their own and can be purchased together with a bond (warrant bond).

Integration

To represent warrants in the system, the following product categories have been created, for which you have to Define Product Types in Customizing for the securities area.

Product category

Name

111

Index warrant

112

Equity warrant

113

Currency warrant

114

Bond warrant

You create warrants as a class in the system.

They can then be purchased and sold using the transaction management functions.

See also:

Class

Transaction Management

Using the Exercising Security Rights function, you can detach warrants from a Warrant Bond and you can also exercise the warrants (or represent the expiration of warrants).

You can execute the following option categories:

Option category

Exercise type

Equity warrant

Put

a) Delivery
b) Cash settlement

Call

a) Delivery
b) Cash settlement

Bond warrant

Put

a) Delivery
b) Cash settlement

Call

a) Delivery
b) Cash settlement

Currency warrant

Put

Cash settlement

Call

Cash settlement

Index warrant

Put

Cash settlement

Call

Cash settlement

Product category	Name
111	Index warrant
112	Equity warrant
113	Currency warrant
114	Bond warrant

Option category		Exercise type
Equity warrant	Put	a) Delivery b) Cash settlement
Equity warrant	Call	a) Delivery b) Cash settlement
Bond warrant	Put	a) Delivery b) Cash settlement
Bond warrant	Call	a) Delivery b) Cash settlement
Currency warrant	Put	Cash settlement
Currency warrant	Call	Cash settlement
Index warrant	Put	Cash settlement
Index warrant	Call	Cash settlement