Trading Warrants & Certificates

Warrants & Certificates were first launched in the late 1980s. They are now mature products and widely spread across Europe, Asia-Pacific and to a lesser extent Central and North America. Euronext is one of the leading regulated exchanges in the World for Warrants & Certificates and offers a state-of-the-art listing and trading pan-European platform.

Why trade Warrants & Certificates on Euronext?

The market model Euronext launched at the beginning of 2009 for Warrants & Certificates aims at combining the benefits of order book trading and Request For Quote and offers innovative and unique features:

  • The Single Order Book between Euronext Amsterdam, Euronext Brussels and Euronext Paris allow for investors’ interest from these three exchanges to meet inside one single order book which increases liquidity and market quality.
  • Euronext Warrants & Certificates is based on an Open Order Book which allows investors to leave limit or stop orders but also to trade between themselves inside the Liquidity Provider Bid-Offer spread, hence possibly improving the Liquidity Provider’s price.
  • In order to protect investors against trades at aberrant prices, trading at prices worse than the Liquidity Provider’s prices is not allowed and trading is suspended if the Liquidity Provider is absent from the order book.
  • In order to make sure no trading takes place at prices outside of the Liquidity Provider Bid-Offer Spread, a Request for Execution (RFE) is sent to the Liquidity Provider’s trading system before a trade takes place asking for an immediate price update.
  • Liquidity Providers have access to specific features to flag knocked-out products and inform the market (Knock-Out By Issuer - KOBI), or to knock-in some of their products and start trading even intraday (Knock-In By Issuer - KIBI).
  • Some of Leverage Knock-Out products pay a residual value when they knock-out. In order to speed up the payment of these residual value down to a few minutes only, Euronext offers a redemption service called Payment After Knock-Out - PAKO).
  • Every issuer listing Warrants & Certificates on Euronext has to sign a Liquidity Provider Agreement. This agreement rules the Liquidity Provider presence in the order books, the maximum Bid-Offer spread and minimum Bid and Offer sizes for each product.
  • In order for investors to appreciate the market making quality of each Liquidity Provider, Euronext not only monitors Liquidity Providers performance but also makes the results available on our website. Look for Liquidity Indicators on each product quote page.

How to trade Warrants & Certificates on Euronext?

  • When introducing our new market model in 2009, we launched a new order type dedicated to Liquidity Providers: the Bulk Quote. A Bulk Quote allows a Liquidity Provider to update their quotes of up to 50 Warrants & Certificates in one single message.
  • Non-Liquidity Providers do not have access to the Bulk Quote. Instead, they can send market or limit orders and a new order type has been developed exclusively for Warrants & Certificates on Euronext: The Stop-On-Quote order. Its purpose is the same as a regular stop order, but it is automatically activated when the LP quote reaches the stop level.

How much does it cost?

In January 2013, Euronext introduced an innovative fee scheme to encourage product innovation and improve market quality. Issuers and their Liquidity providers offering specific services aimed at improving market quality, (such as Extended Trading Hours, Knock-Out By Issuer , Payment After Knock-Out , offering of a full product range… ) can benefit from trading fee discounts. The Warrants & Certificates fee book for Issuers and Liquidity Providers can be obtained by contacting the Structured Products team.

The fee book for non-Liquidity Provider members can be found here