You can be completely right about a stock and still lose every ringgit you put into its warrant.
It happens constantly. The trader calls the direction correctly, the share price climbs, and the warrant still expires worthless because it was deep out-of-the-money with three weeks left on the clock. The trade was never the problem. The selection was.
Most people pick warrants by sorting on price and buying the cheapest thing on screen. That is not selection. It is a lottery ticket with extra steps.
Screening is how you fix it. What follows are seven filters worth running before you buy anything, adapted from the framework taught by Warren Mak, former Head of Derivatives Product Development at Bursa Malaysia and a structured products trader at OCBC before that. He has written it up in more depth than we can here. This page is about turning his criteria into filters you can actually screen on.
Filter 1: liquidity, measured by trading value
Start here. Most screens get this one wrong, and it is the one that will actually hurt you.
Do not sort by volume. Sort by trading value: volume multiplied by average price.
Here is why that distinction matters. A warrant trading 50 million units at half a sen has moved RM250,000 of real money. Another trading 5 million units at 15 sen has moved RM750,000. On a volume screen the first looks ten times bigger. In reality the second is three times more liquid. Sort by volume and you will walk straight into the illiquid one.
Then look at the bid-ask spread and the queue depth. Thin warrants are thin for a reason. If you cannot get out at a fair price, being right about the underlying will not save you.
Filter 2: implied volatility
Implied volatility is the market's guess at how far the underlying will move, and you pay for it whether you want to or not.
Screen it against the other warrants on the same underlying. If one sits well above its peers, you are paying a premium for nothing.
The trap is buying during a volatility spike. Panic inflates implied volatility, you buy in at the top of it, and then it deflates. Your stock can move exactly the way you predicted and the warrant still falls. That one catches people every crash.
Filter 3: effective gearing, not simple gearing
Simple gearing compares prices and ignores delta, which makes it close to useless. Filter on effective gearing instead: the expected percentage move in the warrant for each 1% move in the underlying.
Five times effective gearing means roughly a 5% warrant move for a 1% stock move. In both directions. That second part is what people forget.
For most traders 3–6x is the sweet spot. Enough leverage to be worth the trouble, not so much that one bad session ends you.
Filter 4: time to expiry
Time decay is the rent you pay for being early, and it goes up every month.
Set a floor of two to three months on your screen. Anything under 30 days decays brutally, and you end up fighting the clock as well as the market. Longer-dated warrants cost more upfront, but they give your thesis room to breathe.
Match the expiry to how long you will actually hold. If you are day-trading, a six-month warrant is wasted money.
Filter 5: moneyness
Where the share price sits against the strike changes everything about how the warrant behaves.
| Moneyness | Call warrant | What it means for you |
|---|---|---|
| In-the-money | Share price above strike | Priciest, lowest gearing, highest delta, least likely to expire worthless |
| At-the-money | Share price near strike | Moderate cost and gearing, balanced risk and reward |
| Out-of-the-money | Share price below strike | Cheapest, highest gearing, lowest delta, most likely to expire worthless |
Filter for at-the-money or slightly in-the-money. Deep out-of-the-money warrants are cheap for a reason: they probably will not pay. Cheap is not value.
Filter 6: issuer and market-maker quality
The issuer sets the price you actually get filled at, which makes them a lot more than a name on the listing.
Good market makers hold tighter spreads, update their quotes quickly when the underlying moves, publish a price matrix you can plan against, and keep quoting when the market turns ugly. Weaker ones widen out or step back at exactly the moment you need to exit.
There is a misconception worth killing here. Market makers are not betting against you. They hedge. When you buy call warrants, the issuer goes and buys the underlying shares to cover their exposure. They make money on the spread, not on your losses. One useful side effect: heavy warrant volume can nudge the underlying stock, because the issuer is out there hedging.
Eight issuers operate on Bursa Malaysia as of 2026. Six local, two foreign.
| Issuer | Background |
|---|---|
| Macquarie | Australian group, first foreign issuer (2014). Wide coverage including foreign underlyings like the Hang Seng Index. Publishes a price matrix. |
| CLSA | Newest arrival (2025), part of CITIC CLSA. Focused on actively-traded large-caps. |
| CIMB | Part of CIMB Group. Long-standing local issuer, broad blue-chip coverage. |
| Kenanga Investment Bank | Malaysia's largest independent investment bank. Very active. Publishes a price matrix. |
| RHB Investment Bank | Part of RHB Banking Group. |
| Maybank Investment Bank | Investment-banking arm of Maybank. |
| AmInvestment Bank | Part of AmBank Group. |
| Hong Leong Investment Bank | Part of Hong Leong Financial Group. |
Watch how each one behaves near expiry and during volatile sessions, then filter accordingly. The issuer is a variable in your trade, not a footnote.
Filter 7: bid-ask spread
You pay the spread the instant you buy. So screen it as a percentage of the warrant price, never in sen.
A one-sen spread on a five-sen warrant is 20%. You are one-fifth underwater before the stock has moved at all. That same one-sen spread on a 50-sen warrant is 2%. Identical number. Completely different trade.
Prefer tight spreads. Ideally a single tick.
The checklist
Before you commit:
- Is the underlying actually trending the way I think it is?
- Is the warrant liquid, by trading value and spread rather than volume?
- Is implied volatility reasonable against its peers on the same underlying?
- Is effective gearing in a range I can survive, roughly 3–6x?
- Does it have at least two to three months to expiry?
- Is it at-the-money or slightly in-the-money?
- Is the spread tight as a percentage of price?
Fail more than one of these and skip it. There are hundreds of other warrants, and no single one is worth bending your rules for.
Where to screen
Bursa Marketplace runs an official warrant screener with filters for underlying, expiry and moneyness. Macquarie and Kenanga both publish price matrices on their own sites. Most broker platforms carry a basic warrant screener too, though the quality varies wildly.
Structured warrants are leveraged products. They can and do expire worthless, and you can lose your entire capital. This page is for education and general information only. It is not investment advice or a recommendation to buy or sell any warrant or security, and no issuer is endorsed over another. Always do your own research and verify licensed parties through Bursa Malaysia and the Securities Commission Malaysia.