Covered Warrant

A type of warrant that allows the holder to buy or sell a specific amount of equities, currency or other financial instruments from the issuer, usually a bank or a similar financial institution, at a specific price and time.

The main differences between normal warrants and covered warrants are:

1. Covered warrants can have a wide variety of underlying financial products. Normal warrants only have a company's stock as their underlying financial product.

2. Covered warrants are only issued by financial institutions. Normal warrants are only issued by the company that issued the underlying equity.

3. Covered warrants can have a variety of exercise prices depending on the conditions set forth by each issue. Normal warrants generally have only one exercise price.

4. Covered warrants allow the warrant holder to buy or sell the underlying asset. Normal warrants allow the warrant holder only to buy the underlying equity.


Investment dictionary. . 2012.

Look at other dictionaries:

  • covered warrant — A financial instrument which gives the holder the right, but not an obligation, to buy or sell an underlying asset at a specified price during, or at the end of, a specified time period. Practical Law Dictionary. Glossary of UK, US and… …   Law dictionary

  • Covered warrant — In finance a covered warrant (sometimes called naked warrant) is a type of warrant that has been issued without an accompanying bond or equity. Like a normal warrant it allows the holder to buy or sell a specific amount of equities, currency or… …   Wikipedia

  • covered warrant — A call option on the shares of a company issued by a bank, where the bank has hedged its position in the underlying stock, usually by holding shares of the company in question. Dresdner Kleinwort Wasserstein financial glossary A security issued… …   Financial and business terms

  • covered warrant —   Opzione cartolarizzata, quotata nei mercati borsistici primari, che attribuisce il diritto di comprare o vendere una determinata attività finanziaria ad un determinato prezzo e ad una data stabilita. Ai warrants può essere collegata a un titolo …   Glossario di economia e finanza

  • Covered Warrant — Optionsscheine (engl. Warrants) sind verbriefte (d. h. als Wertpapier gestaltete) Optionen. Im Gegensatz zu börsengehandelten Optionen oder OTC Optionen eignen sich Optionsscheine auch für den Vertrieb am Retail Markt, denn sie können in… …   Deutsch Wikipedia

  • covered warrant — Fin a futures contract for shares in a company …   The ultimate business dictionary

  • covered warrant holder — holder covered warrant The owner of the covered warrant. London Stock Exchange Glossary …   Financial and business terms

  • covered warrant strike price — The price at which the investor may buy or sell the underlying during (if American style) or at the end (if European style) of the expiry period. Also referred to as expiry price and exercise price . It is known when the warrant is issued. London …   Financial and business terms

  • American style covered warrant — An American style covered warrant allows the holder to exercise the covered warrant at any time on or before the expiry date. London Stock Exchange Glossary …   Financial and business terms

  • American-style covered warrant — An American style covered warrant allows the holder to exercise the covered warrant at any time on or before the expiry date. London Stock Exchange Glossary …   Financial and business terms

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