covered warrant

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
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A security issued by a party other than the issuer or originator of the underlying asset, giving the holder the right (but not an obligation) to acquire a share or bond at a specific price and date. London Stock Exchange Glossary

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covered warrant covered warrant warrant1

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   A warrant issued by a bank that enables the holder to buy shares in another company at a future date, for a price that is generally above the current market price of the share. Used as a trading instrument. For example, Merrill Lynch might issue covered warrants on shares of General Motors. They are covered because the issuer will hold at least some of the underlying stock into which the warrants may be exercised. Covered warrants are aimed principally at international investors looking for geared exposure to a specific stock, basket of stocks or even an entire index.
   ► See also Share, Stock, Warrant.

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covered warrant UK US noun [C]
FINANCE an agreement that allows a person, usually someone who is already a shareholder, to buy or sell an investment that is based on shares, bonds, etc. at a fixed price before a fixed date. Covered warrants are bought and sold through financial institutions that already own the shares, etc. connected with the warrant before they sell them to investors.

Financial and business terms. 2012.

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

  • 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… …   Investment dictionary

  • 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 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

  • call covered warrant — A covered warrant that gives the holder the right, but not the obligation, to buy the underlying at a future date and specified price. London Stock Exchange Glossary …   Financial and business terms

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