Covered Warrants I

Introduction| Course| Q&As | Recommended reading| Quiz |

Introduction

Context

Warrants are for experienced investors who have an understanding of risk, and who want to exploit the gearing potential in warrants. This is one of the more hidden - and thereby inefficient - areas of the market, offering interesting opportunities to the shrewd investor.

Prior knowledge required

Very little prior knowledge is required, but the topic involves a fair bit of simple mathematics. Warrants should not be the starting point for a novice investor, and so, although not required, a good knowledge and experience of ordinary share markets is desirable.

Contents

1. Introduction
2. What are covered warrants?
3. Comparison between corporate warrants and covered warrants
4. Advantages of warrants
5. Advantages of warrants – the magic of gearing
6. Disadvantages of warrants
7. Advantages & disadvantages - a summary
8. International warrants markets
9. UK warrant market
10. Types of covered warrant I (warrant terms)
11. Types of covered warrant II (underlying assets)
12. Types of covered warrant III (exotics)
13. Information on warrant terms
14. Warrant trading
15. Warrant pricing
16. Basic analysis I (underlying asset)
17. Basic analysis II (prices and terms)
18. Basic analysis III (gearing)
19. Basic analysis IV (intrinsic value)
20. Basic analysis V (premium)
21. Advanced analysis I (Black-Scholes Model)
22. Advanced analysis II (volatility)
23. Advanced analysis III (the greeks)
24. Risk
25. Trading strategies
26. Tax
27. Conclusion

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