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Covered warrants are issued by large financial institutions who maintain buy and sell prices for covered warrants on the London Stock Exchange (LSE).
Covered warrants give the buyer the right, but not the obligation to buy (Calls) or sell (Puts) in a certain underlying asset, at a pre-determined price, on or before a pre-determined date.
Covered warrants provide the same level of exposure as buying ordinary shares but you only pay a fraction of the cost of the underlying asset.
Just like shares covered warrants can be bought and sold at anytime, online or by telephone. Unlike shares they have a limited life span - between 3 months and 3 years at issue. After which the cash value (if positive) of the warrant is automatically paid out to the holder.
Before trading you should fully understand the nature of covered warrants and your exposure to the risk involved.
The geared nature of covered warrants means that a relatively small movement in the share price of the underlying asset will result in larger movements in the value of the warrant. Therefore, covered warrants provide the opportunity for greater returns than ordinary share dealing but also greater risks and potential losses. If you are in any doubt you should consult an Independent Financial Advisor.
Covered warrants are traded like shares and are charged at normal commission rates from just €15.00 online. See full rates and charges.
As you don't own the underlying asset and only cash is exchanged rather than shares, you would not be subject to the stamp duty that is usually charged on UK share purchases.
Covered warrants can be traded on our Trading Account.
Please note that in order to trade in Covered Warrants you will be required to complete an Appropriateness Assessment. This will help us to assess whether you have the necessary knowledge and experience in order to understand the risks involved in dealing in Securitised Derivatives such as Covered Warrants.
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For more information please contact us on 1 800 646 582 .
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The value of your investments can go down as well as up. You may not get back all the funds you invest.
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