Covered Warrants

Covered Warrants Benefits

Direct access to a full range of covered warrants through TD Warehouse's partnerships with all the leading issuers of covered warrants.
Free covered warrants seminars. Listen to the industry experts at our London Investor Centre.
Trade both long (call) and short (put) positions, giving you the potential to profit from both price rises and falls in the underlying security.
Trade in a wider range of markets with access to a wide range of UK and International Equities, commodities and currencies.
As a geared product investors gain the same level of exposure as buying ordinary shares but pay a fraction of the cost of the underlying stock.
Covered warrants are traded like shares.

More Information about Covered Warrants

A guide to covered warrants
SG Quarterly Magazine
The quarterly listed product magazine from Société Générale

What are Covered Warrants?

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.

How do Covered Warrants Work?

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.

How risky are Covered Warrants?

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.

How much do Covered Warrants Cost?

Covered warrants are traded like shares and are charged at normal commission rates from just £9.95 online. See full rates and charges.

As you don't own the underlying asset and only cash is exchanged rather than shares, there is no stamp duty that is usually charged on UK share purchases.

Which Account do I need to trade Covered Warrants?

Covered warrants can be traded through our Trading or Trading Plus Accounts. HMRC (Her Majesty's Revenue and Customs) do not allow covered warrants in a Trading ISA.

Existing Customers - to start trading covered warrants you can upgrade your account to a Trading Plus online today. Login now and go to Account Administration/Account Upgrades.