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I am a little confused as to how a third party can issue a naked warrant when it is not the issuer of the instrument upon which the warrant is based. In other words, how can a bank issue a promise that another party will issue stock at some point in the future?
Mike Black
What are Covered Warrants?
The definition of covered warrant as "a warrant issued in a foreign currency" is pretty strange. A covered warrant is issued by a bank or such and is commonly exchange-traded, for example Société Générale is a large issuer. They (and their close relative, the turbo warrant) are popular with retail investors on European stock exchanges and come in put and call varieties. In addition to elucidating the "foreign currency" claim, the article should probably make a clearer difference between warrants issued by companies themselves (the current focus) and the exchange-traded covered variety. See http://www.incademy.com/training/Covered-Warrants-I/Introduction/1087/10002/ for more information.
Looking at for example OMX Helsinki listings, it seems that what they call "options" are close to what this article mostly talks about (though still exchange-traded) and what they call "warrants" are actually covered warrants (ie. more like stock/index options). 85.188.1.90 ( talk) 16:01, 19 March 2008 (UTC)
I think there's scope for confusion here. I believe a warrant in Australia is not the same as a US warrant. On the ASX in Australia, a warrant is an exchange traded 'long dated' option contract, issued by approved financial institutions. The number of existing shares is not changed by these options.
Outside of the ASX realm, warrants are 'over-the-counter' options, or company options, issued by companies and sold to potential shareholders. These will result in new shares when exercised.
Am I right, or mis-informed?? -- Avocado kebab 05:13, 22 October 2006 (UTC)
Zero Coupon Convertible Warrant this type of warrant are generally issued without any periodical interest and return and this is subject to be converted into shares of the company after a specified period. this type of warrant generally issued to promoters or managerial person.
Hi all,
I'm a bit confused by the opening line:
"A warrant is a security that entitles the holder to buy stock of the company that issued it at a specified price, which is much higher than the stock price at time of issue."
I understand that the warrant entitles the holder to buy stock at a specified point and price in the future, but what is the value of the specified price being much higher than the price at time of issue? Unless the market value of the stock exceeded this specified , much higher price, no warrant would ever be exercised? I'm sure I'm missing something fundamental but any help would be appreciated.
Thanks,
James
In the equation, what does the F mean?
The article makes the following claim: "When a call option is exercised, the owner of the call option receives an existing share from an assigned call writer (except in the case of employee stock options, where new shares are created and issued by the company upon exercise)."
In general, I don't believe this is true. Generally, employee stock options are carved out the common for sequence of deals, e.g. Round A. In this sense, the options are already issued, and hence not created and issued upon exercise. This statement should probably be corrected, or at least modified to illustrate that employee options may also come from an existing pool of common stock. —Preceding unsigned comment added by 69.106.244.163 ( talk) 22:06, 11 August 2008 (UTC)
NPR Marketplace (radio program) reported 2009-07-02 that current California government warrants paying 3.75% are about 1% lower than 1992 California warrants. The article section Warrant (finance)#Government issued says the 1992 warrants paid 18% interest, but 5% seems to be the prevailing number in a search of pay newspaper archives [1]. Can someone investigate the discrepancy and reference the correct percent (and state the exact year)? Milo 23:55, 2 July 2009 (UTC)
I have read that the German „Optionsscheine“ (which equal „warrants“?) are illegal in the U.S. However, I don’t see anything about this in the article?! -- A11w1ss3nd ( talk) 18:02, 10 July 2020 (UTC)
![]() | This article is rated C-class on Wikipedia's
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I am a little confused as to how a third party can issue a naked warrant when it is not the issuer of the instrument upon which the warrant is based. In other words, how can a bank issue a promise that another party will issue stock at some point in the future?
Mike Black
What are Covered Warrants?
The definition of covered warrant as "a warrant issued in a foreign currency" is pretty strange. A covered warrant is issued by a bank or such and is commonly exchange-traded, for example Société Générale is a large issuer. They (and their close relative, the turbo warrant) are popular with retail investors on European stock exchanges and come in put and call varieties. In addition to elucidating the "foreign currency" claim, the article should probably make a clearer difference between warrants issued by companies themselves (the current focus) and the exchange-traded covered variety. See http://www.incademy.com/training/Covered-Warrants-I/Introduction/1087/10002/ for more information.
Looking at for example OMX Helsinki listings, it seems that what they call "options" are close to what this article mostly talks about (though still exchange-traded) and what they call "warrants" are actually covered warrants (ie. more like stock/index options). 85.188.1.90 ( talk) 16:01, 19 March 2008 (UTC)
I think there's scope for confusion here. I believe a warrant in Australia is not the same as a US warrant. On the ASX in Australia, a warrant is an exchange traded 'long dated' option contract, issued by approved financial institutions. The number of existing shares is not changed by these options.
Outside of the ASX realm, warrants are 'over-the-counter' options, or company options, issued by companies and sold to potential shareholders. These will result in new shares when exercised.
Am I right, or mis-informed?? -- Avocado kebab 05:13, 22 October 2006 (UTC)
Zero Coupon Convertible Warrant this type of warrant are generally issued without any periodical interest and return and this is subject to be converted into shares of the company after a specified period. this type of warrant generally issued to promoters or managerial person.
Hi all,
I'm a bit confused by the opening line:
"A warrant is a security that entitles the holder to buy stock of the company that issued it at a specified price, which is much higher than the stock price at time of issue."
I understand that the warrant entitles the holder to buy stock at a specified point and price in the future, but what is the value of the specified price being much higher than the price at time of issue? Unless the market value of the stock exceeded this specified , much higher price, no warrant would ever be exercised? I'm sure I'm missing something fundamental but any help would be appreciated.
Thanks,
James
In the equation, what does the F mean?
The article makes the following claim: "When a call option is exercised, the owner of the call option receives an existing share from an assigned call writer (except in the case of employee stock options, where new shares are created and issued by the company upon exercise)."
In general, I don't believe this is true. Generally, employee stock options are carved out the common for sequence of deals, e.g. Round A. In this sense, the options are already issued, and hence not created and issued upon exercise. This statement should probably be corrected, or at least modified to illustrate that employee options may also come from an existing pool of common stock. —Preceding unsigned comment added by 69.106.244.163 ( talk) 22:06, 11 August 2008 (UTC)
NPR Marketplace (radio program) reported 2009-07-02 that current California government warrants paying 3.75% are about 1% lower than 1992 California warrants. The article section Warrant (finance)#Government issued says the 1992 warrants paid 18% interest, but 5% seems to be the prevailing number in a search of pay newspaper archives [1]. Can someone investigate the discrepancy and reference the correct percent (and state the exact year)? Milo 23:55, 2 July 2009 (UTC)
I have read that the German „Optionsscheine“ (which equal „warrants“?) are illegal in the U.S. However, I don’t see anything about this in the article?! -- A11w1ss3nd ( talk) 18:02, 10 July 2020 (UTC)