Corporate warrants are warrants issued by issuers of index securities, belonging to equity warrants. The underlying securities are usually stocks of listed companies, and warrants are also issued by listed companies. When the company warrant is a subscription warrant, it has the financing function. After the warrant holder exercises his rights to the issuer, it will increase the issuer's share capital, which is equivalent to issuing new shares. Covered warrants are generalized warrants, which also give the holder the right to buy a certain stock at a certain price, but unlike general warrants, covered warrants are issued by a third party other than listed companies. Issuers are usually reputable financial institutions, or hold a large number of shares of the target company for investors to exchange at that time, or have strong financial strength as a guarantee, and can be responsible to investors in accordance with the terms listed in the covered warrants. Covered warrants can be European covered warrants and American covered warrants, and the holder's right can be to buy or sell the underlying assets.
Covered warrants are warrants issued by third parties other than the issuer of the underlying assets (usually large financial institutions, such as reputable securities companies and investment banks). The underlying assets can be derivatives such as individual stocks, a basket of stocks and indexes. Covered warrants can be European covered warrants and American covered warrants, and the holder's right can be to buy or sell the underlying assets. The exercise of covered warrants is basically the same as that of equity warrants, but the difference is that the delivery method can be stocks or cash spreads. In the case of stock delivery, when the holder exercises the right to buy shares, the issuer of covered warrants needs to buy shares from the market (or sell the shares it originally held to the warrant holder); When the holder exercises the right to sell shares, the issuer must buy shares at the exercise price. Therefore, the issuer of covered warrants takes risks and needs some hedging tools to avoid risks.