CFA/EFPA Online Course - Fundamentals and characteristics of Covered Warrants: leveraged financial instruments with full risk control for Investment and Trading

Fundamentals and characteristics of Covered Warrants: leveraged financial instruments with full risk control for Investment and Trading  --- REGISTER
It will be accredited to EFPA

Accredited by CFA Society Italy* for 3 credits 

Teachers: Luca Stellato e Giovanna Zanotti

PART #1

COVERED WARRANT: DEFINITION AND BASIC ELEMENTS

  • The CW as a derivative financial instrument issued by a financial intermediary that gives the buyer the right to buy (covered warrant call) or sell (covered warrant put) an underlying asset at a predetermined price (strike price) at (or within) a fixed deadlin
  • The basic elements of a CW and the defining aspects of a financial option.
  • The possible underlying: indices, stocks, commodities and exchange rates.
  • Differences between CW and Option: from issuer risk to market making.

Factors influencing CW price

  • Price, volatility, time, interest rates and dividends.
  • Introduction to the Greek and Back & Scholes' Formula for calculating the value of an option and a CW.
  • Focus on volatilityHow to calculate it, historical volatility, implied volatility, cyclicality, persistence and operational elements for the pricing of volatility.

The different categories of CW

  • Plain Vanilla Put & Call
  • CW Spread

Pay Off on maturity and Pay Off At Now of the CW and key considerations

  • Essential elements to evaluate and operate in CW in terms of Investing.
  • Essential elements to evaluate and operate in CW from a Trading perspective.

PART #2

 HOW TO USE COVERED WARRANTS

Le modalità di utilizzo dei CWTotal control of risk, performance proportional to the performance of the underlying, asymmetric leverage, time element, volatility element

  • Market exposure: calculation methods and operational criteria.
  • The taxation of CWs and compensation for losses.
  • Diversification of investment portfolios with the CW

 CW Investing

  • Replacing the CW to the Underlying in your Investment portfolio: advantages and disadvantages.
  • Portfolio in CW: construction and scenario analysis of portfolios built to control risk and maximize return.
  • Going to maturity? Risks and opportunities.
  • Operational rolling models.

 CW Trading

  • Creating a Trading Plan in CW: essential elements.
  • Introduction to my method, the D.T.O.
  • The operational analysis.
  • The price/volatility matrix.
  • Risk Management.
  • Money Management.
  • Monitoring and Equity Line.

PART #3

USE CASE FOR INVESTING  AND TRADING

Investing

  • Use cases for investing with CWs.

Trading

  • Use cases of trading with CWs.
  • Seletion of examples D.T.O.  2025

Q&A SESSION

*CFA Society Italy has determined that this program qualifies for PL credit hour(s) under the guidelines of the CFA Institute Professional Learning program. If you are a CFA Institute member, you can self report PL credit(s) for your participation accessing the PL tracking tool through your account on the CFA Institute website. One credit hour is equal to one hour (60 minutes) of educational activity.