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
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