Definitions for "Covered Warrant"
call option on the shares of a company issued by a bank, where the bank has hedged its position in the underlying stock, usually by holding shares of the company in question.
A security issued by a party other than the issuer or originator of the underlying asset, giving the holder the right to acquire a share or bond at a specific price and date.
A long term call option issued by a different party than the company on which the underlying value of the option is based. When a covered warrant is converted the issuing party provides shares that are already outstanding and are being traded on the secondary market. In contrast to uncovered warrants, which are issued by the company into whose shares the warrants convert, and for which new shares are issued upon their conversion.