Covered Warrants

Characteristics of Vontobel Covered Warrants

  • Ability to gain exposure, before costs, taxes, or other charges, to an underlying financial asset in a rising (Call) or falling (Put) market at a fraction of the cost of dealing in the underlying financial asset (leverage effect);
  • The underlying financial asset of the Covered Warrants can be, e.g. an index, a n Italian or foreign share, a currency or a commodity;
  • Eventual losses are limited to the capital invested.

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Investing in Covered Warrants

  • Covered Warrants give the right to either buy (Call) or sell (Put) an underlying financial asset (e.g. share, index, commodity or currency) at a predetermined price (strike).
  • The holder has the right to buy or sell the underlying financial asset at any time right up until the expiry data (American style covered warrant) or only on the expiry date (European style covered warrant).
  • Covered warrants represent an alternative investment for investors aiming to participate in the performance of an underlying financial asset with an disbursement lower than the one necessary to directly invest in this underlying financial asset amplifying, therefore, their potential returns (the so called leverage effect).

How to use Covered Warrants?

  • Trading Long/Short term trends on a wide range of underlyings;
  • Covered Warrant can be used for speculative purposes or to implement hedging strategies (it is possible, for instance, to use a Covered Warrant Put to compensate the losses resulting from a negative performance of the underlying asset held in the portfolio).


Before deciding to invest, the risks should be taken into account in addition to considering the opportunities. Extensive losses and even a total loss of the capital invested are possible. Please note that factor certificates do not deliver any current income such as interest or dividends. These products are not capital protected. Investors also bear the risk of the issuer defaulting (issuer risk). Further risks are:

  • Covered Warrants are exposed to the leverage risk by amplifying price changes registered in the underlying financial asset;
  • Volatility and other variables could lead to movements in the product price;
  • Trading Covered Warrants may result in losses of all or part of the invested capital;
  • Covered Warrants are complex financial products requiring continuous monitoring.

Before deciding to invest please carefully read the offer documents available on the issuers' website

For further information please contact
Bank Vontobel AG

Promotional advertisement: Before taking any decision read carefully the Base Prospectus and the related Summary as well as the Final Terms of the product, in particular the risk factors' sections related to the investment, to the costs to the tax treatment, and other information made available to the investors on the issuer's website This document has only information and advertising purposes and does not represent a financial, accounting, legal, or other recommendation. Before taking a decision to buy these products, investors shall therefore independently evaluate the advantages and the risks related to the investment and all the consequent legal, tax and accounting aspects. In this evaluation investors may consult their financial and/or competent advisors.