Covered Warrants (CW) Trading

Transaction Handbook

What is a Covered Warrant?

A Covered Warrant (CW) is a type of security backed by collateral, issued by a securities company. It grants the holder the right to:

Buy (Call Warrant): The right to purchase the underlying security from the covered warrant issuer at a predetermined price.

Sell (Put Warrant): The right to sell the underlying security to the covered warrant issuer at a predetermined price.

This right can be exercised either at a specific time or before a predetermined date. Alternatively, the holder may receive the difference in cash between the exercise price and the price of the underlying security at the time of exercise.

Basic information of warrants:

C	U	U	U	Y	Y	R	R
Call Warrant	Underlying stock used as the basis for the covered warrant			Year of issuance of the covered warrant		Issuance round of the covered warrant for the underlying stock within the year

Conversion Ratio: The number of covered warrants an investor needs to hold to purchase 1 unit of the underlying security.
Exercise Price: The price at which an investor exercises the right to purchase the underlying security upon the warrant’s maturity.
Issuer: The securities company issuing the covered warrant.
First Trading Date: The first day the covered warrant is allowed to trade on the stock exchange.
Last Trading Date: The last day the warrant holder can exercise their rights.

Profit/Loss Status of Covered Warrants

Status	Before Expiry	At Expiry
In-the-Money (ITM) – Profit	The price of the underlying security > Exercise price	Settlement price > Exercise price
At-the-Money (ATM) – Break-Even	The price of the underlying security = Exercise price	Settlement price = Exercise price
Out-of-the-Money (OTM) – Loss	The price of the underlying security < Exercise price	Settlement price < Exercise price

*** Note :

At the time of expiration, if the Covered Warrant (CW) is in the following states:

Profit: The investor will receive the settlement amount (the difference between the settlement price and the exercise price).
Break-even or Loss: The investor will not receive any settlement amount.

The status of the CW does not represent the investor’s actual profit or loss. To calculate actual profit/loss when holding the CW until expiration: Subtract the purchase cost of the CW from the settlement amount received. If the investor does not hold the CW until expiration, the actual profit/loss is determined in the same way as a regular stock transaction: The difference between the selling price and the buying price of the CW, minus any associated costs.

Trading guide:

Regular Transactions:

To trade Covered Warrants, customers can use the BSC Covered Warrants Price Board and execute trades in the same manner as trading underlying securities. On the BSC Covered Warrants Price Board, customers can choose to view: Information about all Covered Warrants available in the market, or Only the Covered Warrants issued by BSC.

Buying IPO Issued Covered Warrants:

To register for the IPO purchase of Covered Warrants issued by BSC, please follow these steps:

Step 1: Access the trading platform via BSC Webtrading [Insert link] or the BSC Smart Invest application [Insert link].

Step 2: Navigate to: Menu -> Securities Trading -> Register to Buy IPO Covered Warrants.

Step 3: In the IPO List, select the covered warrant code you wish to register for and complete the transaction details in the Transaction Information section.

Step 4: After successfully registering, you can check your registered information in the Registered IPO section.

IPO Covered Warrants Registration Screen on BSC Webtrading

IPO Covered Warrants Registration Screen on BSC Smart Invest

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