warrants issuer push hdr lower, am i right?, page-7

re: meerkat -warrants issuer push hdr lower, am i Hi
All this talk about warrants isn't quite right.

You never know what risk the warrant issuer is taking. They may go out uncovered or fully covered dependent on the risk on their whole book.

How covered (physical stock they hold) determins their exposure.

From experience and a lot of contact with people on warrants desks I know different desks have different limits and risk profiles that are constantly changed on a wider market macro basis and down to a stock level with dididend ex dates approaching etc.

I could talk delta gamma theta and the whole Greek alphabet but the bottom line is that a issuer / trader will lock in a profit when it is there on a warrant but may do so by physically closing the warrant by it's repurchase or negating the risk by hedging with equivilent shares or another instrument.

Even knowing the open position doesn't tell the full story unless you know the net open position of the warrant issuer as they may prefer to hold warrants open as trading stock and not close them so the series keeps looking active. Whole bunch of new tricks to learn.

sorry gotta go