What are the risks

Covered Warrants offer both the benefits and risks of gearing.

If the underlying share or asset moves against you, then you could lose a lot of money very quickly.

Indeed, warrants will be absolutely worthless if they reach their expiry date and they are 'out of the money' ie an asset is trading at £2.50 and you have the right to buy it at £3.

And the value of these warrants may fall quickly well before the expiry date, if it becomes apparent that they are likely to be 'out of the money' when the expiry date is reached.

Like other investments it is important to acknowledge the potential risks and spread these risks across a portfolio.

Always research your investments carefully and consult a professional financial advisor.

If you don't want to lose your shirt, tread carefully.