How do corporate exercises / actions affect the Call Warrants?
Call Warrants are subject to adjustments to take into account any corporate actions arising from the underlying stock, or component stocks in the basket. Corporate actions such as rights issue, bonus issue, share splits or consolidation may lead to a diluting or concentrative effect on the theoretical value of the underlying stock or basket. This may result in adjustments to the entitlement, the exercise price or other variables of the Call Warrant.
For index Call Warrants, adjustments are normally not required on the warrant terms for corporate actions related to the component stocks in the index. This is because the underlying index will have already adjusted itself to take into account such corporate actions.
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