The features listed above form part of most warrants. Some warrants also have their own unique features. A barrier level is a defined level that causes some event to occur. It is nominated by the issuer before the warrant is issued, and can be set above or below the exercise price of the warrant. The consequences of triggering a barrier level will be specified in the offering circular.
Some warrants have their upside potential capped at a certain level.
A cap level is fixed by the issuer at the time the warrant is issued. Cap levels do not cause the warrant to terminate but will limit the upside profit potential of the warrant. If, on exercise or expiry, the value of the underlying instrument is above the cap level, settlement of the warrant is based on a return equal to the cap level. The holder may be entitled to a cash payment or to a transfer of the underlying instrument at a value equal to the cap level. A warrant is said to be covered if the warrant issuer places the underlying instrument in a trust or similar custodial arrangement on behalf of the holder.