A right (but not an obligation) to buy or sell a set amount of stock, bonds or other securities from a financial institution at a specific price and date. Unlike a regular warrant, which is issued by a company and allows a holder to buy or sell that company's securities, a covered warrant is issued by a financial institution and can apply to outside securities. For example, a bank might issue a covered warrant on shares of Microsoft. The warrant is "covered" because the issuing organization owns at least some of the underlying securities.