There are three advantages when using the alternative ETF hedging strategy. Firstly, the liquidity risk and frictional costs can be substantially reduced. Secondly, the steep movements in price or price-limit events are rarely found. Last, the tradecost could be saved as a result of the lower tax rate. Besides validating the theorymodel of alternative ETF hedging strategy once again, more importantly, this studyrecognizes that because the differing changes exist in delta values for outstandingstock warrants issued by the same issuer so that the ETF hedging adjustmentpositions of which some warrants require buying and others require selling can beoffset each other. Consequently, the expense of hedging transaction cost forindividual issuer can be further cut down under lesser net trading volume, and thusthe aggregate hedging effectiveness would greatly heighten. Finally, this study takesTaiwan 50 ETF and 300 warrants, which are randomly selected from five issuers, asthe sample to conduct an empirical study. The empirical results show that the savingtransaction cost can increase again more than one time for individual issuer viausing alternative ETF hedging strategy provided that the offset effect is taken intoaccount. In sum, the study works found here can further identify and strengthen thepractical application value of alternative ETF hedging strategy.