Detachable Warrant

AAA

DEFINITION of 'Detachable Warrant'

A derivative that is attached to a security and gives the holder the right to purchase an underlying security at a specific price within a certain time frame. A detachable warrant is often combined with various forms of debt offerings and can be removed by the holder and sold in the secondary market separately.

INVESTOPEDIA EXPLAINS 'Detachable Warrant'

Many companies choose detachable warrants when issuing bonds because it makes a debt offering more attractive and can be an effective method of raising new capital. The exposure to the right given by the detachable warrant can often gain the attention of investors who do not usually participate in the fixed-income markets.

A detachable warrant can be traded independently of the package with which it was offered, and is similar to a call option.

RELATED TERMS
  1. Fixed Income

    A type of investing or budgeting style for which real return ...
  2. Theoretical Ex-Rights Price

    The market price that a stock will theoretically have following ...
  3. Call

    1. The period of time between the opening and closing of some ...
  4. Warrant

    A derivative security that gives the holder the right to purchase ...
  5. Bond

    A debt investment in which an investor loans money to an entity ...
  6. Secondary Market

    A market where investors purchase securities or assets from other ...
Related Articles
  1. Warrants: A High-Return Investment Tool
    Options & Futures

    Warrants: A High-Return Investment Tool

  2. I own some stock warrants. How do I ...
    Options & Futures

    I own some stock warrants. How do I ...

  3. Bond Basics Tutorial
    Retirement

    Bond Basics Tutorial

  4. Introduction To Commercial Paper
    Bonds & Fixed Income

    Introduction To Commercial Paper

comments powered by Disqus
Hot Definitions
  1. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  2. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  3. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  4. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  5. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  6. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
Trading Center