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. Theoretical Ex-Rights Price

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

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

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

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

    A market where investors purchase securities or assets from other ...
  6. Derivative

    A security whose price is dependent upon or derived from one ...
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. What You Need To Know About Preferred ...
    Trading Strategies

    What You Need To Know About Preferred ...

comments powered by Disqus
Hot Definitions
  1. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  2. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  3. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  4. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
  5. Over The Counter

    A security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, etc. The phrase "over-the-counter" ...
  6. Earnings Before Interest After Taxes - EBIAT

    A financial measure that is an indicator of a company's operating performance. EBIAT, which is equivalent to after-tax EBIT ...
Trading Center