Search Investopedia

Warrant

Filed Under » , ,
Dictionary Says

Definition of 'Warrant'

A derivative security that gives the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue as a "sweetener" to entice investors.
Investopedia Says

Investopedia explains 'Warrant'

The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months.

Related Definitions

  •

    Call

    1. The period of time between the opening and closing of some future markets wherein the prices are established through an auction process.2. An option contract giving the owner the ...
    Read More »

  • Call Warrant

    A warrant that gives the holder the right to buy the underlying share for an agreed price, on or before a specified date.
    Read More »

  • 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 ...
    Read More »

    • Cum Warrant

      A condition in which the buyer of a security is entitled to a warrant that has been declared, but not distributed.
      Read More »

    • Covered Warrant

      A type of warrant that allows the holder to buy or sell a specific amount of equities, currency or other financial instruments from the issuer, usually a bank or a similar financial ...
      Read More »

    • Ex-Warrant

      The trading of shares when a warrant has been declared but not distributed.
      Read More »

    • Put Warrant

      A warrant that gives the holder the right to sell the underlying share for an agreed price on or before a specified date.
      Read More »

    • Warrant Coverage

      An agreement between a company and its shareholders whereby the company issues warrants equal to some percentage of the dollar amount of the shareholder's investment.
      Read More »

    • Warrant Premium

      The amount that an investor must pay above the current market price for a security, when purchasing and exercising a warrant. The warrant premium represents the cost of purchasing a ...
      Read More »

    • XW

      A symbol used to signify that a security is trading ex-warrant.
      Read More »

Articles Of Interest

Sponsored links
Hot Definitions
Partner Links
Suggested Definitions