Loading the player...

DEFINITION of 'Share Purchase Rights'

A type of security that gives the holder the option, but not the obligation, to purchase a predetermined number of shares at a predetermined price. This is similar to a stock option or warrant. These rights are typically distributed to existing shareholders, who have the ability to trade these rights on an exchange.

BREAKING DOWN 'Share Purchase Rights'

The rights only give shareholders the ability to purchase the shares, but they must still must pay for the shares to redeem the rights.

  1. Oversubscription Privilege

    A privilege provided to existing shareholders in a company when ...
  2. Rights Offering

    An issue of rights to a company's existing shareholders that ...
  3. Warrant Coverage

    Warrant coverage is an agreement between company and shareholders ...
  4. Gold Option

    An option to buy or sell gold bullion at a future date at a set ...
  5. Floortion

    A type of option that gives the holder the right, but not the ...
  6. Put Warrant

    A put warrant is a type of security that gives the holder the ...
Related Articles
  1. Investing

    Stock Rights Issue

    Rights are offers that allow existing stockholders to buy additional shares at a predetermined price, for a set time period. Usually, the number of shares the investor can purchase are in proportion ...
  2. Investing

    Investing In Stock Rights And Warrants

    Learn why many companies choose to issue rights or warrants as an alternative means of generating capital and how their value is determined.
  3. Investing

    Understanding Rights Issues

    Not sure what to do if a company invites you to buy more shares at discount? Here are some of your options.
  4. Investing

    Understanding warrants and call options

    Warrants and call options are securities that are quite similar in many respects, though they have some notable differences.
  5. Trading

    Warrants: A High-Return Investment Tool

    Discover the advantages of this largely unexploited investment vehicle.
  6. Trading

    The Basics of Covered Calls

    Learn how this simple options contract can work for you, even when your stock isn't.
  7. Investing

    Bank Warrants Your Atttention

    Bank warrants are a lucrative way to make a bet that U.S. financials will once again be respected by the investing public.
  1. How are stock warrants different from stock options?

    Stock option and stock warrant may have similar function. However, company uses these two financial instruments for different ... Read Answer >>
  2. What is the difference between "right" and "obligation" on a call option?

    Learn what a call option is, what determines a buyer and seller of an option, and what the difference between a right and ... Read Answer >>
  3. How are rights distributed in a rights offering?

    Learn about stock rights offerings that companies may make, and discover how the rights are distributed among the company's ... Read Answer >>
  4. Why would a company issue a rights offering?

    Understand more about a rights offering, and learn the most common reasons a company might have to issue a rights offering, ... Read Answer >>
  5. Are warrants more desirable than options?

    Understand what stock warrants are, the differences between warrants and options, and learn whether warrants or options are ... Read Answer >>
Hot Definitions
  1. Diversification

    Diversification is the strategy of investing in a variety of securities in order to lower the risk involved with putting ...
  2. Liquidity

    Liquidity is the degree to which an asset or security can be quickly bought or sold in the market without affecting the asset's ...
  3. Federal Funds Rate

    The federal funds rate is the interest rate at which a depository institution lends funds maintained at the Federal Reserve ...
  4. Call Option

    An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument ...
  5. Standard Deviation

    A measure of the dispersion of a set of data from its mean, calculated as the square root of the variance. The more spread ...
  6. Entrepreneur

    An entrepreneur is an individual who founds and runs a small business and assumes all the risk and reward of the venture.
Trading Center