DEFINITION of 'Undetachable Stock Warrant'

A right attached to a bond that can be redeemed for stock, but cannot be sold separately from the bond. Undetachable stock warrants are considered low-risk because they can be substituted for another security with a higher return.


An undetachable stock warrant is also referred to as a convertible bond.

BREAKING DOWN 'Undetachable Stock Warrant'

A warrant is a type of certificate issued with a preferred stock. A preferred stock gives its holder claim to earnings and assets prior to common stockholders. The warrant enables the holder of the certificate to buy a certain amount of stock at a specific date at a specific price. Most often, this price is higher than the market price when the warrant or convertible bond is issued.

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RELATED FAQS
  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. I own some stock warrants. How do I exercise them?

    Typically, stock warrants are derivative instruments added to new issues of stocks or bonds to make these issues more attractive. ... Read Answer >>
  3. Is there a secondary market for warrants?

    Find out how to trade warrants on the primary market, the secondary market and the over-the-counter market, including how ... Read Answer >>
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