stock warrant

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stock warrant

A financial advisor explains a stock warrant to a client.

Definition
  1. Noun:
    • A stock warrant is a financial instrument that grants the holder the right, but not the obligation, to buy a specific number of shares of the issuing company's stock at a predetermined price (the exercise price) before a specified expiration date. It is a type of derivative security issued directly by the company.
Usage
  • As a standalone security: A stock warrant is a certificate (physical or electronic) representing a specific purchase right.
    • The company issued stock warrants to raise additional capital.
  • As an incentive or "sweetener": Warrants are often attached to other securities, like bonds or preferred stock, to make them more attractive to investors.
    • The bond offering included stock warrants as an added incentive.
Examples
Advanced Usage
  • Detachable Warrant: A warrant that can be separated from the bond or preferred stock it was issued with and traded independently on the market.
  • Covered Warrant: A warrant issued by a financial institution, not the company whose stock is referenced. (Note: This is a related but distinct financial product).
Variants and Related Words
  • Warrant (noun): The common short form for "stock warrant" in financial contexts.
  • Call Warrant: A specific type of warrant that gives the right to shares (as opposed to a put warrant, which gives the right to sell).
  • Exercise Price / Strike Price: The predetermined price at which the warrant holder can buy the stock.
  • Expiration Date: The last date on which the warrant can be exercised.
Synonyms
  • Equity Warrant: A near-synonym, emphasizing the right to purchase equity (stock).
  • Subscription Right: A similar but often shorter-term right issued to existing shareholders.
Related Phrases
  • To issue a warrant: The action of a company creating and offering warrants.
  • To exercise a warrant: The action of using the warrant to purchase the underlying shares.
  • Warrant holder: The owner or investor in possession of the warrant.
stock warrant

A financial advisor explains a stock warrant to a client.

Noun
  1. a written certificate that gives the holder the right to purchase shares of a stock for a specified price within a specified period of time
  2. a type of security issued by a corporation (usually together with a bond or preferred stock) that gives the holder the right to purchase a certain amount of common stock at a stated price
    • as a sweetener they offered warrants along with the fixed-income securities

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