Warrant ( English warrant - authority , power of attorney ) is:
- a security that gives the holder the right to buy a proportionate number of shares at an agreed price for a certain period of time, usually at a lower price than the current market price;
- certificate of the goods warehouse about the acceptance for storage of a certain product , that is, a warrant is a distribution document that is used in the sale and pledge of goods.
Usually warrants are used for a new issue of securities . A warrant is traded as a security whose price reflects the value of the underlying securities.
Warrants have gained popularity among stock speculators, because the warrant’s rate for the purchase of the stock at which he is listed on the stock exchange is significantly lower than the stock’s price, therefore less money is needed to maintain a given position.
The validity period of warrants is quite long (what is their difference from “call” options ), an unlimited warrant can be issued. In addition, warrants are issued by issuing companies, but call options are not.