Glossary · from the DESK dictionary
Warrant
A security issued by a company that gives the holder the right to buy new shares of the company at a specified price during a certain period.
In plain words
Unlike a traded option, leads to the issuance of new shares on exercise, which dilutes existing shareholders.
What it means for traders
A fundamental concept, frequently used as a sweetener in bond issuances or financing rounds.
Common pitfalls
Can expire completely worthless if the share price at maturity is below the exercise price.
Related terms
Covered Warrant · Detachable Warrant · Call Warrant · Underwriter's Warrant · Warrant Agent · Warrant Exercise Ratio
From the DESK dictionary. For information only, not investment advice.
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DESK is a research tool and not investment advice. Page generated: 2026-10-12.