what is a warrant?

Answer 1

A warrant is a right to purchase a specific security at a later date - usually issued with a debt security - at terms specific to the underlying debt agreement. The equity equivalent is a stock option. Often warrants are issued by private companies.

For example, a company may issue debt and add warrants to purchase additional shares of the company's stock. The warrants are added to increase the attractiveness of the debt to investors. If the company is high risk or the debt carries a low interest rate, warrants help a company borrow money.

Answer 2

Hi I am Dr. Syed Alamdar Ali

Hopefully, as the question has been placed in the Segment of Investing therefore the questions is about the term in Investment Context.

Therefore a Warrant is an option issued by a firm permitting the person to whom it has been issued to buy a specified number of shares of common stock at a specified price. It is not uncommon for publicly held corporations to issue warrants with new bonds.

A valuable aspect of a warrant is its rather long life: Most warrants are in effect for at least two years from issuance, and some are perpetual. Another key feature of the warrant is the exercise price. This is the price at which the warrant can be bought by the person to whom the warrant has been offered. This price is normally st about a certain percentage above the market price of the common stock at the time the bond or the common stock, and thus the warrant is issued. Frequently the exercise price of the warrant may change according to the terms of issue of warrant.

Another important feature of the warrant is its detachability. Detachable warrants are often traded actively traded on some Stock Exchanges around the globe and other warrants can only be exercised by the bond-holders and these are nondetachable warrants.

Answer 3

Since you are asking this in an investing forum, I assume you are asking what kind of security a warrant is. If this is so, ignore all of the above answers.

A warrant is a long term option issued by a corporation. The most common warrants are long term call options that give the owner the right -- but not the obligation -- to purchase shares from the company at a specified price.

Warrants are usually used by young firms. They are often attached as part of a "unit" that includes (for example) one warrant and one share of stock. It is a way to sweeten the pot to get investors to fork over their money. They are promised two shares of the upside but only have to take on the risk of one share.

A convertible bond can be thought of as a portfolio of a callable bond and a warrant.

Put warrants exist -- but are much more rare. They are almost always sold attached to a share of stock. Those units can be thought of as a sale of stock together with a guarantee.

Answer 4

A derivative security that gives the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue as a "sweetener" to entice investors.

Answer 5

Depends what kind of warrant... if the police have a search warrant, they are allowed to search a place without being prevented. If they have an arrest warrant, they are allowed to arrest someone etc.

Answer 6

Some government organisations (such as 'National Savings & Investments' in the UK) issue 'warrants' in payment. In this context they can be treated like a regular payment cheque and paid in at any bank/building society to an account belonging to the payee name on the front.

Answer 7

both of the first two.

"you're stupid"
"that's an unwarranted slur! how dare you!"
i.e. to warrant something = to provide a good reason for something. You are not stupid so there is no reason to say you are.

"does this house you're trying to sell me comply with all building regulations?"
"i warrant that it does"
i.e. promise - I really mean it and you can take me to the cleaners if I am wrong

"warranty" also means a promise that if something i sold you breaks during a certain period, I will fix it at my own expense.

"open up! it's the pigs!"
"do you have a warrant to search my house?"

Answer 8

1. authorization, sanction, or justification.
2. something that serves to give reliable or formal assurance of something; guarantee, pledge, or security.
3. something considered as having the force of a guarantee or as being positive assurance of a thing .

I.E The police need a warrant to search a suspects place of residence, or a warrant for somebodies arrest if they are arresting under suspition.

Answer 9

Depends what you mean - it is issued by the court - you can have a warrant out for your arrest, which is a legal document that allows the Police to arrest you.

Answer 10

Let's put it this way ... if there is a warrant out on you,
you might want to start looking for a lawyer.