what are warrants?

Answer 1

Okay, here is the correct answer.

A warrant is a class of investment securities that derive their value from another security. They are part of a larger class of investment securities called equity options and include options, rights and warrants.

It is easier to explain a warrant by explaining the rest of the class.

A stock option is a fixed right to buy or sell a security issued either by the company to an employee or by one investor to another mostly through the Options Clearinghouse Corporation.

A right is a stock option issued by a company, good to purchase shares of the company at a fixed price, when a triggering event occurs either because a price has been crossed or an event such as a corporate takeover occurs. A right is good for a short and limited amount of time once the trigger occurs. Rights are generally good for less than one year. The exception occurs with "Shareholder Rights Plans," which trigger the rights issuance once a hostile takeover occurs. Rights are often attached to shares of stocks as an additional incentive to buy shares.

A warrant differs from a right only in duration. Warrants are good for many years and it is possible for them to be good in perpetuity. They are generally attached to corporate bonds and can be separated to encourage lending at a lower rate of interest to the issuing company. They are also, at times, attached to shares of either common or preferred stock to provide an incentive to purchase shares in the company at the initial public offering. Generally warrants occur on "junk bonds," or preferred stock. They usually can be split from the bond and so trade as a separate security. When they cannot be split from an attached bond, they are called covertable bonds.

So to answer your question. A warrant is a right to buy shares of a company at a defined price during a defined period of time, sometimes with additional restrictions. Further, they tend to be issued with very long lives and it is not uncommon to see them as a right to purchase an investment within ten years from issue.

Answer 2

A warrant, like an option, gives the holder the right but not the obligation to buy an underlying security at a certain price, quantity and future time. However, unlike an option, an instrument of the stock exchange, a warrant is issued by a company. The security represented in the warrant (usually share equity) is delivered by the issuing company instead of an investor holding the shares.

Companies will often include warrants as part of a new-issue offering to entice investors into buying the new security. A warrant can also increase a shareholder's confidence in a stock, if the underlying value of the security actually does increase overtime.

There are two different types of warrants: a call warrant and a put warrant. A call warrant represents a specific number of shares that can be purchased from the issuer at a specific price, on or before a certain date. A put warrant represents a certain amount of equity that can be sold back to the issuer at a specified price, on or before a stated date.

Characteristics of a Warrant

Warrant certificates have stated particulars regarding the investment tool they represent. All warrants have a specified expiry date, the last day the rights of a warrant can be executed. Warrants are classified by their exercise style: an American warrant, for instance, can be exercised anytime before or on the stated expiry date, and a European warrant, on the other hand, can be carried out only on the day of expiration.

The underlying instrument the warrant represents is also stated on warrant certificates. A warrant typically corresponds to a specific number of shares, but it can also represent a commodity, index or a currency.

The exercise or strike price is the amount that must be paid in order to either buy the call warrant or sell the put warrant. The payment of the strike price results in a transfer of the specified amount of the underlying instrument.

Investing In Warrants

Warrants are transferable, quoted certificates, and they tend to be more attractive for medium-term to long-term investment schemes. Tending to be high risk, high return investment tools that remain largely unexploited in investment strategies, warrants are also an attractive option for speculators and hedgers. Transparency is high and warrants offer a viable option for private investors as well. This is because the cost of a warrant is commonly low, and the initial investment needed to command a large amount of equity is actually quite small.

Answer 3

In law, a warrant can mean any form of authorization. Often in statute the warrant of a particular person is required before certain administrative actions can take place. For example, before the United States Secretary of State may affix the Great Seal of the United States to letters patent, the President must give authorization [1]. Warrant officers derive their authority from an authorization given by a defense minister as opposed to actually being an officer of the state.

Most often, the term warrant refers to a specific type of authorization; a writ issued by a competent officer, usually a judge or magistrate, which commands an otherwise illegal act that would violate individual rights and affords the person executing the writ protection from damages if the act is performed. The Fourth Amendment to the United States Constitution prohibits search or arrest without a warrant, unless there is a reasonable doubt to privacy.

Warrants are typically issued by courts and are directed to the sheriff or a police officer. The warrants issued by a court normally are search warrants, arrest warrants, and execution warrants. A typical arrest warrant in the United States will take the approximate form of:

"This Court orders the Sheriff to find the named person, wherever he may be found, and deliver said person to the custody of the Court."

Warrants are also issued by other government entities, particularly legislatures, since most have the power to compel the attendance of their members. This is called a call of the house.

In the United Kingdom, senior public appointments are made by warrant under sign manual, the personal signature of the monarch, on the recommendations of the government.

Answer 4

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Answer 5

Not that kind of warrants, Tiffany. If we are talking about warrants in stocks and bonds, it is a right to buy certain quantity of stocks at a preset price. Often, a company may issue certain bonds and attach warrants to the bonds as an incentive for the investor to buy the bonds. The warrants allow the owner to purchase company stocks at a certain price in the future. The owner can then exercise their rights in a given period of time to buy the stocks or simply sell those warrents in the open market which in turn, lowers the cost of purchasing those bonds.

Answer 6

A warrant is the right — but not the obligation — to buy or sell a certain quantity of an underlying instrument at an agreed-upon price. The right to buy the underlying instrument is referred to as a call warrant

Answer 7

Hi this is a ver good question. I have answered 4 questions today and ur question is good.
A warrant is a piece of paper or proof which is made by lawyers and has a stamp of police and provides the police the perivilage to arrest that person.
A warrant is the proof or ordor of arrest.
Give me best answer.

Answer 8

Needs, like What warrants an explanation? lol

Answer 9

Police use them to be able to enter a building of residence. Also they get a warrant for someones arrest.

Answer 10

warrents is like a dui but a warrent takes your license away and you may go to jail more then 30 days