Stock Warrant

Category: finance

A derivative that gives the right to buy stock from the issuer at a specific price within a set time.

Warrants are "long-term options" issued by the company itself, not other traders. When a company issues warrants, they are trying to raise capital. If you exercise the warrant, the company gets fresh cash, and your stake in the business is finalized.

Common Examples

• The startup included stock warrants as part of the incentive package for early-stage institutional investors.
• Unlike exchange-traded options, a stock warrant is a direct contract between the investor and the issuing corporation.