A warrant gives the holder the right to buy shares of the issuing company at a specified price within a specified timeframe.
Although both are equity derivatives the major difference between warrants and call options is that warrants are issued directly by the company. They also tend to be longer dated than options, it's not uncommon for warrants to be valid for years, whereas Options tend to only be good for months.
Warrants occasionally trade on exchanges.
Related Fool Articles
Recent Mentions on Fool.com
- Why Wells Fargo & Co Is Making Me Buy Huntington Bancshares Incorporated
- Warren Buffett's Love-Hate Relationship With Index Funds
- Is Statoil a Buy Following Second-Quarter Weakness?
- Mixed Results and a Reduced Outlook Sent Dunkin's Shares Tumbling; Is This a Buying Opportunity?
- Key Takeaways From Home Depot?s 2014 European Investor Meetings
- How Does Apollo Investment Corporation Make Money?