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
- 3 Stocks I Would Avoid At All Costs
- This Should Be Your First Investment
- Fannie Mae and Freddie Mac Just Made Another $1.5 Billion -- But Shareholders Won?t See a Dime
- 3 Things to Watch When Howard Hughes Corp Reports Earnings
- When "Sin" Pays: A Deep Dive Into the Alcoholic Beverage Industry
- Why Shares of Fleetmatics Group PLC Are Soaring Today