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
- Google Glass Was an Accident Just Waiting to Happen
- Facebook, Inc. Earnings: Exceeding Great Expectations
- Starbucks Earnings Show Us the Amazing Benefits of Pricing Power
- "Diluted" vs. "Basic" Earnings
- Will TransDigm Group Keep Investors Happy This Quarter?
- Netflix, Inc. Silences Its Critics With a Strong Finish to 2014