Stock Warrants vs. Stock Options: What’s the Difference?

By:CHIZOBA MORAH
Updated June 11, 2023
Reviewed by THOMAS J. CATALANO
Fact checked by YARILET PEREZ

A stock warrant gives the holder the right to purchase a company’s stock at a specific price and at a specific date. A stock warrant is issued directly by the company concerned; when an investor exercises a stock warrant, the shares that fulfill the obligation are not received from another investor but directly from the company.

An equity stock option, on the other hand, is a contract between two people that gives the holder the right, but not the obligation, to buy or sell a stock at a specific price, prior to a specific date, referred to as the contract expiration date.

KEY TAKEAWAYS

  • A stock warrant represents the right to purchase a company’s stock at a specific price and at a specific date.
  • A stock warrant is issued directly by a company to an investor.
  • Stock options are purchased when it is believed the price of a stock will go up or down.
  • Stock options are typically traded between investors.
  • A stock warrant represents future capital for a company.

Dudley Pierce Baker – Founder – Editor, Common Stock Warrants – Comments
Now that you know basically what a warrant is, what do you do/need now?
You need a database of stock warrants so that you know which companies have warrants trading.
This is what we have done for thousands of investors since May 2005 providing a comprehensive database of warrants trading in the U.S. and Canada.
JOIN US NOW AS A SUBSCRIBER

Readers may remember this name, Precious Metals Warrants, which we launched in May 2005. This was a groundbreaking service with a database of only the stock warrants trading in the resource sector. This was a very popular and successful service as gold and silver soared in early 2012. In 2013, we expanded our services to include all stock warrants trading in the United States and Canada and in all investment sectors and we changed our name to Common Stock Warrants. All of the stock warrants trading in the resource sector are still available in our databases and include warrants on oil and gas companies, gold and silver companies, lithium companies, uranium companies, SPACs, etc. We currently see the resource sector (PMs) to be one of the next big opportunities for investors. GET STARTED NOW!

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