Investopedia – Warrants: A Risky But High-Return Investment Tool

By Alan Farley | May 7, 2018 — 10:00 AM EDT      Editors Note from Dudley Pierce Baker Founder – Editor I am very pleased to see more knowledge coming to the attention of investors regarding stock warrants. While knowledge is essential we are the only service which provides a comprehensive database of all warrants trading. All of the knowledge in the world will not do you any good if you do not know which companies have stock warrants trading, expiry dates, exercise prices, etc. You will see in this article that they mention Put Warrants which do not trade in the United States or Canada, but may be found in some European or Asian markets. Also, there are many hyperlinks in this piece for promotional items at Investopedia. Warrants: A Risky But High-Return Investment Tool A warrant is similar to an option, giving the holder the right but not the obligation to buy an underlying security at a certain price, quantity and future time. It’s unlike an option in that a warrant is issued by a company, whereas an option is an instrument offered by a central exchange, such as the Chicago Board Options Exchange (CBOE). The security represented in the warrant (usually share equity) is delivered by the issuing company instead of a counter-party holding the shares. Companies often include warrants as part of share offerings to entice investors into buying the new security. A warrant can also increase a shareholder’s confidence, provided the underlying value of the security increases over time. Let’s examine the types of warrants, their characteristics and … Continue reading