Angie · learn
Warrant
A long-dated right to buy stock at a fixed price, usually issued attached to a bond or preferred offering as a sweetener.
Updated 2026-09-05
A warrant is a long-dated right to buy stock from the company at a fixed price, typically running for years rather than months. It is usually issued attached to a bond or preferred offering to make the deal more attractive.
The important difference from a call option is who is on the other side. Exercising a warrant creates new shares, so it dilutes existing holders. Exercising a listed call transfers existing shares between two market participants and changes nothing about the company.
See also
- Call option — The right to buy at the strike price. It gains value as the underlying rises, and it expires worthless if the underlying never gets there.
- Rights — A short-term right given to existing shareholders to buy new shares below market price, so their stake is not diluted by the issue.
- Convertible — A bond or preferred share that can be exchanged for common stock. It pays like debt until the equity is worth more, then behaves like equity.
Educational content, not investment advice. Angie explains how a valuation is built so you can judge it yourself. What you do with that is your call.
