A warrant is the right a holder has to buy a security at a future time for an agreed price. One type of warrant, a call warrant means a certain number of shares can be purchased at a particular price, the second, put warrant means an agreed amount in equity can be sold to the issuer at a specified time for a specified price.
For example…
Let’s take Alex’s decision to buy a warrant for shares in the Eco Timber company at a price of thirty cents a share. If the current price of a share at Eco Timber is seventy cents a share and Alex decides to use her warrant, she would get a hundred shares for thirty dollars instead of spending seventy dollars. A great Saving!
