Homonym: Warrants (Authorization)
A warrant is a financial instrument that gives the holder the right to purchase a company's stock at a specific price within a certain time frame. Warrants are often issued by companies as a way to raise capital, and they can be traded on the stock market. If the stock price rises above the warrant's exercise price, the holder can buy the stock at a lower price, potentially making a profit.
Warrants differ from options, as they are typically issued by the company itself rather than being traded on an exchange. They can have longer expiration periods, sometimes lasting several years. Investors may use warrants to speculate on a company's future performance or as a way to enhance their investment portfolio.