Warrant

In contrast to options, warrants are securitized and can therefore be traded very easily both on exchanges and over the counter. A warrant gives the holder the right to buy or sell (but not have to) an underlying asset (e.g. a share). With a purchase option, which is also called a call, you acquire the right to buy the underlying asset at a later date at a previously agreed price, the strike. With a put option, also known as a put, the exact opposite is the case. You acquire the right to be able to sell the underlying asset at a predetermined price. A warrant can be redeemed either during the term (American style) or at the end of the term on the exercise date (European style).