Warrants are options that give you the opportunity to decide on when to buy a given security, the price, quantity and time. Stock warrants are often given by companies, unlike options which are used freely in the stock market. This means that the security held in the warrant can only be issued by the issuing company, but not by the investor holding the shares.
Companies normally issue stock warrants as a method of attracting investors to buy new securities. Not only does it attract investors, but it also gives them confidence in that new stock, the reason being that, the investor can choose to wait until prices have gone down and will still be assured of getting his share. He can also choose to redeem his shares when their value has increased and this is just a good thing to his confidence in the stock.
Stock warrants come in two different types. These are, the call warrants and a put warrant. The first category represents a specific number of shares that can be acquired from the issuer at a given time, either on or before a specified date. The other category specifies the amount of equity that can be sold back to an investor on or before a specified date. This gives an advantage to the investor because he can then decide what to do with his shares or stocks.
When being issued with a warrant, an investor should be able to notice whether they carry some particular characteristics. One of them is that they should have a specified expiry date, which is the last day on which the warrant could be executed. The certificate should also have particulars regarding the investment tool they represent. The style of execution also differs because there are those that have the American style and others the European style. One should be able to know the difference.
Companies normally issue stock warrants as a method of attracting investors to buy new securities. Not only does it attract investors, but it also gives them confidence in that new stock, the reason being that, the investor can choose to wait until prices have gone down and will still be assured of getting his share. He can also choose to redeem his shares when their value has increased and this is just a good thing to his confidence in the stock.
Stock warrants come in two different types. These are, the call warrants and a put warrant. The first category represents a specific number of shares that can be acquired from the issuer at a given time, either on or before a specified date. The other category specifies the amount of equity that can be sold back to an investor on or before a specified date. This gives an advantage to the investor because he can then decide what to do with his shares or stocks.
When being issued with a warrant, an investor should be able to notice whether they carry some particular characteristics. One of them is that they should have a specified expiry date, which is the last day on which the warrant could be executed. The certificate should also have particulars regarding the investment tool they represent. The style of execution also differs because there are those that have the American style and others the European style. One should be able to know the difference.
