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An option to purchase or sell the underlying at a given price and time or at a series of prices and times outlined in the warrant agreement. A warrant differs from a put or call option in that it is ordinarily issued for a period in excess of one year. Warrants are issued alone or in connection with the sale of other securities, as part of a merger or recapitalization agreement, and, occasionally, to facilitate divestiture of the securities of another corporation. Ordinarily, exercise of a common stock warrant sold by the issuer of the underlying increases the number of shares of stock outstanding, whereas a call or a covered warrant is an option on shares already outstanding. Index warrants and many put warrants are cash settled. Also called Stock Purchase Warrant, Term Stock Right (TSR). See also Call Option, Covered Warrant, Dilution, Equity Warrant.
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