WARRANT

A security entitling the holder to buy a proportionate amount of stock at some specified future date at a specified price, usually one higher than current market . This "warrant" is then traded as a security, the price of which reflects the value of the underlying stock . Warrants are issued by corporations and often used as a "sweetener" bundled with another class of security to enhance the marketability of the latter. Warrants are like call options , but with much longer time spans -- sometimes years. In addition, warrants are offered by corporations whereas exchange traded call options are not issued by firms.