Traditional Warrants: Basics

Traditional warrants, which are essentially call options on a company's stock, are the most common type of warrant. They are often included by companies in a new debt issue as a sweetener to attract investors. We cover the various payoff scenarios of traditional call and put warrants, and look at some of the reasoning behind the issuing of warrants. We finish with a look at non-equity warrants, such as usable bonds, debt warrants, harmless warrants, and currency warrants.