What is a Call Warrant? Call warrants, also known as stock warrants, are securities that give the holder the right, but not the obligation, to buy a certain number of securities (usually the issuer's common stock) at a predetermined, fixed price before a certain time. The predetermined price is known as the strike price.

Companies issue warrants to big pocket investors in order to sweeten an equity deal. Once the investor has the warrants he can hold it, exercise it, or sell it to other investors on a secondary market, such as the stock market.

Investors who buy a warrant on a secondary market at the warrant's market value must still pay the strike price of the warrant if they want to exercise their right to buy the underlying company stock.

Warrants have expiration dates, and their lifespans are usually anywhere between one, two, five, and at high as 15 years. The holder of a warrant must exercise the warrant no later than the expiration date. If a warrant is allowed to expire, it becomes worthless, and it cannot be sold on a secondary market.

In theory, warrants give the holder than potential chance to buy the underlying security, the company's common stock, below market value if the cost of the warrant and its strike price are below the market value of the underlying security at the time the holder chooses to exercise the warrant.

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Sources:

https://en.wikipedia.org/wiki/Special...
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