Cum Rights

Finance allah shmoop what is ah warrant Oh it's Acute

option Like kind of a stock option Light Yeah That's

How to think about it anyway Okay Okay It pretty

much feels just like a stock option And yes there

are put warrants and call warrants in the same vein

as put options and call options So then what's the

diff why don't we just call a warrant a stock

option Well warrants have you know their own little characteristics

here and they're usually issued by the company itself where

a stock options on say microsoft will They can be

issued by anyone who deals in options like goldman morgan

ups sumitomo whoever whatever investment bank that makes capital markets

trading happened they can issue options trade him have a

spread and then make profits in them and there's nothing

the company can really do about it They can all

create derivative securities on stocks or bonds of their own

volition And the company itself just kind of stands there

looking by and wondering why they didn't get into the

investment banking business Well goldman morgan and the others then

offer trading in those options on exchanges in regular form

Such that many buyers and sellers generally come together liquid

lee to trade and you know generate profit margins for

the desks of the bank's trading the securities right The

banks are basically the casino house and they end up

making most the money most of time Got that Okay

another difference warrants and options here Warming's can last five

ten twenty years that's Usually how many weeks options last

and the question remains Why would a company issue what

are essentially cheap stock options too Others to buy slices

of its own pie While the answer as with most

of these types of company deals is that the company

has to issue those warrants to get a deal done

like you know to settle a patent dispute or created

distribution or manufacturing partnership or some of their tactical arrangement

to make the good better and to make the problems

go away well warrants generally or simply held for the

duration of the partnership or of the company's existence is

an independent and city well and conversely options are traded

liquid leon exchanges all over the world and they can

be sold without a whole lot of discussion with company

Here this kind of warrant which gives you the right

to throw a piece of paper in your own financial

asset jail Very different kind of warrant than this one 00:02:18.383 --> [endTime] You stay away from the arrest warrants