A type of financial instrument usually issued together with a security (normally shares or bonds) that has a separate life and value. A warrant allows the investor to purchase ordinary shares at a fixed price over a period of time or to perpetuity. The price of the shares is usually higher than the market price at the time of issue. A warrant is freely transferable and can be traded separately. Warrants are usually issued by companies for their own shares, or the shares of a subsidiary.

See also: Covered Warrant