Questions tagged [warrant]

A warrant is an option on a stock issued by that stock company. Warrants are often issued attached to bonds (with the warrant expiring on the bond's maturity date). When a warrant is exercised, new shares are issued. This dilutes current shareholders and is often used to pay back the bondholders from the warrant issuance.

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Difference between a warrant and an option?

What is the difference between a warrant and an option on a stock? Apparently both represent the same right to receive a share of stock at the strike.
emcor's user avatar
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4 votes
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Can "Turbo warrants" be priced using the Black & Scholes model?

I am trying to model the pricing of an asset called a "Turbo warrant", which to me looks a lot like a Down-and-Out Barrier option with leverage. When the price of the underlying asset hits a ...
twhale's user avatar
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Warrant volatility surface differs for each issuer

I have written a rudimentary program for fitting volatility surfaces for warrants of call and put options for the purpose of some basic scenario analysis. In my country, trading options privately in a ...
JMC's user avatar
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3 votes
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Cash less exercise and redemption feature in SPAC warrants

Public and private warrants of a SPAC post merger (Initial Business Combination or IBC) are often very similar. Notable differences are 1) cashless exercise of the private warrants and 2) redemption ...
PBD10017's user avatar
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Differences in implied volatilities of warrants and options

I have another question regarding the implied volatilities of warrants: When it's said they are overpriced compared to classical options, that means their implied volatility is higher than for similar ...
John Denim's user avatar
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What can I do with AIG+

Got the following notice. What Can I do with AIG+ WARRANT I have? What will happen on 01/12/2021? What will happen on 01/14/2021? Will I get $45.088365 PER WARRANT ? What will happen If I do not sell ...
ofir's user avatar
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1 vote
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When did the first exchange-traded warrants appear?

Exchange-traded options appeared after the Chicago Board Options Exchange (CBOE) opened in 1973. But what about exchange-traded stock warrants? From what I have surmised from reading, exchange-traded ...
Flux's user avatar
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SPACs - How can IPO investors incur losses?

I'm trying to understand the role of the initial IPO investors of a SPAC. From the Beginner's Guide of r/SPACs: When the IPO occurs, a SPAC generally offers Units – generally at \$10 per Unit. These ...
shiningPanther's user avatar
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How to use the parity parameter when pricing third-party warrants with BS?

I attempt a second basic question. Let me know if would have been more suitable for that. Third-party warrants are very similar to call options. One of their main ...
Sylvain Leroux's user avatar
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Is the sign of the delta-gamma approximation error predictable?

I self-study quantitative finance, but I have a hard time connecting the textbook formula with the market reality and available data. I use delta-gamma approximation to estimate the price change of ...
Sylvain Leroux's user avatar
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How do back office systems calculate warrant average net price?

I encountered an interesting formula a vendor gave me for how they calculate Average Net Price: Average Px = Weighted Average Price Average Px (Net) = (abs(warrant principal) + signed Fees and ...
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Is a warrant with the same strike price and maturity as the corresponding call option priced in the same way as the call option?

Is a warrant with the same strike price and maturity as the corresponding call option priced in the same way as the call option? Suppose I find a strike X warrant with T years to expiry and a call ...
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