Put Warrant

Posted in Finance, Accounting and Economics Terms, Total Reads: 494
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Definition: Put Warrant

It is a type of security that gives the person holding the underlying asset a right to sell it at a specified price. The person has the right to sell the security on or before a specified date. It is an option given by the company according to which a specific number of shares can be sold back to the company at a particular price.


Put warrants is an investment option that can give profit from a falling market.

An investor who has bearish approach of the market can use put warrants and can benefit from the decreasing price of the underlying asset.


Example

A company may issue stocks with a warranty that it will buy back stocks at a particular price and before an expiry date.

Warrant is a contractual financial instrument which gives special rights to the holder of the asset. It is based on the discretion of the holder and has a expiry date before which the right has to be exercised.

 

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