Definiton

Securities that are issued by a company that gives the right to the holder of securities to order or buy shares of the company at a certain price level. Warrants are often issued as a complementary at the initial issuance of a share. Because share prices fluctuate, when the price rises, the warrant holder benefits by buying the shares at the price that has been agreed upon. However, if the opposite happens, the market price falls, then the warrant holder suffers a loss of only the price of the warrant