What is a Warrant in Finance? Financial Derivatives - Stock Warrants

[@poohshmoo9892]

I finally started reading "Derivatives for the trading floor" ( bought like months ago ) ... i like the format very much, no spaghetti whatsoever , and the quizzes at the end of the chapters are meaningful ( I always "answer" with a quote from some of Patrick's videos :P )

[@WiCapitalco]

Thanks for all of the time you've put into your videos they helped me understand the complexity of the market

[@alphataurus8743]

thank you, I was able to show , thanks to you that a cheque can be used as a warrant in bills of exchange at canada, you never said these words but the video does confirm the use of "warrant" thank you have a great day.

[@tomaso74]

You are brilliant and the video is very helpful. You explained everything in a very understanding way and we support you in doing more videos like this. Thank you!

[@new_filler]

Very easily explained. Thank you.

[@qwaszxerdfcvtyghvb]

how a company management has the right to issue warrants and dilutes the value of the existing shares without the shareholders voting on such move?

[@zabciuszek]

How the warrants discussed in this video relate to warrants received as a bonus as an employee. i..e. our company allows us to chose a warrants as a bonus payout. Then we have 10 years to sell it, they have a face value of say 10 EUR a unit. The price can go above or below that - clearly that's the risk we take. At the time when we sell it, we get cash for it, not shares. thanks for some feedback of a separate video on it.

[@СергейМонин-д7с]

Well, warrants is just a leveraged instrument. They provide you gearing. Depending on the situation, it can be a good thing, or a bad thing. If your company stocks are up 30%, then on warrants you'll double your investment. On the other side, if company stocks are down, warrants will magnify losses. So it's a double-edged sword. If you are 100% sure in your company, then keep warrants. If after 10 years company stocks rise a lot, it will make you rich.

[@jaolagues]

Are most of the stock that is received upon warrant exercises, sold on the day of exercise?

[@FinalFlash2110]

What happens to warrants from a public company if they are bought and go private? I am speaking about Berkshire Gray.

[@thekidinventers7323]

I have a question and had been trying to find the right answer. When they do a secondary offering and at the same time they issue stock warrants to be exercised at the price..do they dilute/issue more shares again when warrants are exercised?

[@chaccopo]

How do we account for bonus warrants received?

[@andrewdornan3942]

so that means warrants are less leveraged than a LEAPS right? how are they priced compared to LEAPS?

[@ArmenBalian-cd7me]

Warrents✍️✍️

[@Gumbii9]

Amazing. So what I’ve been referring to as “listed options” for the past couple of years are actually called warrants..

[@DaveM-js4mw]

So you discussed call warrants, but I recently came across put warrants. If comapnies deal with call warrants by issuing extra shares, how does a company deal with a put warrant?

[@СергейМонин-д7с]

Put warrants give you the right to sell stock back to the company.

[@tuckt6180]

The Boss !

[@fhthecat7898]

great explanation! Thank you.

[@rossfriedman6570]

Do preferred shares also dilute common stock?

[@ProfAzimov]

No

[@TonyqTNT]

Excellent video! Was wondering if someone could help me understand a history question related to warrants. Was reading during the 1500s a customs official, Thomas Smythe, fell out of favor with Queen 👸 Elizabeth of England 🇬🇧 incurring the Queens extreme displeasure with Mr. Smythe. Apparently Mr. Smythe sold some privy warrants which ended up having the treasury losing 6,000 pounds. Queen Elizabeth sent some aids to "talk to" Mr. Smythe but he was unable to recoup the financial losses. Elizabeth wanted Smythe jailed, but Smythe's friend, Sir Robert Cecil intervened on Smythe's behalf. My question is: Can anyone explain plainly what Privy Warrants are?

[@borntodoit8744]

Presumably The standard WARRANT means are derivative of company stock. Similarly PRIVY WARRANTS are derived from an interest in royal asset (in your example) In law, the word PRIVY means "person having a part or interest in [any action, matter, or thing]."

[@qudizzle1]

What is the purpose of a warrant having a conversion ratio?

[@СергейМонин-д7с]

It makes warrants cheaper. Some stocks, like Google or Shopify are very expensive. If you set conversion rate 1:1 for google, its warrants will cost $150-$400 each. To reduce the price, banks introduce conversion ratio. This way, the cost of the warrant can go down to $1.5-$4. Obviously, the lower the price, the lower conversion ratio. In $10-50 range, conversion ratio is 1:1, in $50-$100 range it's 1:10, in $100-$10000 range it's 1:100 usually.

[@qudizzle1]

@@СергейМонин-д7с thanks!

[@СергейМонин-д7с]

@@qudizzle1 no problem.

[@tomboy3732]

Well explained sir thank you

[@ProfAzimov]

So warrents=free money for corporations

[@shawnsponds]

Sorry horrible explanation