Difference Between Options And Warrants
The main dissimilarities or difference between options and warrants can be pointed out as follows:
1. Introduction
Options: A contractual right of an individual to purchase or sell stocks at a predetermined price on a specific date.
Warrants: Right to purchase a specific number of stocks from the company at the specific price at specified date
2. Nature
Options: Options are contracts
Warrants: Warrants are securities
3. Structure
Options: Highly standardized
Warrants: Not standardized but highly customized
4. Issuer
Options: Option exchange
Warrants: A company
5. Maturity
Options: Shorter maturity period
Warrants: Longer life
6. Dilution
Options: No
Warrants: Yes
7. Ownership
Options: Employees
Warrants: Investors
8. Margin Calls
Options: Yes
Warrants: No
Also Read:
Also Read:
9. Principle Followed
Options: Future market
Warrants: Cash Market
10. Flexibility
Options: Less flexible
Warrants: More flexible
Options Vs Warrants (Comparison Chart)
I hope this post is helpful to understand the difference between options and warrants and to make comparison between them.
Options Vs Warrants (Comparison Chart)
Basis For Difference
|
Options
|
Warrants
|
Introduction
|
Contractual right to buy or sell stock
|
Right to buy a certain number of stocks at the specific price and date
|
Refers To
|
Contracts
|
Securities
|
Structure
|
Standardized
|
Customized
|
Issuer
|
Option exchange
|
Company
|
Maturity Period
|
Short
|
Long
|
Dilution
|
No
|
Yes
|
Margin Calls
|
Yes
|
No
|
Principle
|
Future market
|
Cash market
|
Flexibility
|
Less
|
More
|
I hope this post is helpful to understand the difference between options and warrants and to make comparison between them.
