a warrant is a security that allows it's holder to buy company stock at a predetermined price within a particular window of time. while similar to a call option, warrants are often issued over the counter by the underlying company and not on an exchange. their lifespan sometimes as long as 15 years is also considerably longer than that of an option. when a warrant is issued, it's exercise price is typically higher than the stock's current value. however, over the long run, a warrant can give investors needed flexibility when market conditions change. for instance, if the stock of zura wells is prone to severe fluctuations, here's a good chance that it's worth will exceed the exercise price before ?. the value of this flexibility gradually declines as the expiration date draws near and the odds of major jump in the stock price diminish. while offering distinct benefits, be sure to do your homework before buying a warrant on the secondary market or excepting smaller returns on your bond. as with options, warrants are most valuable when the market seems especially volatile.