Hello fellow financiers 
I’m a first year finance student, I recently came across warrants which I believe are a great investment especially if they last until exercised. However, I do have a few questions;
1. Who issues warrants in the US and UK and how/where do we purchase/view the warrants issued
2. What are the tax policies of warrants in the US, I believe in the UK they will be taxed as capital gains, right??
3. Any further advice for someone interested in investing in warrants in the future
Thank you all for your help.
Warrants are options to buy shares at a given price (the strike price) on or before the expiration date. They differ from call options in that a call option is written by a third party whereas a warrant is a contract written by the company itself and indeed the share is issued when the warrant is exercised, that is the share does not actually exist until the warrant is exercised. If you hold a warrant till expiration and exercise it then in the US you would pay short term capital gains on the difference between the market prices of the share that you sell the shares at and the strike price at which you buy the shares through the warrant at minus the cost of the warrants themselves. Typically warrants are issued with bonds in order to attract more investment and then later detached from the bonds to repackage the investment products. It’s fair to say that they represent a risk premium offered by lesser companies in order to entice investors to assume the greater risk but as such there is a greater chance of the warrants being underpriced when compared with call options.
The book "Beat The Market" by Edward O. Thorpe is about a simple delta neutral warrant strategy. It’s quite dated being from the late 50′s, early 60′s but is a good place to start with the concept.
Google and you’ll get masses of information – much more than anyone could include in an answer on this site
I would point out in my experience it is usually weaker, less attractive companies that offer warrants because they might not attract investors otherwise.
Warrants used to be very popular in UK a few years ago, but I don’t think there are as many now. The warrants are listed just like the ordinary shares, so you will find them in the Stock Exchange Daily Official List.
Not sure why you consider them a great investment. They can be but like always you need to look at the company itself rather than the means by which you invest. If company A is basically rubbish then it doesn’t matter whether you buy warrants, options, cfd’s, spread betting what have you. They will all LOSE if the company share price goes down!
In some ways a Warrant is like an option, it is a geared product. But, yes it is an interesting area of investment.
By the way, you may be interested in Covered Warrants: http://www.shareworld.co.uk/index.php/articles/covered-warrants/