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hello friends im ganesha can i help finance professionals and students to excel in their career and become a better version of themselves and im back with my capsule video on finance terms today ive brought to you an interesting concept from the world of finance that is warrants what exactly are warrants warrants are similar to derivative instrument as it gives you the right to purchase security but not the obligation to purchase it okay at a fixed price in simple terms suppose i have a warrant on hdfc bank at 1 300 that means it gives me a right to purchase the htfc shares at rupees 1 300. if the value of the shares are above 1 300 then definitely i will exercise the warrant and i will purchase the share in this example id use 1 300 which is an exercise price for the strike price which is helping me to take a decision whether to exercise or not as you exercise the warrant i will have to take the warrant to the company which says you see bank give that warrant to them and they will