Warrant is a right but not an obligation to buy or sell a certain underlying assets (stock, index, currency, or commodity), at a pre-determined Price (called the Strike price or Exercise price), on or before a pre-determined Expiry Date.
There are two different types of warrants commonly called company warrants and covered warrants:

• A company warrant (equity warrant)
  is a funding exercise for the corporation that issues call warrants over its own stocks. On exercising, the company will issue new shares and deliver them to the exercising warrantholders against payment of the exercise price.
  
  
• A covered warrant
  is usually issued by an investment bank. The bank does not issue a warrant as a funding exercise but in order to provide investors with an efficient tool to manage their investment portfolio. The covered warrant is a listed security, traded on an exchange and constitutes a contract between the issuer and buyers of the warrant. The obligations of the issuer are materialised by the listing documents that detail all terms and conditions of the issue.

Warrants come in two different forms:

• A call warrant
  provides the warrantholder with a right, but not an obligation, to buy the underlying asset at a pre-determined price (strike price), within a certain time period.
  
  
• A put warrant
  provides the warrantholder with a right, but not an obligation, to sell the underlying asset at a pre-determined price (strike price), within a certain time period.

• A European style warrant
  allows the warrantholder to exercise his right only on the expiry date. Most Hong Kong listed warrants are European style.
  
  
• An American style warrant
  allows the warrantholder to exercise his right at any time between the listing date and expiry date.