Warrants

A contract similar to an option is a warrant.
Warrants are call options issued by a company on its own equity.
The main difference between traded options and warrants are the timescales involved, warrants usually have longer lifespan and on exercide the company issues new stock to the warrant holder.
On exercise the holder of the traded option receives stock that has already been issued.
Exercise is usually allowed any time before expiry but after the initial waiting period.

An alternative to a convertible bond is to issue a bond in which the right to buy shares later at a certain price is contained in a separate warrant. This is more flexible than the convertible. in that the warrant can be used later to buy shares more cheaply while still keeping the bond. Warrants are often detached from bonds and sold separately.

Warrants
A company may issue warrants which give the holder the right to subscribe at a fixed price for shares in the company at some future date.
The subscription price will usually be fixed above the current price of the shares when the warrant is issued, so at this stage any value in the warrant is price speculation.

Suppose a warrant is issued which gives the right to subscribe for one share at 180p at some point in the future.
The current share price is 150p and there is no Intrinsic Values in the warrant.
But if the share price rises to 250p there is clear value in the right to subscribe at 180p for a share that could be sold immediately for 250p. The price of the warrant will reflect this value.

A warrant gives the right to subscribe cash for a new share the company issues.
Warrants are traded on exchanges similar to shares.

Warrants are sometimes issued by companies to improve the attractions of a loan stock.

Covered Warrants

This is when a different entity (not the company) issues warrants on company shares. This entity must cover the risk by owning the shares.
Warrants are frequently offerred on a "basket" of different shares.
These covered warrants are really simply part of the traded options market and priced accordingly.

Perpetual Warrants

Occasionally perpetual warrants are issued which have no maturity.