What is the main difference between an Option and a Warrant?

Question

What is the main difference between an Option and a Warrant (when purchasing stocks)? Besides that the warrant is being issued by the company.

Answer 1

The main difference is that when a warrant is exercised a company issues new stock, thus diluting the ownership of existing shareholders. On the other hand, when an exchange-traded option is exercised no new stock is issued so there's no dilution.

Answer 2

Well, a warrant is more arresting.

(Heh, heh, yeah, it's a slow day on Monday, with nothing to do but crack a joke or two.)

Actually a warrant is issued by the company that issues stock and so may be factored into the equation how a company views itself. Options are traded on an option exchange and are not directly connected to a company that has the underlying stock.