When the holder of the warrant exercises it, he pays the money directly to the company, and the company issues new shares to the holder.

One sticking point has been how Lomas will raise the money to retire up to $190 million in zero-coupon notes if holders exercise options in February to seek repayment.

If the stock surges, the holder can exercise the option, sell the stock at a much higher price and pocket the difference.

The holder can exercise the option at incremental dates(typically on an annual basis, sometimes less frequently), but not before a set time period has elapsed.

If share prices rise, the holder won't exercise the put because better results are available by selling in the market.

When the 1861 issue was maturing in 1864 these bonds were trading at a premium to face value, so most holders of the seven-thirties exercised their right to make the exchange.

The second is that even if the stockmarket does eventually rise by enough to persuade holders to exercise the warrants, issuers will have to plan and to some extent act as if it will not.

In finance, the expiration date of an option contract is the last date on which the holder of the option may exercise it according to its terms.

Because holders can typically exercise stock options over a period of years, they are - surprise, surprise - extremely valuable.

Shares up to 10 per cent of the stock capital may be issued bearing interest at a predetermined rate and the holder of such share may exercise all shareholders' rights, including the right to receive dividends.