An option (warrant) that is issued alone, i.e., without an accompanying bond (i.e., the host bond), and one that has a very distant expiration date. It gives the holder the right, but not the obligation, to buy (in which case it is a call warrant) or sell (in which case it is a put warrant) a specific quantity of an underlying instrument at a pre-agreed price, with a long period of time available to exercise it. The right is tradable (issued as a security in its own) and is issued independently of the underlying security.

The writer of a naked warrant is not necessarily the issuer of the underlying instrument.

A naked warrant is also referred to as an uncovered warrant.