What is a DSO warrant?

A DSO warrant, or Direct Stock Option warrant, is a financial instrument that gives the holder the right to purchase shares of a company's stock at a predetermined price within a specific time frame. These warrants are often issued as part of financing agreements or as incentives for investors and can be traded independently of the underlying stock. Unlike traditional stock options, DSOs typically have longer expiration periods. They can also provide companies with a way to raise capital while offering investors potential upside if the company's stock performs well.