Actually it means that 6 Datasonic Call Warrant will entitle you to buy 1 Datasonic share at the price of RM3.72. This is at expiry date if it is a European style call warrant.

This post has been edited by Cubalagi: Apr 5 2014, 10:42 PM

Call warrants nowadays are all cash settled. Meaning you dont get the shares but fhe difference between the exercise price and the mother share price at the expiry date. You will get nothing if exersice price is higher than mother share market price. Also the mother share market price is usually calculated based on 5 days market average prior to expiry.

So in your example, if you have 6 Datasonic CW with exercie price of 3.72 and mother share is trading at RM4.00 at the expiry, you will get a cheque for 28 sen. If you have bought the CW at 30 sen, meaning your cost is 6 x RM0.30 = RM1.80. You would have lost RM1.52 (1.80-0.28), not including transaction costs.

But this happens only if you hold the Call Warrant to expiry. You should never do that. The way to trade call warrant is very short term. Max you hold it just a few days, ideally intraday.

I used to trade call warrants sometimes, but not anymore. You need the time to closely monitor the warrant and mother share during the trading day and discipline to cut loss quickly. I dont have both.

This post has been edited by Cubalagi: Apr 6 2014, 09:39 AM

I dont consider trading call warrants as investing at all. Its pure trading or can I say gambling.

More interesting is that There are also some Put warrants listed on Bursa. When the mother share falls, the put warrant price should go up. You can identify put warrant by stock code/stock name ending with "- HA".

For example, check out MAS-HA (3786HA). This is a put warrant for MAS issued by RHB Investment Bank. MAS HA price went up from 13 sen in mid-Feb to 20 sen by end March 14, when MAS the mother share fell.

IIRC

FBM Small Cap Index = all the Main Board companies excluding the Top 100.