Got some questions about warrants here.

1) How much does it cost to convert the warrants? (Not the exercise price but the fee for the paperwork+service etc.)

2) How long does it take to convert the warrants? Lets say tmr 13/05/09 I submit everything complete, when will I see the mother share in my CDS? (I heard it was something like 2 weeks, not sure)

Im still new in this stuff, sifus please help and advice. Thanks

1. around RM20.

2.Two to three weeks,check with the Registrar.

Thanks.

RM20 is per transaction? So lets say i convert 20 lots in 1 transaction, its RM20? I hope its not RM20 per lot.

Fee is per transaction.

If your account is Nominee account,you will also have to pay the broker for the paper work.the amount varies from one broker to another.Just instruct the broker to do it on your behalf.

If your account is direct,just DIY,very simple,fill up the conversion form which can be obtained from the Registrar or Company's website,attach the requisite remittance by way of bank draft and send it to the Registrar.

since warrant is near to useless or is totally useless when expire due to WA price + exercise = more than mother share price, which make it not worth it to change it to mother share..

then who will want to convert the warrant to mother share wor?

It's nice to invest in warrants and the returns are great but of course the RISK are big. I feel with a good understanding in warrants and thorough analyzing, the risk can be reduced greatly and the potential profit is HUGE.

Therefore, I would like you guys to suggest all the warrants bought and the reason for buying so that we can analyze the potential to analyze and make $$$ together.

For starter, my portfolio consists of RESORTS-CI and RESORTS-CJ.

Anyone to recommend other warrants?

RESORTS-CH, CI, CJ doesn't move a lot these days. I'm been forced to hold my shares in that.

How about TM-CI ? Do you guys think it is potential ?

Well I just bought some PBB-CJ at 0.34. Its expiry is in 09/2010 and I plan to keep it till then. I didn't really analyze much on PBB, just saw its PE at 8.XX which is kinda low I think. If PBB can hover above RM9 by mid-2010, Im happy liao.

Bros,

Let us share a bit about 2 cents Remisiers/traders wan sik kachang bout warrants.

Warrants / Call Warrants is fall into deveriatives category. Means it bears highest risk in investment term. Same category with Futures/Options.

Why? Bcoz the concept of 'leveraging'.

Warrant is a paper/loan issued by the Own Mother/Listed Company Company itself.
It want to raise money to fund something ie a project ...
Why they use warrant instead of loan?
They issue warrant without commitment on paying interest rate compare of borrowing corporate loan/bridge loan.

And when it expires, they dont pay u money, u just convert it to mother share.
Swap to REAL SHARE.

In easy sentence, they sell u a paper which they borrow your money to use for 10years for company expansion without paying interest to you.
 
Warrant lifetime is long normally 5 years to 10 years expiry.

Call Warrant is issued by 3rd party - Commercial Bank or Investment Bank.
The tenure is much shorter, normally 6 months to 12 months. (expire in 1 year or less)

Its a medium for Banks to make quick money.
(How i explain next time, too long )

i.e Bank A call warrant A for YTLPower

The name will be YTLPower-CA

e.g. 100million shares
      1.00 per 1000 shares
      american style
      exercise ratio 1: 1
        exercise price 0.80
        duration to expiry 10 years = 2019
           

U buy 100k shares at 1.0 = cost is RM100k
american style - can convert anytime to cash settlement before expiry

assume , mother share ytlp is 1.8 = so is in the money

why ?

u need 1k CW to get 1 mother share upon expiry.
ur  RM1 +  exercise price 0.8 = RM1.80 (mother share)

bcoz of the LEVERAGING concept and i believe YTLP can go higher, ill trade the CA instead of mother share.

make another e.g

if YTLP go from RM1.8 to RM2 = RM0.20 profit (11.1% again - we ignore the brokerage, give me a handicap point ok)

what is the theoritically increase price for the CA ?

1.00+ 11.1% ? =1.11 ? Wrong

is 1 + 0.2 = 1.2 (20% profit)

How about is the mother price go down from 1.8 to 0.6
it will be -0.2 , but call warrant max is 0 = what u invest is what u loss, thats why ur paper is toilet paper ...

call means go up , put means go down .

*the numbers above is exclusive of gearing / delta value / implied volatility .... which u need to factored in to goreng a CA or Warrant.

simplyfied it for readers friendly ...

happy trading

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Added on February 12, 2009, 3:59 pmBros,

Forget to say , for newbie ... dun try Call Warrant .
Try stocks 1st ...

Bcoz of the leveraging, u must know what u r buying/duin ....
thats why for Call warrant, we dun invest instead we trade...

Thanks

thanks you for sharing,
that's definitely give me the big picture of a call warrant...

how about normal warrant by the ocmpany then??

That's expire date to be exact. After that can use as toilet paper, if you have the script with you.
If you are new, my advice is not to touch warrant first
Just my 2 cents.

I googled the word "warrant and mothershare" and it directed me to this page..