Call warrant is defferent with warrant

In previous post, i describe about warrant, but please bear in mind call warrant is different with warrant.



For a warrant, it can be converted to mothershare at anytime before the expire date. To convert it take about 10 days. While for call warrant, it cannot be converted at anytime, instead, you will get back the value of the warrant upon maturity. In another word, the call warrant have a mature date, on this day, the call warrant will be stopped from trading, and the company will give you the money of how much the call warrant worth.



To deferential call warrant & warrant is to read the name or symbol. Mothershare's symbol + WA/WB/WC is ordinary warrant & is convertible. Call warrant have CA/CB with the mother share's name. Example : YTLPOWER-WB, ANNJOO-WA are convertible warrant while MAYBANK-CJ & PBBANK-CJ are call warrant.



Here i give an example : Today, ABC is trading at RM 5 and is call warrant is at RM 1 with excersise price of RM 5 & will be matrued in 1 year. Mr A bought ABC-CJ at RM 1 but he cannot convert the warrant. Upon the maturity - Case 1: ABC trading at RM6, the call warrant worth RM 1(refer my previous post to know how to calculate the value). In this case, company ABC pay Mr A RM 1.



Case 2 : ABC trading at RM 10, ABC-CJ worth RM6. Company ABC pay Mr. A RM6

Case 3: ABC trading at RM 5, ABC-CJ worth exactly RM 0, Mr.A get back nothing and loss everything from his investment.



The concept is just the same with convertible warrant, just it is not convertible and somebody have to hold it and wait until maturity date.

I bought PBBANK-CJ at 0.385 and now it is trading at 0.62, say if tomorrow is the maturity day and today close at 0.62. So Public Bank will have to pay me RM0.62/unit of PBBANK-CJ i own. But if the PBBANK-CJ is a WB ( if it is a convertible warrant instead of a call warrant) i'll have to convert the warrant to mothershare if i can't sell it.