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American style
Means that the warrant can be exercised at any time up to and including the expiry date.

Conversion ratio
The number of warrants that must be exercised in relation to one share or an underlying parcel of shares.

Call warrant
A contract giving the holder the right, but not the obligation, to buy a share for the exercise price at a future date. (See also European Style and American Style.) Taking up this right is known as “exercising” the warrant.

Delta
The Delta of the warrant represents the relative change in the value of the warrant to changes in the value of the underlying share price.

European Style
Means that the warrant may be exercised only on the expiry date.

Exercise Price
Fixed price at which a warrant holder may buy (in the case of calls) or sell (in the case of puts) a share.

Expiry Date
Expiry date is the last day on which a warrant may be exercised.

Gearing
Simple gearing is the ratio of the share price to the warrant price. Effective gearing is the simple gearing multiplied by the warrant’s Delta. Delta measure of the relative change in the warrant price to a change in the price of the underlying.

Intrinsic Value
The amount a warrant would be worth if it were to expire today; the difference between the underlying price and the exercise price per share, divided by the conversion ratio.

Put Warrant
A contract giving the holder the right, but not the obligation, to sell a share for the exercise price at a future date. (See also European Style and American Style.)

Time Value
The additional value of a warrant (if any) over intrinsic value due to the remaining term of the warrant, and its limited risk characteristics.

Volatility
A measure of the variation in a price over time.

Warrant
An option contract traded on the JSE issued by an institution such as The Standard Bank of South Africa Limited.