OMO but few traders exercise the call / put option on a warrant (reasoning that if they had wanted the share, they would have bought / shorted the share in the first place). SimonPB might have some stats from SCMB w.r.t. number of traders who exercise? Due to time decay on vanilla warrants most folk hold onto warrants for short periods of time, and certainly not till expiry, even if in the money (i.e. secondary market stuff only) With vanillas, due to the way that BS works, it is generally not in your best interests to exercise the thing - selling the warrant back to the issuer (or better still, another trader) before the expiry date is generally worth more. But if you did exercise, yes, ex is right - could buy the share at the exercise price [if call], or you could sell your shares at the exercise price [if put] No of shares 'bought' [or sold, if you have a put] = No of warrants held / Cover Ratio OMO, but I would steer clear of 'vanillas' entirely. Share installments (if long), Ssfs (long & short) and even WAV's (long and short) give you leverage, and except for SSFs also cost fixed R50 in and out :) The "cost of money" on these instruments for the gearing isn't nearly as hairy as the time decay on vanillas (but obviously there are other risks, notably barriers for WAVs and theoretically unlimited risk with SSF's [but in practice you will be closed out if can't meet margin etc]) Crossing the bid / offer 'spread' on vanillas is also often quite awful - e.g. 25/26 = 4% - might be what ex is what referring to as 'entry' vs 'exit' cost?
