**American Style** – Warrant can be exercised any time prior to expiry.

**At the Money** – If the share price is at a level equal to warrant exercise price, the warrant is at the money.

**Capital Fulcrum Point** - The annual compounded percentage growth rate required from the underlying share price for the investor to do equally well on his investment in the associated warrant on expiry.

**Delta** - The magnitude of the warrants price movement in theory in response to movement in underlying share price.

**Effective Gearing** - A more accurate measure of a warrant’s gearing. It adjusts for the delta of the warrant.

**European Style** – Exercise of warrant only possible at the expiry.

**Exercise Price** - The predetermined price that the warrant holder is entitled to purchase or sell the underlying security

**Exercise Ratio** – The number of warrants required to exercise into one share of the underlying security

**Expiry Date** - The date after which the warrant holder loses the rights to purchase or sell the underlying security.

**Gamma** – A measure of the rate of change of delta

**Gearing** – A measure how many times (units) of warrants one can purchase with an investment in the underlying security or mother share. It is a ratio of mother share price over warrant price

**Historical Volatility** - A figure derived from the price action of the underlying security using statistical calculation.

**Implied Volatility** - A figure derived from warrants pricing formula when we input the current warrant price and work backwards to derive the (implied) volatility figure. It represents current market expectations of the future volatility of the underlying security.

**In the money** - If the share price is above the warrant’s exercise price, the warrant is in the money and has intrinsic value.

**Intrinsic Value** – The difference between the underlying share price and the warrant’s exercise price.

**Out of the money** - If the underlying share price is below the warrant’s exercise price, the warrant is out of the money and has no intrinsic value. It only has time value.

**Premium** - measures how much more (in percentage term) an investor is willing to pay for in excess of the market value of the underlying security today in order to gain an opportunity to enjoy greater return by buying the warrant.

**Rho** – The sensitivity of the warrant price in response to a change in interest rate

**Time Value** – It is the difference between the warrant price and its intrinsic value.

**Theta** – The sensitivity of warrant price to the passage of time.

**Vega** – The sensitivity of warrant price to a change in volatility.