How to Calculate Gearing, Premium & Cash Settlement for Call Warrants?

Call Warrant is an alternative investment that investor can invest in Bursa Malaysia. It can be traded through remisiers or via online trading, which is similar to trading shares.

The advantage of call warrants is that, it has unlimited upside similar to buying the underlying asset, but the loss is limited to the amount initially invested in the call warrant.

In order to make trading decision, normally investors look at gearing, premium, cash settlement & expiry date.

Below is the formula to how calculate call warrant gearing, premium and cash settlement. Alternatively, you may want to use free online call warrants calculator. The online calculator will calculate these parameters together with the trading profit or loss.


Gearing = Underlying Price
Warrant Price x Exercise Ratio


Premium = [(Warrant price x Exercise Ratio) + Exercise Price] – Underlying Price
Underlying Price

Cash Settlement

Cash Settlement = No of Call Warrants x 1 x (Closing Price – Exercise Price)
Exercise Ratio


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