Assume I bought W.19 @ 5.00, so with a conversion price of 40 rupees, my total cost would be 45 Rs. That means I'm expecting REEF.N to reach around 60 Rs at least so that I can make a descent gain. Now, do you see the problem here?

My gain if I buy W.19 = 60 - 45 = 15 Rs per share.

But we know that REEF.N currently trades around 30 Rs. What if I buy REEF.N directly and sell it at 60 Rs in 2015? I can get 30 Rs a share!

So, if you are buying W.19 with the above argument, you are being stupid (unless if you can point an error in my argument). On the other hand if you are buying W.19 for it's speculative nature, then that's at least justified.

Please correct me if I'm wrong

Cheers!