Joe,

Thanks for leading this discussion. I have already learned some new perspectives. I want to confirm the "simple" math behind your graph. Please correct any errors in the following formulae assuming $10,000 investment:

Options ($5 call, $1 cost): 10,000 * (pps - $5) - $10,000

Warrant ($1 cost): 10,000 * .60 * (pps - $2.40) - $10,000

If these formulae are correct, warrants outperform options at a price per share between $2.40 and $8.90. For example, at a PPS of $4.07, the warrants breakeven, but the options are a $10,000 loss. Beyond $8.90, the options start pulling away at an exponential rate (as your graph suggests).