Category: Money tips Release Date: 2006-04-23
With the broad market adjustments, the majority of warrants have also emerged recently dropped sharply. But market participants said that this does not mean the bubble has eliminated the risk warrants the market determines the value of the three return to the process will continue.
The intrinsic value of put warrants the risk of zero
Put Warrants class embodies the current market risk where the warrant. In the current market transactions, 26 warrants, 16 just put warrants, as of yesterday's close, these 16 put warrants have 12 of the intrinsic value of zero, meaning that if the current row of the right, this 12 Warrants There is no row of the right values. The only way to support the price of these warrants remain at the current level of factor is the theoretical time value. However, according to the future of the stock market, this time value may only be reflected in the theory, but difficult to translate into a meaningful intrinsic value.
With the shortest maturity Vanke put warrants, for example, yesterday's closing price of the warrants is 0.395 yuan, which the exercise price of 3.73 yuan, the underlying stock's closing price of A Vanke 5.32 million, the warrant is exercisable at a period of this year's August 29 to September 4. That is the next 2 months time, Vanke A shares have dropped to 3.335 yuan, its warrants in order to remain at the current price of 0.395 yuan. Even in the current real-estate shares slump circumstances, Vanke A look to the future more than two months fell 37 percent and almost impossible. Analysts generally agreed that Vanke put warrants eventually become the fate of the waste paper is almost inevitable.
For the vast majority of put warrants, the final very difficult to avoid becoming a paper's fate. Although some put warrants due to expiration date is still far, still has some time value, but this value we can only remain theoretical. There are stock reform are qualified to issue warrants a relatively large number of plates of blue-chip companies, the fundamentals are relatively stable, long-term trend in the overall market for the better cases, the hope that these stocks fell sharply in the future I am afraid that those who can only be speculation warrants wishful thinking.
Warrants the risks of borrowing against future
Relative to the put warrants, the warrants speculation to a certain extent there is fundamental support, namely: the long-term future market prospects for the better. However, one can not ignore the risk that warrants a lot of early gains far exceed the relevant underlying shares rose can bring support, and even has largely overdrawn expectations.
Baosteel recently due date in order to warrants, for example, since May, the warrant was once the largest increase over 90%, while the largest increase during the G Baosteel less than 20%. Although the warrants are leveraged, but the gains are clearly far more than can bring up a reasonable share magnifying effect, but more should be noted that such a warrant or Baosteel has always been built on its being a severe and highly estimated basis. According to yesterday's market prices, Baosteel warrants only the intrinsic value of 0.04 yuan, but its price was as high as 1.214 yuan, while its maturity just over two months ago, which means that G Baosteel to be in 2 months period from the current 4.24 to 5.414 yuan upwards in order to support its current prices, the possibility is clearly not.
Even for those rows of the right period of the warrants is still far away, its overdraft risk Bukebufang. To first warrants, for example, that the warrant is exercisable at a period in April next year, only the intrinsic value of its latest 0.26 yuan but even after the recent sharp decline in the current price of the warrants is still as high as 2.59 yuan, G's first within the next 10 months, the price upwards from the current 466 to 6.99 yuan to support the price, rose to reach 50%. This possibility, though not non-existent, but the risks inherent in the potential is far greater than the benefits.
Warrants operational risk investors
Instead, as with the stock and launch an innovative product, although the warrants the re-emergence in the domestic stock market for 10 months, but investors understanding of the product there are many errors. The existence of these errors are often small and medium investors in the investment warrants will bring a lot of time operational risks.
The first is T +0 operational risk. The reason why a lot of courage to participate in small and medium investors warrants speculation, largely fancy their T +0 trading system, saying that Kuaijinkuaichu not cause too much damage. However, according to reporter learned from the market situation, many small investors have endured a T +0 bug. Many small investors, the use of the C of E T +0 system in and out, but the fear of risks in the operation of fear and trepidation, the result is often difficult to grasp the rhythm of the market, often to buy low and sell high. Greater risk is that many investors to invest in ways to hype the stock warrants, after the high bid, once down to continue to hold, blind faith would soon be pushed up again, the result is often lost their capital.
Second, the warrant is exercisable at a risk can not be ignored. Only the right to enter the line from the first phase of the airport put warrants (Airport JTP1) line of the right to look at, some investors warrants to the right line, which should not be the right line is still a lack of understanding of knowledge, so that there at the airport JTP1 lines emerged in the course of the right to misuse the right line of the phenomenon, when the warrant price increases are much higher than the stock market when the exercise price, some investors chose the right line, resulting in unnecessary losses. In part, analysts view, the warrant is exercisable at a greater risk is that, due to the expiration date of the warrants do not know the right line, or a lack of knowledge, investors might not warrant the duration before the end of the right to sell the warrants or forgotten lines , the result is likely to be OK regardless of whether the warrants the right to value, and ultimately will be the paper one.
