Category: Money tips Release Date: 2006-01-02
Warrants nothing more than the price of its ordinary shares from the price, implied volatility and time value of other major factors. Three of which are share price information can be obtained at any time, and time values have already been anticipated, The difference is that a longer period of time to decline in value of warrants slower, shorter period of time value of warrants fell more urgent. On the contrary Implied volatility seems to aircraft "black box"-like, carrying important information, but heard enough, we prove that small (I do not know if readers know that the "black box" is not black).
Warrants are now involved in the sale of the Hong Kong market investors happy than before, because in many different ways can be implied volatility information. In recent years, many financial newspapers and magazines, the price list have joined the implied volatility of the data, listing more than the closing price of dollars out of an implied volatility. Want to know real-time market data, investors can refer to the issuer's warrants website (the data generally have a one-hour delay), and even more advanced information systems or for investment in the development of warrants for instant online quotation system. These data warrants allow investors to compare between the high and low implied volatility. The Mainland's this kind of information is still unable to check, I believe that with the increase in the number of warrants, the market capacity is increasing, and relevant information will be more and more.
Some people think that, when implied volatility is higher than when the widening gap between the historical volatility is not appropriate to invest in warrants, the warrants because of suspected high prices, there may be more downward pressure.
However, the implied volatility and historical volatility of the trend is to be consistent? To a very long term, the answer may be the same, but the short term that implied volatility may be higher or lower than historical volatility. Because implied volatility is the market share of future volatility is expected in the absence of prior history, implied volatility is different investors on the market consensus expectations of future income; compared to the historical volatility has become a reality, of course, can be high, but also may be low.
For example, when the stock is about to announce results, but the market is generally agreed that the performance did not become clear, or the market's future political and economic environment are worried, the implied volatility may rise, reflecting the future "risk premium." During this period, although the percentage changes in stocks are not, but the implied volatility and historical volatility of the gap may be expanded.
Then, for example, are changes in assets of the company shares, which includes increased high-risk projects (such as the company's main source of income from the rental income into telecommunications, or by public transport into a real estate development), the market is expected to share the higher the volatility of the future However, the risks involved have not yet reflected in stock prices. Or is the market share will occur is expected to share placements, issuance of new shares and so on, there will be the gap between implied volatility and historical volatility of the expansion.
Historical volatility and the widening gap between implied volatility, implied volatility does not mean that there will be immediate downward pressure on investors to consider is whether this gap can be long. (In the published results, placement of shares and other activities, when "rumors" from becoming reality, as is expected to become a part of history, after the elimination of uncertainty in the market, implied volatility will fall. To being the structural unit of the company's business changes, the stock price will be confirmed market expectations, while the historical volatility of implied volatility to the extension will be gradually narrowed the gap between the two).
If grasp the rise in the implied volatility on track to buy warrants, investors have the opportunity to share from the positive trend in the trend and volatility, to double profit; but can not accurately tell the time, in the implied volatility down from the peak when the bid acceptance stock certificates, but also, unfortunately, are stock market outlook wrong, then investors want to see is the same situation.
In short, when the implied volatility is higher than the widening gap between the historical volatility, investors can price as the warrants than in the past on the high side, but whether it should be a reasonable, if they would be higher, this is to think about .
