Category: Money tips Release Date: 2007-04-29
Baosteel Warrants will be listed next Monday. This is the market after an absence of nine years after the warrants product for the first time back to China's securities market by investors of great concern. Warrants a small broad-based leverage, T +0 trading system and the market will fry every new expectations of many investors, including small and medium investors eager. Baosteel warrants, taking into account the smaller plate, together with the fund may be locked part of the flow of the market value of Baosteel Warrants may only equal to the size of a pocket-sized A shares, which further enhanced hopes on small and medium investors were sensation in the mentality of Baosteel Warrants . However, experts advise small and medium investors to see the opportunities warrant the same time, the risk of their reserves, there should be a clear understanding.
LI Rong-Chang Wanguoceping analysts believe that the 10 years since the first publicly traded warrants only species, Baosteel Warrants will no doubt be an eye and a lot of hot money market concerns, the initial price is not too low. But the market pulled up on the adoption of Baoshan Iron and Steel Baosteel stock speculation warrants or warrants in order to influence speculation in shares of Baoshan Iron and Steel is not the idea of the reality. On the one hand, Baosteel more than 200 billion market capitalization of a percentage point means that Baosteel has raised the need to pay 2 million in funding, through the lifting pull Baosteel's shares to achieve higher profit warrants unrealistic. On the other hand, even if the warrants jumped 100% or even 200%, it simply means that the market is expected a year after the price of Baosteel will reach 6.5 yuan or 7.5 yuan, and will not impact the current performance of Baosteel. More importantly, the Baosteel's stock holders of the majority of institutional investors, they will be relatively rational way to look at the impact of the trend warrants Baosteel Baosteel's position more by the overall iron and steel plate and the entire blue-chip location constraints, not may be just due to soaring prices of warrants will appear Baosteel (Information Quotes Forum) skyrocketed.
According to SSE relevant responsible person said that in order to prevent abnormal trading warrants, SSE has prepared a strong regulatory measures, including the development of a special monitoring system, set up a special monitoring posts to ensure the normal warrants secondary market transactions carried out. In addition, many people do not seem fully aware, in order to prevent the price of Baosteel warrant deviation from its value, SSE in the trading system has made arrangements, "the Shanghai Stock Exchange Warrant Interim Measures," provides that "have been traded warrants, Qualified institutions can create the same kinds of warrants, "qualified securities companies and other institutions can at the right time to issue additional shares of Baoshan Iron and Steel covered warrants, which will greatly increase the potential supply of Baoshan Iron and Steel warrants. This institutional arrangement is the so-called "continuous creation of mechanisms", is an international movement inhibition of excessive speculation warrants an effective tool. The author noted that the SSE has identified and Guoxin Guotai Junan securities Baosteel Warrants a dealer. A dealer obligation to provide liquidity trading warrants, warrants to maintain price stability. Likely when necessary, by the two dealers to assume a continuous creation of Baoshan Iron and Steel warrants task. The institutional arrangements will undoubtedly greatly inhibit excessive speculation Baosteel Warrants.
LI Rong-Chang reminded the retail investors, the value of warrants by the time of the impact of gradually shrink over time, if the operation according to the stock ideas, stuck waiting for some sort of relief after the long-held, or continue to cover their short positions, the risk significantly, and may even original capital No go. Baosteel Warrants listed on August 22, August 30, 2006 expiration, with the expiration date approaches, the time value of warrants included will gradually shrink, the price of Baosteel Warrants will return to its true value, and gradually close to the price of Baosteel and the warrant is exercisable for the difference between the price of 4.50 yuan, and if it becomes out of the money warrants, then the cost for the paper one.
Warrants the product a big advantage is its leverage effect. But should understand that leverage is a double-edged sword, if the investor warrants corresponding to the trend of the underlying asset afternoon sound judgment, then the warrant return on investment may be much higher than the underlying assets, return on investment. However, if the judge errors, you might lose everything. This is a significant difference between warrant and stock, used retail stock investors should be cautious of this approach. LI Rong-Chang suggested that if investors had originally intended to correspond to the number of shares subject to buy instead of buying the underlying stock warrants, to the use of funds under control, rather than join together to purchase warrants, you can better control risk, because investors maximum loss is the premium. As the warrants prone to sharp price fluctuations, thus the need for close attention to post-purchase warrants and the warrant itself, the underlying securities price movements, if not always stare plate, it should try to avoid investing in warrants.
There are experts suggest that if the investor to determine Baoshan Iron and Steel shares will be sideways, or callback period of time, should sell the Baoshan Iron and Steel warrants, etc. after the purchase is completed to determine the callback order Baosteel warrants, it can avoid the unnecessary loss of time value, Even if the hold-up should also promptly stop. If investors to determine the time remaining within the permit price of warrants into the probability is extremely small, in general should try to sell the warrants, so as not to be losing time value. Of course, the lower the value of warrants at this time, those higher risk appetite investors can also use this time of high leverage, to win the underlying share price could surge or gains arising.
In short, the warrants as a certain complex derivative products, their fair value determination and their grasp of the trend more professional, small and medium investors to invest the time involved in warrants must be fully prepared at all times maintain the A sober.
