Category: Money tips Release Date: 2006-06-07
Hedge position risk
If investors are already holding a company (for example, A company) can purchase warrants to hedge the stock if the company's stock will rise estimate A î–?but concerned about the possible discrepancies of the situation can be expected to spend a small amount of money from buying A's put warrants as soon as the stock fell the next part of the gains when the warrants can be used to compensate for the loss of A shares.
If projections are right î–?the stock price to buy the stock has been profitable for the loss of only a small amount of royalties.
Portfolio
A, "a combination of investments": 90% of the funds to buy government bonds and the remaining 10% of the funds to purchase warrants in order to build a security at the end of î–?model portfolio. Through this strategy could be guaranteed the principal plus interest on fixed-income bonds would also allow the leverage effect of share warrants by the underlying assets rise in income in advance of its maximum loss can also be locked up no more than 10% î—?
B, "a combination of the investment period": When the holdings of the underlying asset when the short-term gains have been large profits î–?can first sell and then 10% to 20% of funds to purchase the underlying assets of the warrants should be either way cash in some of the funds for other purposes can also enjoy the underlying assets through the warrants continue to rise, but also the benefits of a pre-lock the greatest risk of loss.
Risk of non-hedge a single investment
A, investment analysis method: First, Change the future direction of the underlying assets, there is a clear conclusion, and then to buy the corresponding subscription or put warrants. Secondly, if the underlying assets for the related warrants issued in more than one, should collect information on the underlying assets of all the information warrants, and to warrants exercisable at a price, the remaining period and compare the contents of the issuer, etc., to choose their own investment preferences Warrants . In the case of similar conditions, implied volatility should choose a smaller warrants, or the actual warrants a higher leverage ratio. Again, for further reference and to compare their implied volatility and historical volatility to determine whether it warrants the price too high.
B, under the unilateral city continued to rise regardless of the underlying asset is continued to decline, or are the best time to invest in warrants. As long as the direction of sound judgment can be accessed through the high leverage ratio î–?warrants to obtain high returns.
C, in the shock city warrants a corresponding increase in investment, but still difficult to determine the level of the underlying asset position to profit through high-throw bargain-hunting.
D, when the judgments of the underlying asset will be substantially up or down sharply when the depth of the respective purchase price and the warrant outside the put warrants to obtain high investment leverage multiples. However, if the underlying asset increases or decreases less than expected while the corresponding î–?warrants expire value may not be the right line. At this point misjudgements, risky.
Warrants investors enter the market guide answers
1, the intervention procedures that required before?
A: The pre-trade investors to participate in warrants should first deal with agents warrants qualified securities companies about the necessary warrants trading common sense, to understand the risks of the product. Investors must enter into risky securities companies may participate in the book reveal the warrants trading.
2, What is the use of warrants trading account?
A: Investors should use the A share subscription warrants securities accounts, transactions and row of the right to declare. Investor A shares if you have opened a securities account do not need to re-open an account, you can use an existing A-share trading accounts warrants.
3, warrants and stock up fall What's the difference?
A: Warrants Up decline in the absolute decline in the price is up to limit, the calculation formula is as follows:
Warrants Up (or) increase the price = closing price the day before the C of E ± (the date of the underlying securities or the price - the underlying stock's closing price the day before) × 125% × line of the right proportion of
4, investors how the warrant is exercisable for?
A: Investors lines could be increased through exchange instructions to declare the right line, line the effective date of the right to order the same day can be withdrawn; day to buy the warrants, the right of the day may be OK; but the date of the subject line of the right to obtain securities, shall not be sold the same day are available at the time to sell a trading day.
Cash settlement, the warrant is exercisable for the settlement price for the 10 trading days before the right line of standard stock's closing price average.
Warrants expire the same day, the cash payment warrants are in-the-cards, automatically the right line, the holder required to declare their commands. Warrants are securities payment method, investors can choose the right of self-declaration line or in commissioned warrant before the expiration of the securities company for the right to apply for lines.
