Category: Money tips Release Date: 2006-06-23
Baoshan Iron and Steel fell 7.80 percent yesterday, warrants, traded 522 million copies, while the underlying shares of Baoshan Iron and Steel fell 1.55 percent the day, warrants implied volatility decreased slightly, stir-fried with the trend of low tide.
With the listing of Baosteel warrants, investors have a deeper understanding of the warrants has also produced a lot of misunderstandings, such as the detached market funds that warrants that the broker covered warrants issued by listed companies for the financing and so on. In fact, this is for equity warrants and covered warrants due to confusion between the two concepts.
Warrants can be divided into different according to the issuer: Equity warrants and covered warrants, the two main differences are three points:
(1) issued Purpose: Equity warrants are issued for the financing of listed companies; covered warrants are intended to meet the customer's investment needs.
(2) Issuer: Equity warrants are usually issued by the listed company itself; covered warrants on the underlying assets by an independent third party other than the issuer (usually a reputable broker, etc.) issued.
(3) The dilution effect: Equity warrants expire implementation, is a listed company issuing new shares and to sell the warrant exercise price the holder; and covered warrants expires, if the stock settlement, but the old hands of the transfer of shares from the issuer to the warrant holder does not involve a listed company issuing new shares will not cause an increase in the total share capital. If the cash-settled, but will not cause the total share capital of the underlying stock changes.
Popular for covered warrants is called covered mainly refers to the hands of its issuer with sufficient underlying stock for warrant holders of the stock exchange at maturity. Specific to Baosteel Warrants, the Baosteel JTB1 can be regarded as issued by the Baosteel Group, covered warrants, but it is with the general brokerage covered warrants issued by Baosteel, compared, although the terms may be the same, its operating mode puts a very different experience.
First of all, the transaction prices. The former due to various reasons, prices deviate from the theoretical value by a big margin, but for the latter, because the broker can continue to issue, will be fully capable of providing liquidity and make them remain at a relatively reasonable price range.
Secondly, the impact of Baosteel trading volume. Baoshan Iron and Steel Group has 10 billion shares on the G-Baosteel, Baoshan Iron and Steel JTB1 They released is no longer need to buy the underlying shares to hedge, while the brokerage Baosteel covered warrants issued after a lot of money will be spent on the sale of Baoshan Iron and Steel shares to avoid the risk of their own For example, if the warrants issued by the actual leverage ratio of 3, out of 200 million yuan were issued warrants, it will be 6 billion yuan of funds have been invested in the stock market used to buy shares of Baoshan Iron and Steel, which is obviously not the detached market funds, but will bring a large number of new funds. And as the issuer ongoing hedging transactions, will significantly enhance the level of activity Baosteel deal. This effect of equity warrants and Baosteel JTB1 are not.
Finally, the link with the listed companies. Equity warrants are issued for the underlying assets corporate finance, while the broker covered warrants issued by Baoshan Iron and Steel, but with Baosteel as the underlying assets, in addition, no relationship with the listed company, but not for the Baoshan Iron and Steel equity financing. In fact, one of the underlying assets, all eligible financial institutions, many of the provisions can be issued the same or a different covered warrants.
