Primary dealer of warrants GF Securities Liu Siling
The warrant investment strategy is different from investing in regular stocks. First, it is not possible to study the rise and fall of the warrant price simply by using technical analysis methods like investing in stocks. Second, the warrant has a maturity date, which is not long-term effective. Therefore, professionals usually advise investors to operate warrants on a short-term basis. So, can warrants replace stocks for long-term investment?
In fact, in principle, long-term or short-term operations are OK, mainly depending on whether investors think that there is a corresponding rise (fall) in the duration of the stocks, and how much risk they can bear.
with Wanhua HXB1 For example: Wanhua subscription was listed at the end of April 2006. Up to now, its price has risen from about 9 yuan at the beginning of listing to 31.031 yuan at the closing of yesterday, with a cumulative increase of more than 240%. If investors are optimistic in early April 2006 Yantai Wanhua Wanhua subscription was purchased at the price of 9 yuan per share, and the long-term investment philosophy was adhered to. The income has reached 244.78% based on the closing price on January 18, 2007. In the long run, Wanhua subscription has brought generous returns to the holders. However, a careful observation of the long-term trend chart of Wanhua's subscription shows that its operating trend changed in May, June and August 2006. I'm afraid most investors have not felt the profit effect of Wanhua's subscription, because although they are optimistic about the long-term trend of Wanhua's shares, they will always pay attention to the possibility of market correction, Protect your profits or funds by stopping profits or losses in time.
Assuming that the investor bought Wanhua Subscription on April 28, 2006, the return will reach 96.06% at the close of May 15. In order to cash in the book return, the investor is likely to sell the warrants immediately; If investors did not stop earning as planned, the result was a sharp drop of 9.75% the next day, and the return rate dropped to 76.95%. If investors are full of confidence in Wanhua shares and continue to hold them, the subscription price of Wanhua will fall to about 11 yuan a month later, and it will be eliminated with a profit of 20%. Even if the firm belief continues to hold, it is very likely that Wanhua will lose confidence in the shock and downturn in August. The lowest price of Wanhua's subscription in August was only 8.91 yuan, basically the same as that at the beginning of listing. Seeing that the money earned has been returned to the market, it is very likely to leave the market with heartache. In fact, most of the investors who really made a lot of profits in Wanhua's subscription entered the market at the end of August 2006 near the lowest price in history and have held it up to now.
