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Investor: What are the meanings of subscription warrant and put warrant respectively?
Li Jin: Woven wheel is the right to buy or sell relevant assets. The right to buy is called "call", and the right to sell is called "put".
If investors are optimistic about the future performance of relevant assets, they should buy subscription certificates. When the market price of related assets is higher than
At the exercise price, theoretically, investors can use the exercise price to buy related assets, and then sell them at the market price to earn the difference. Since the current warrants are all settled in cash, investors will receive the cash difference between the settlement price and the strike price. On the contrary, if the market price of the relevant assets is lower than the exercise price, the wheel will have no value and investors will lose the cost of buying the wheel.
If investors are pessimistic about the future performance of relevant assets, they should buy put warrants. When the market price of the relevant asset is lower than the exercise price, theoretically, investors can buy the relevant asset from the market, and then sell it to the issuer at the exercise price to earn the difference. In actual transactions, investors will receive the cash difference between the exercise price and the settlement price. However, if the price of the relevant assets is higher than the exercise price, the investors will lose the cost of buying the wheel.
The above profit model assumes that investors hold the warrants to maturity. In addition, investors can also make profits by buying low and selling high, which is similar to trading shares No big difference.
(This article is written by France Xingye negotiable securities Provided by Li Jin, Senior Vice President of (Hong Kong) Co., Ltd
(Securities Times)
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