Primary dealer of warrants GF Securities Guo Yong
After the festival, the topic of stock index futures has heated up again. So, in addition to the conceptual differences, what are the differences between warrants and stock index futures in terms of investment practice?
In terms of product characteristics, both stock index futures and warrants have leverage effects to amplify capital, but their principles and effects are different. In stock index futures trading, only a small amount of margin is required to operate. At present CSI 300 The margin level of stock index futures is temporarily 10% of the contract value. Based on the closing index of 5675 points on Tuesday, the contract value of a stock index futures is 1.7025 million yuan, so it only needs to pay about 170000 yuan of margin (excluding the margin of futures brokerage companies) to buy and sell a contract, and the capital is amplified by 10 times, so the actual leverage size is relatively stable; However, the actual leverage effect of warrants depends on the sensitivity of the warrant price to the changes in the price of the underlying stock. The higher the sensitivity, the greater the leverage effect. Therefore, the effective leverage of each warrant is different, and the effective leverage of the same warrant at different times is also different. At present, the effective leverage of most warrants is less than 2 times, but sometimes the effective leverage of warrants can be as high as dozens of times. Therefore, whether the effective leverage of warrants is higher or the effective leverage of stock index futures is higher, stock index futures and index warrants can not be generalized.
At the same time, because the rights and obligations of the buyers and sellers of stock index futures and warrants are different, there are significant differences between the two in terms of risk. Once an investor holds a futures position, due to the daily settlement mechanism, the investor may need to continuously add margin when the market is developing in the opposite direction, and even face the risk of cutting positions or being forced to close positions in extreme cases. The buyer of warrants has rights rather than obligations, and investors only need to bear the risk of price changes overnight. Therefore, as far as many strategies are concerned, the flexibility of warrants is far beyond that of stock index futures. For stock index futures, there are only two options: buy and short, and the results are only right or wrong. For warrant investors, they can choose different exercise prices and maturity dates to adjust and manage related risks. They can implement their strategies according to different judgments of the market and their desired risk reward relationship, such as choosing cheap high leverage warrants to win excessive profits, or low premium warrants to resist adverse risks. If it is wrong, the loss is limited, and it will not be destroyed like the stock index futures.
