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Last Friday, CIMC Warrants staged another doomsday round, closing down by 90% at the price of one cent. Starting this week, CIMC and OCT A The warrants will enter the exercise period. Although the Shanghai and Shenzhen Stock Exchanges often remind of the risks of warrant trading, some investors still confuse warrant trading with stock trading because they do not understand warrant trading, and think that good warrants should also be "covered", thus missing the opportunity to sell the warrants in hand or forgetting to exercise. This issue will introduce the basic points of warrant trading.
Warrants are index negotiable securities If issued by the issuer or a third party other than the issuer, the agreed holder has the right to purchase or sell the underlying securities from the issuer at the agreed price within the specified period or on a specific maturity date, or collect the settlement difference in cash settlement. The underlying assets of warrants can be individual shares or a basket shares , index, commodity or other derivative products. According to the way of exercising rights, warrants can also be divided into call warrants and put (put) warrants, that is, the right to buy or sell the underlying assets. In China, the first batch of warrant trading varieties were launched for the smooth progress of share reform. At present, there will be only 6 share reform warrants in Shanghai and Shenzhen Stock Exchanges, and the rest are separable debentures.
Essentially different from stock investment, operating warrants is not suitable for "covering", which is also determined by the rules and characteristics of warrant trading. First of all, the warrants are T+0 transactions, that is, the warrants bought on the same day can be sold on the same day, which has the characteristics of frequent transactions within a day. Secondly, the time value of warrants will gradually decline with the approaching expiration of warrants. Therefore, in order to prevent the time value from being consumed too quickly, short-term warrant investment is more cost-effective, which is also the reason why warrant trading cannot be "covered". Finally, the warrant has a certain period of time, and the transaction will be terminated upon expiration. The warrant holder shall pay attention to and understand the duration of the warrant in a timely manner through various means such as the warrant issuance prospectus, the listing announcement, and the suggestive announcement issued by the warrant issuer, so as to avoid losses due to failure to sell the warrant or failure to exercise. In addition, in terms of trading costs, only commission is required for warrant trading, and no stamp duty is required. The maximum commission is calculated at 3 ‰, but no less than 5 yuan for a single transaction.
Our reporter Zhang Yufei
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