Shanghai Stock Exchange investor education column
□ Ping An Securities Derivatives Department
Warrants have the leverage effect of "expanding with small" and can be traded at T+0, so they are popular with many investors. When investors have a clear directional judgment on the trend of the positive stock, they often think of buying the corresponding warrants of the stock to win leverage returns. However, since the performance of warrants is not only related to the trend of positive shares, but also closely related to their own terms, investors should carefully study the relevant terms of warrants before buying warrants.
As for the terms of warrants, investors usually pay more attention to the exercise price and exercise proportion of warrants, and also pay attention to the technical indicators commonly used in warrant analysis, such as premium rate, effective leverage, etc., but it is often easy to ignore the remaining maturity of warrants, that is, the time from the expiration date of warrants. In fact, the residual maturity of warrants is an important factor affecting the price of warrants. At the same time, with the passage of time, the residual maturity of warrants is decreasing, so investors should pay more attention to it. In addition to influencing the value of warrants themselves, the length of the residual maturity of warrants is also very important for investors to formulate warrant investment strategies.
First of all, the time value of warrants with different residual maturities will lose at different speeds. Generally speaking, the time value of warrants with a long residual maturity is lost slowly, while those with a short residual maturity are lost quickly, especially for the end day warrants approaching maturity. If investors intend to buy warrants for short term according to their judgment on the short-term trend of the positive shares, they can choose warrants with shorter residual maturity. If investors plan to hold warrants for a long time, they should not choose warrants with a short residual period, because the loss of time value may make investors lose more than they gain. Therefore, investors should choose the warrants with appropriate residual maturity according to the time when they plan to hold the warrants.
Secondly, the premium rate of warrants is related to the remaining maturity. Generally, the longer the residual maturity of warrants, the higher the premium rate; The shorter the residual maturity, the lower the premium rate. This is mainly because the longer the residual maturity, the greater the time value of the warrant. If investors do not pay attention to the residual maturity of warrants and simply look at the premium rate indicator to select warrants, they may make a wrong choice. For example, one warrant A has a remaining maturity of one year, and its premium rate is 20%. Another warrant B has a remaining maturity of one month, and its premium rate is 15%. If investors do not look at the remaining maturity of warrants, and only judge that the valuation of warrant B is lower based on the size of premium rate, but choose warrant B, it will lead to investment errors.
In addition, investors should try to avoid warrants that are nearing maturity and out of price. On the one hand, the time value of this kind of warrants is lost very quickly. Even if the positive shares change in a favorable direction, they may be completely offset by the time value loss, making the warrants not rise, or even fall; On the other hand, if such warrants are still out of price when they expire, they will become worthless and investors will lose all the principal of the warrants. At present, China Southern JTP1 is such a warrant that is nearing its maturity and is out of the deep price. Investors should pay attention to risks and not participate in the speculation of the warrant. (The article is only for reference, and the profit and loss caused by investment based on it has nothing to do with it.)
