The call and put warrants JTB1 and JTP1 of WISCO finally came to a successful conclusion, leaving many valuable lessons and enlightenment to the market. The straddle warrant portfolio is an innovative product jointly designed by the listed company and GF Securities in the process of WISCO's share reform, and is called "butterfly warrant" by the market. As a result of coincidence, with the cooperation of various conditions, this pair of warrants had a cumulative increase of more than 200% in the last month, which made investors see the unique style of butterfly warrants and the wonderful speculation of the doomsday round.
The main feature of this pair of warrants portfolio is that it is composed of a call warrant and a put warrant, and the exercise price of the call warrant is higher than the exercise price of the put warrant. In this way, from the perspective of the warrant yield chart, the value line of the portfolio constitutes a butterfly with two wings spread above the horizontal line, that is, the value of the portfolio will be greater than zero no matter where the positive share price of WISCO is, Investors will get at least 0.21 yuan (2.83-2.62=0.21) in the warrant portfolio, and when the stock price is higher than 2.83 or lower than 2.62 yuan, the value of the portfolio will increase with the fluctuation of the stock price. Obviously, this is very different from the share reform companies that only give one type of warrant, because if only give subscription warrants, if the stock price in the exercise period is lower than the exercise price, the warrants obtained by investors in the share reform will become waste paper; On the contrary, if only put warrants are sent, if the stock price in the exercise period is higher than the exercise price, the warrants will also become waste paper. Therefore, the market is also worried about the resulting game between major shareholders (warrant issuers) and small shareholders of listed companies. The butterfly warrant would not have this defect, so it was widely welcomed by the market and was followed by many stock reform companies later.
The more exciting part of the warrant portfolio lies in the secondary market. Whether the stock price rises or falls, it will always benefit one of the warrants. If the warrant is close to maturity, the time value of the warrant is nearly exhausted, the premium rate is low, and the leverage magnification rises to a higher level; At the same time, the price of the positive shares happens to be near the exercise price. At this time, the greater the fluctuation of the positive shares, the greater the increase of the warrants. It may form a situation where two warrants rise and fall one after another, bringing many opportunities for investors to make huge profits. WISCO warrant is the first warrant with the characteristics and effects of doomsday round speculation in the domestic warrant market. At this time, theoretically, the value of warrants will also change by 1 cent every time the stock price changes by 1 cent. The stock price is used as the denominator for the rise and fall of equity shares, while the warrant price is used as the denominator for the rise and fall of warrants. The leverage effect will be very obvious. For example, when WISCO subscription started from about 0.4 yuan, the leverage was about 7.2 times, and when WISCO put started from about 0.06 yuan, the stock price was 3.17 yuan, and the leverage was about 52.8 times. Once the market conditions match, the increase will certainly be amazing.
(GF, the primary dealer of warrants negotiable securities Guo Yong)
