How to make money by speculating warrants

There are two ways to make money by speculating warrants: one is to exercise, and the other is to increase or decrease the price difference in trading.

　　 Possible price difference for exercise

Warrants are divided into warrants and put warrants. The warrant holder has the right to purchase the relevant securities from the issuer at the agreed price within the specified period or on a specific maturity date. When the market price of the stock is higher than the subscription price at the time of exercise, it is called within the price, and investors can get

Get the price difference. On the contrary, if the stock market price is lower than the subscription price when exercising, it is called out of the price, and investors will not earn a penny, and the warrant is like a piece of waste paper. For example, the subscription price of Baosteel is 4.5 yuan per share. If the equity is 5 yuan at the time of exercise, 0.5 yuan can be earned per share. If the stock price of warrants of Baosteel is only 4 yuan, it will not make money.

The put warrant is the opposite of the share warrant. The agreed holder has the right to sell the underlying securities to the issuer at the agreed price within the specified period or on a specific maturity date. If the commitment to launch agricultural products is made, the major shareholders will buy back the shares at 4.25 yuan per share. When the market price of the stock at the time of exercise is lower than the put price, it is called in the price, and the difference can be obtained; On the contrary, if the market price of the stock is higher than the put price during the exercise of rights, it is called out of price, and no profit will be made, and the put certificate will become a piece of waste paper.

　 Buying warrants is like buying stocks

Warrants can be freely bought and sold in the market, and investors can earn the price difference by selling high and buying low. The price of a warrant is determined by its intrinsic value and time value, so we should pay attention to the price of its underlying stock and the remaining duration. Specifically, when the stock price rises, the price of the subscription certificate will rise accordingly, and the price of the put certificate will fall. On the contrary, when the stock price falls, the price of the subscription certificate falls and the price of the put certificate rises. As mentioned above, when the stock price of Baosteel rises from 5 yuan to 6 yuan, since the subscription price is set at 4.5 yuan, the price of the subscription certificate will also rise by 1 yuan, and the theoretical price is 1.5 yuan. On the contrary, if the stock price drops to 4.6 yuan, its theoretical price is only 0.1 yuan.

As the longer the remaining duration, the greater the fluctuation range of the stock price, the greater the possibility for investors to make money, so the greater the value, on the contrary, the smaller the value. For example, Baosteel will not exercise its rights until next year, but its share price has fallen below the exercise price of 4.5 yuan this year, which does not mean that the price of the subscription certificate is zero, because it is still possible to rise to last year, so the market price of the subscription certificate may be just a few cents. Liu Gang