Primary dealer of warrants GF Securities Liu Siling
This column has repeatedly mentioned the investment essentials of short-term warrants: for short-term warrants out of the price, the time value loss is the most serious. In the last month before expiration, the time value loss can easily erode 5-10% of the warrant price every day, so it is better for conservative investors to avoid such warrants. But for short-term in price warrants, investors need to see the level of their premium and the actual leverage. Wanhua subscription and Wanhua put, which are less than one month from the expiration date, are currently in the price and out of the price. The author's ideas are as follows:
recently Wanhua HXB1 The premium has been between - 5% and - 10%, which means that the total cost of warrant exercise (exercise price+warrant price adjusted according to the exercise proportion) is 5% to 10% lower than that of direct purchase of positive shares without transaction costs and assuming that the stock price remains unchanged. In addition, the transaction costs of warrants are low, which can save the payment of stamp duty Yantai Wanhua As for the investors of stocks, they can buy the warrant instead of the regular stock and get the stocks when they hold the warrants and exercise when they are due. This strategy will be more cost-effective. However, as the warrant is a European style warrant, it cannot be exercised immediately. If the price of positive shares is significantly adjusted during the period, the warrant will also follow the adjustment of positive shares, and investors still face certain risks. Therefore, after considering the expiration time limit of warrants, investors should make a clear plan according to their risk tolerance: when to cash in and make profits, when to stop erosion and leave the market, and whether they will close their positions before the expiration of warrants.
But due on the same date Wanhua HXP1 At present, it is out of the deep price. Recently, transactions have been active and turnover has been active. Doesn't that mean that Wanhua HXP1 has a lot of capital to participate in and is worth investing? Actually not. If you buy Wanhua HXP1 at 1 yuan and the strike price is 9.22 yuan, your break even point is 8.51 yuan (9.22-1/1.41). The lower Yantai Wanhua's share price falls on the exercise day, the greater the return. However, at present, the share price of Yantai Wanhua is about 34 yuan (that is, outside the deep price), and there is little probability that the positive share price will plummet by 75% compared with the current level in the remaining less than 20 trading days. Moreover, the extreme outside price of Wanhua HXP1 is not sensitive to the fluctuation of positive shares, and it may not closely follow the price change of positive shares. Investors may lose all the funds invested when the warrants expire. Therefore, investors should actively control risks and sell warrants on or before the last trading day (April 19).
