Haitong Securities Guo Zhiwei
Warrants have the advantages of high leverage, risk hedging and easy financing, and are welcomed by investors and listed companies. The issuance and listing of warrants strongly support the process of share reform and the financing of listed companies. However, recently speculative funds have over hyped the deep out of price put warrants, making the price of the deep out of price put warrants seriously deviate from its value, unable to reflect the function of warrants as a low-cost risk management tool and efficient investment tool, affecting the efficiency of warrant pricing, interfering with the rational judgment of investors, and not conducive to the healthy development of the warrant market. Therefore, the excessive speculation of put warrants has become the focus of the market.
The reasons for the over speculation of put warrants in the near future are mainly as follows: first, the imbalance between supply and demand, hedging shares There is a serious shortage of derivatives with downside risks, and the withdrawal of a large number of put warrants before the end of May has greatly reduced the number of put warrants issued with the share reform, and the capacity of put warrants is limited; Second, before the launch, the absolute price of put warrants was low and the market value in circulation was small. Its high leverage increased the fluctuation of price and price. The T+0 trading system gave the warrants greater liquidity, which was conducive to speculation. However, most of the existing warrants were not affected by speculative forces this time because of their high absolute price and low leverage; Third, the sudden profit effect attracts attention. All kinds of participating funds temporarily ignore the hidden high risks for the sake of high returns.
Based on the above main reasons for excessive speculation in the put warrant market, we suggest that we should continue to increase the supply of warrants, advocate rational investment, suppress excessive speculation, and promote the price return to value:
1. We will launch covered warrants as soon as possible. The issuance of covered warrants by qualified securities firms will fundamentally increase the supply of warrants in the post share reform era, and in coordination with the free issuance mechanism, the continuous issuance mechanism and the creation mechanism, it can more effectively increase the market scale, balance market supply and demand, and promote the development of the warrant market.
2. We will further play the role of creating mechanisms to curb excessive speculation. The creation mechanism, like the continuous issuance mechanism and the free issuance mechanism widely used in the international warrant market, belongs to the internal pricing mechanism of the market, which has the dual functions of arbitrage and short selling, and helps to curb the extreme imbalance between supply and demand. When the warrant price is overvalued, the creation mechanism can increase the supply and stabilize the price. When the warrant price tends to be reasonable, The founder can buy back and cancel to stabilize the market price. The founder will make decisions on the timing and scale of creation according to the market situation and its own strength, and play the role of spontaneous adjustment within the market to make the market pricing more effective. Facts have proved that the excessive speculation of CMB put warrants has been effectively curbed since the securities companies increased their efforts to create them.
3. Strengthen risk education for investors. The regulators have taken many effective measures to curb speculation. Securities companies should continue to increase risk education for investors, so that investors can fully understand the following points: First, the current put warrants are deep out of price warrants, which are highly likely to become waste paper when they expire. No matter how unbalanced the supply and demand of the current put warrants are, how powerful the speculative force is, As an investment variety with a duration, its value iron law will inevitably be reflected when the warrants expire. Participants can learn real and profound lessons from the fact that deep out of price put warrants on previous doomsday realized value return through sharp decline; Secondly, due to the lack of value support, put warrants may plummet at any time, and once they plummet rapidly, they may even have no time to stop losing. Short term investors affected by the earning effect should also fully realize the huge risks hidden by this "foolishness" behavior. In addition, we should remind investors involved in warrant trading to read carefully when signing the Warrant Risk Disclosure Statement, truly understand the risk factors, learn relevant rules and information before making decisions.
