□ Li Jin, Director of Faxing Securities (Hong Kong) Co., Ltd
In the face of volatile market conditions, the most important thing to enter the market is to control positions. In fact, investors should also limit their positions to the level they feel comfortable at any time. If they buy too much, they will often make mistakes due to pressure. If it is planned to enter the market to buy the bottom, when taking some defensive warrants as the first choice, if it is just a short-term game rebound, it is necessary to strictly stick to the stop loss position to avoid being penny wise and pound foolish.
When the positive shares are in a weak position, bottom hunting should be prudent. It is better to pay attention to some warrants with strong defensiveness and low leverage, such as those with longer maturities, those with discount or even those with slight price, because risk management should be taken into account and too much progress should not be made.
In terms of strategy, the positive shares may have to repeat at a low level for a period of time. If the deployment of bottom hunting in the middle line is made, the warrants may have to bear a decline in a short time. When choosing warrants with lower leverage, the price of warrants will not change significantly when the positive shares change slightly, so you can have less concern when entering the market and will not be too easily shaken away.
What is defensive? In addition to the leverage factor, time value loss is also one of the considerations. Since the positive shares may not rise sharply immediately, they may need to be consolidated at a low level first, or rise slowly. After buying warrants, they may have to wait a little longer to have an ideal return. Choosing defensive warrants with a slight time value loss can avoid the fact that the warrants have suffered a large loss due to time value loss before the positive shares began to rise. For warrants with longer maturities, on the one hand, the daily time value loss will be mild, and on the other hand, it can also provide enough time to capture the changes that may occur in the short and medium term of the positive stock. Therefore, the long-term warrants can be regarded as a more robust option for bottom reading in the middle line.
Recently, the trading and investment of oil stock equity is very active. It is believed that after a large number of oil stocks have been adjusted, they have begun to attract funds into the market to copy the bottom. If investors also think that oil shares have low absorption value, they are planning to make medium and long term deployment when the stock price is weak. They can first take the above defensive warrants, that is, those with longer term and higher discount price, as the priority object. When the positive shares are confirmed to have bottomed out and recovered, they will consider switching to other more aggressive warrants.
