Li Jin, Director of Faxing Securities (Hong Kong) Co., Ltd
Hong Kong stocks have stabilized after the 26000 point mark recently, and the trend has not turned worse. For the time being, it is still a volatile market pattern. Initially, the strength of the market recovery is not strong, and there is an opportunity to hover at the low level to consolidate, but it is still impossible to rule out the possibility of bottoming and then falling. Therefore, at the current level, the market will rebound, and the short-term potential increase of the positive shares may not be high. The call warrants will be more stable if they are mainly short-term. Otherwise, when the positive shares fluctuate, the warrants they hold will consume time value every day. If the positive shares only fluctuate in a narrow range, there will be more opportunities to cause the extended range to fall, and the warrant price may be easy to fall but difficult to rise during this period.
The atmosphere of the market is not active, so it is advisable to close when the rally is good, especially for warrants. You should try to shorten the holding time, or even just buy and sell on the same day, to reduce the risk of changes in the extension amplitude. Before entering the market, we should also measure the value of the Bo rate and strictly guard the stop loss position to avoid being penny wise and pound foolish.
In terms of warrants selection, at this stage, it should be noted that warrants with a large amount of street goods (market holdings) may encounter a large selling pressure when the positive stock rebounds, so they are not the ideal choice for a broad rebound. In addition, warrants out of price should only be bought and sold on a short-term basis, because the time value of out of price warrants has a large loss, and they are also more affected by the downward adjustment of the extension amplitude. Under the limited potential increase of regular stocks, holding out of price warrants overnight may not be worth the loss.
The author found that more than half of the PetroChina warrants that had capital inflows recently were those that bought out of 10 cents, and some of the exercise prices were as high as HK $20, which seemed not suitable for the current market situation. Especially recently, the extension of PetroChina warrants began to decline again, and the out of price securities were most affected. If the positive stock only rebounds slightly rather than rises sharply, the impact of the downward adjustment of the extension amplitude is enough to offset the rise of the positive stock, and the warrants may fail to follow the positive stock rebound or even fall instead of rising.
