Ping An Securities Derivatives Department
Warrants have a leverage effect. When the price of stocks rises or falls, the rise and fall of warrants will usually be amplified. Therefore, the investment risk of warrants is greater than that of regular stocks. If the full position operation is conducted, once the wrong direction is judged, it is likely to cause great losses. Therefore, when investing in warrants, it is necessary to allocate funds reasonably. How should we allocate them?
Specifically, there are three factors that determine the allocation of warrant funds. First, investors' own risk tolerance. Generally, compared with stock investors, warrant investors are risk preference type, and have greater risk tolerance. Even so, different warrant investors have different risk tolerance. Before investing in corresponding warrants, investors must be clear about their tolerance for risks. If investors think that they prefer risk and can bear large losses, the position of investment warrants can be slightly heavier.
Second, the judgment of the future trend of positive shares. Taking the subscription certificate as an example, if it is believed that the positive shares are very likely to strengthen in the future, investors can take a heavier position. If the positive shares rise, investors can obtain higher returns. If investors are not too sure about the future trend of the positive shares, but do not want to give up the chance of making profits, then the position should not be too heavy. Even if the judgment is wrong, the loss will not be too serious.
Third, the effective leverage ratio of warrants. In warrant investment, the leverage effect of warrants is very important to control the size of positions. The effective leverage ratio measures the sensitivity of the warrant price to the change of the positive share price. It represents the theoretical percentage of the change of the warrant price for every 1% change of the positive share price. For example, the current effective leverage level of Sinopec CWB1 is around 1.9, which means being a positive stock SINOPEC (China Petrochemical Corporation For every 1% increase, petrochemical CWB1 should rise 1.9% theoretically. It can be seen that the greater the effective leverage of warrants, the greater the risk investors have to bear.
Therefore, investors must combine the effective leverage level of warrants when selecting appropriate positions, otherwise it is easy to cause over investment. Generally, the position control of warrants should be determined according to their effective leverage ratio and the number of positive shares investors want to invest. For example, if the effective leverage ratio of warrants is 5 and investors want to invest in 1 million positive shares, they can invest 200000 yuan in warrants to achieve the goal of investing 1 million positive shares.
In a word, the distribution of warrant investment funds not only needs to consider its own factors, such as the size of risk tolerance, but also needs to consider various factors related to positive shares, such as the judgment of the future trend of positive shares, and more importantly, it needs to have a deep understanding of some characteristics of warrants themselves, especially the level of effective leverage, and make a comprehensive judgment on how to allocate funds to invest in warrants.
