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A few days ago, Shenzhen Stock Exchange issued the Guidelines for Warrant Investors to Market, giving detailed answers on how to make profits through warrants.
Two functions of warrants
● The function of obtaining excess profits
For example, the investor Mr. Li invests in 1000 shares of Company A, and Mr. Wang invests in 10000 warrants of Company A, with the exercise price of 18 yuan. Assuming that two people enter the market at the same time, the stock price of Company A is 15 yuan at the time of entering the market, and the stock price of Company A rises to 20 yuan at the expiration of the warrant, then the profits of Mr. Li and Mr. Wang are 5000 yuan and 13400 yuan respectively, and the return on investment is 33.33% and 203.03% respectively. Obviously, the return rate of investment warrants is higher. Of course, if Mr. Wang's judgment is wrong, his investment loss is also far greater than Mr. Li's.
● Risk avoidance function
If an investor already holds the shares of Company A, he can purchase warrants for hedging. If an investor estimates that the shares of Company A will rise, but is worried that it may not conform to expectations, he can spend a small amount of premium to buy the put warrants of Company A. Once the shares do not fall, the gains from the warrants can be used to compensate for the losses of Company A. If the prediction is correct, the stock price will rise, and the stock purchased will have made a profit, but only a small amount of premium will be lost.
Notice on Warrant Entry
An investor shall use the A-share securities account to declare the subscription, trading and exercise of warrants. If an investor has opened an A-share securities account, he/she does not need to re open it, but can use the existing A-share account for warrant trading.
● The abbreviation of Shenzhen Stock Exchange warrant is six
For example, XYBbKs, where XY is the abbreviation of the underlying stock in two Chinese characters; Bb is the issuer code; K is the warrant type; S is the issuance batch of warrants issued by the same issuer to the same underlying securities, and the value is 0~9, or A~Z, or a~z.
The warrant code is a six digit number beginning with "03". The code range of the call warrant is [030000032999], and the code range of the put warrant is [038000039999]. There are 3000 codes of the call warrant and 2000 codes of the put warrant.
● T+0 transaction of warrants
The minimum reporting unit is 0.001 yuan, and the increase or decrease is 1.25 times of the amount of the underlying securities. For example, the closing price of company A's warrant on a certain day is 4 yuan, and the closing price of company A's stock is 16 yuan. The shares of Company A can rise or fall by up to 10%, or 1.6 yuan, the next day; The warrant can rise or fall by 1.6 × 125%=2 yuan the next day, which can be converted into a rise/fall ratio of up to 50%.
● Exercise method
The exercise of investors can be carried out through the declaration of exercise instructions by the Exchange, and the exercise instructions are effective on the same day and can be revoked on the same day; Warrants purchased on the same day can be exercised on the same day; However, the underlying securities obtained from the exercise on the same day may not be sold on the same day, but may be sold on the next trading day.
● Charging standards for warrant trading
The charging standard shall refer to the standard of the fund. The trading commission of the provisional warrants of Shenzhen Stock Exchange shall not exceed 0.3% of the trading amount. The registration and clearing company shall not charge the transfer fee of the warrant trading. The exercise fee is 0.05% of the par value of the transferred securities, and the non trading transfer fee is 10 yuan per transaction. Our reporter Mao Jinnan reports
Sina statement: The content of this article is purely the author's personal view, only for investors' reference, and does not constitute investment advice. Investors operate accordingly at their own risk.
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