Warrant parameters

Historical volatility, refers to the quantitative figure of asset volatility over a period of time. If the current price of an underlying stock is 100 yuan, the annual historical volatility is 10%, means the underlying stock is between 80 and 120 yuan (100±2×10%) during 95% of the time.　　

Implied volatility, refers to the expectation of volatility in a period of time in the future. The greater it is, the greater the possibilities. As we said earlier, warrants with high volatility are also priced higher. Therefore, changes in the implied volatility have a very large short-term impact on the warrant. When the implied volatility rises, the price of the warrant also rises sharply, and when the implied volatility decreases, the price of the warrant also falls faster. For example, when the underlying stocks consolidate for a long period of time and suddenly change to a rapid rise, then the implied volatility of the warrant will suddenly rise from a low level to a high level. At this time, the warrant price is not only driven by the rise in the underlying price and because of the higher implied volatility, there will be a double "benefit".　　

There are still some opportunities to earn money. For example, the "9.11" incident and the SARS incident caused a sharp drop in the stock price in the short term, the warrant has a deep drop. When the stock price reverses, the warrant rises often bringing dozens of times, hundreds of times the return. Of course, such opportunities are rare, and risks are great. However, one approach is to buy the corresponding warrant when the main stocks that are optimistic in the medium and long term pull back. The warrent has fallen deeply that it can easily double in the short term when the underlying stock has rebounded. In any case, risk control is still the top priority. It doesn't hurt to take a small amount of money to try your own vision or luck. Too much money is too risky.　　

Market holdings (also called Outstanding Quantity) refers to the cumulative number of warrents held by the market after the market closes. This is different from stocks that generally remain unchanged. After the issuance of stocks, the number of shares circulating in the market is determined, and only when a placement or repurchase occurs, the circulating share capital will change. The market holdings of warrants can change every day. An investor buys a warrant from the market today. It may be bought from other investors, or it may be bought from the dealer, and the same is true when selling it. This is some what similar to the "open interest" of futures.　　

Generally speaking, if the transaction volume is high and the cumulative market holdings have not increased, it may indicate that investors do not have much confidence in the market outlook. If the trading volume continues to enlarge and the holdings increase, it means that investors have long-term confidence in the market outlook and continue to buy goods from the issuer. When judging the warrant market, the holding volume index has a greater reference value.