As a kind of derivative, the price of the warrant will ultimately depend on the value of the underlying stock at the expiry date and the expectations of investors, nothing else. What implied volatility, effective leverage ratio, and The amount of out-of-the-box goods is just an excuse for them to go and receive goods. Investors should not trust it to avoid being led by the nose!
To know the final value of each warrant, you can actually use a very simple formula to calculate: the final value of the warrant = intrinsic value = (settlement price-current positive stock market price) / conversion ratio. And the round price After subtracting the intrinsic value, it is all the time value.
If the terms of the exercise of different warrants are the same or similar, it is really expensive to compare them, and it should be compared with their intrinsic value and time value.
Based on past experience, such as the implied volatility proposed by some publishers to determine the price, retail investors are like a blind man touching the elephant when they are lucky, and it is difficult to know the whole truth; when the color is not good, it is more serious. It is said that in most cases, it is like a blind man catching a snake, and he is often deceived. Don’t you see that the spokespersons of certain publishers often use the volatility to move around the world, and use it to explain the world, the world, the world, the world, the world If you don't accept it, everyone can only be convinced...When you don't accept it, the speaker always has an excuse to use his unlimited creativity.
Don’t you see that when the market is good, when the warrant does not rise but falls, the issuer will say that the implied volatility falls, and when the implied volatility rises, it depends on the effective leverage ratio is low, and when the effective leverage ratio is high, it is said that the hedge ratio fell. When the hedging ratio drops to the point where it can no longer fall, and when there is too much stock and not too much stock, it is said that the speed of the decline of the leisure value is accelerated...It is really not all, it is simply superb. The high level of creativity is simply shocking, weeping!
All in all, it means "believers are saved." Even if they lose Yipu, retail investors often listen to the issuer's lobbying to change the warrant to a new listing. After receiving the goods willingly, they can review the above wonderful explanation to the issuer. In the past three to seven years, if you are not bankrupt or dead, you will see through the world as if you are not talented and understand the good intentions of certain issuers.
The author is definitely not saying that implied volatility is meaningless. In the option market, it is a great invention and a standard for option pricing; but in the warrant market, if the issuer can make the market based on its issuance and pricing, and In order to affect the implied volatility and price of individual warrants, it completely controls the market of individual warrants, and everyone uses such implied volatility as a pointer to evaluate the value of the warrant, although it is not lost or far away.
Of course, as many people of insight have said, retail investors who have lost money in the warrant market should not yell. In the past few years, I can only look at the basic concepts of implied volatility and other speculation in a normal mind. The issuer can make an "indisputable" interpretation of the current and expected implied volatility data. What use is it for retail investors to talk more? What can be done is to avoid buying warrants with extremely high implied volatility or other poor data. There are too many expectations for the warrants with low implied volatility and other excellent data. Over time, retail investors will realize that everything can be simplified, and it is important to choose the round with the most fundamental value, so as not to put the cart before the horse.
In fact, to compare all similar warrants in the market, retail investors only need to look at their intrinsic value and hourly value to know which one is worth buying. Such a simple method, the publisher never teaches you, It won’t be provided on its website. Why? The reason is very simple. For publishers, this is a more effective selection, giving them a variety of ethereal pointers to control wheel prices. After all, they are providing quotation and settlement. At this time, the publisher has to explain to everyone only the intrinsic value, and everything else can be moved at will.
The medium and long-term rounds recommended by some publishers are usually only beneficial to them. Therefore, some commentators believe that only the HSI round should be used for speculation (because the spread is usually small), and only medium and short-term warrants are considered. You may also refer to this opinion. (Yao Qian)
