I heard that Guotai Junan can make warrants, and I want to ask what are the risks of warrants?

Hello! In response to your questions, we have made the following detailed answers for you:

**Risk of large fluctuations: One of the biggest characteristics of warrants is that they are time-sensitive, and after the expiration date, the investor loses the right to perform. As a result, the value of the warrant decreases as the expiration date approaches.

It is precisely because of the timeliness of warrants that it also brings uncertainty in their value. The value of warrants is in a highly volatile state relative to other valuable**. Due to the highly leveraged nature of warrants, warrants are also much more volatile than the underlying stock.

Once the investor makes a mistake, the investment loss rate is several times higher than that of investing in the underlying stock. In addition, if the issuer of the underlying asset is in poor financial condition, when the underlying asset fluctuates violently, the warrant may not be exercised and the warrant holder will lose all his capital.

I hope that our Guotai Junan ** Shanghai Branch can satisfy you!

Personnel: Guotai Junan**Account Manager Manager Yang (employee number 008407) Guotai Junan**——Know that the enterprise platform is willing to serve you!

What do you think the potential looks like? Looks good 20

The answer is Ken Woopiding, investors must conduct capital verification and understand the risks before starting to trade options. The purpose of capital verification is to ensure that investors have sufficient funds to cover their trading risks. Guotai Junan has also adopted a strict capital verification mechanism for this, including capital verification quota, settlement funds, positions, etc.

Guotai Junan also provides some details that investors can refer to:

1.For a single transaction of option contracts, the transaction amount shall not be less than 50,000 yuan;

2.Capital verification amount: The opening principal of the option shall not be less than 10% of the ** price(missing)

4.For option maintenance margin, investors must provide a certain amount of cash margin in accordance with the standards stipulated by Guotai Junan Company and in accordance with the ** proportion of the option contract.

Therefore, before investors trade options, they must understand their own funds, clarify their investment strategies, and grasp the transaction risks to avoid losses to investors' property.

The high financial leverage of warrants and the function of hedging tools are the charm of the warrants, which can enable investors to make a small profit. High financial leverage: The attractive thing about warrants is that they have limited losses and unlimited profits, and the reason for this is that they have high financial leverage.

When purchasing warrants, it is often only necessary to pay a lower premium to control the underlying stock subscription rights that are several times higher than the premium. Taking a call warrant as an example, if the investor correctly judges the future trend of the underlying stock, the return on investment of the warrant will often be much higher than the return on investment of the underlying stock. When the market outlook** of the underlying stock is contrary to the investor's expectation, the investor may choose not to exercise the warrant.

At this time, his maximum loss is only the premium paid at the time of ** warrants, which is not too high, which is much smaller than the loss of direct investment in the underlying stock. In addition, in addition to exercising warrants to earn profits, investors can also choose to transfer warrants in the secondary market to arbitrage. At this time, in the case of call warrants, if the positive price is reached, the secondary market of the warrants will also soar accordingly, so investors can transfer the warrants in the secondary market to earn the price difference; On the contrary, in the event of a positive price, the investor can still transfer the warrants in the secondary market, and at this time, only bear the loss of the price difference between the issue price of the warrants and the current price in the secondary market, and the maximum loss will still be only the premium paid by the investor.

Risk hedging tool: Since warrants can be both long and short when bearish, warrants can become an effective hedging tool for investors who have or will hold spot and ****. For example, when investors are bearish on the trend of the underlying stock and want to short, but they are worried about making a mistake.

To be on the safe side, he can buy a call warrant with a small cost of capital while **shorting**. At this time, if ****, it will be profited by ** and give up exercising the warrant (although it also loses a premium, but after all, the amount is small); If ** rises, he can make a profit by transferring or exercising the warrants to make up for the loss of **. And vice versa:

When you are bullish on the underlying stock and you are worried about a mistake in judgment, you can buy a bearish put warrant.

Hello, Guotai Junan ** Jiangxi Branch is happy to answer for you!

When investing in warrants, it is important to pay attention to the following key risk factors:

1) **Sharp fluctuation risk: Warrants are highly leveraged investment instruments, and small changes in the market price of the underlying ** may cause violent fluctuations in warrants**.

2) Misjudgment risk: Warrants are affected by many factors such as the trend of the underlying market, exercise, maturity time, interest rate, equity distribution and supply and demand in the warrant market, and the misjudgment of the warrant holder on these factors may also lead to investment losses.

3) Timeliness risk: Warrants have a certain duration unlike **, and their time value will decrease rapidly as the expiration date approaches.

4) Performance risk: If the issuer incurs financial risks, investors may face the risk that the issuer will not be able to perform the contract.