What is the connection between a turbo CBBC and the underlying stock?

Warrants"It is an extremely high-risk investment product in the Hong Kong ** market, which is what we call a warrant, which is actually English"warrants"transliteration of .

Warrants"The name of the profession should be:"Warrants"Warrants also include warrants, which are a type of option in themselves.

CBBCs are a popular investment tool that has emerged in recent years, and similar to warrants, they also have the same criteria as the strike price, expiration date, conversion ratio, etc.

CBBC is similar to futures trading, and the finance costs of CBBC are comparable to the cost of borrowing money** from the issuer to sell the underlying asset and gain leverage.

Bull contracts are bullish, bear contracts are bearish; It is similar to call warrants are bullish and put warrants are bearish.

CBBCs and CBBCs have a mandatory call mechanism for CBBCs respectively, and CBBCs will be called when the underlying asset** reaches the call price of the CBBC.

Investors do not need to make a margin call, and the loss is capped up to the initial investment in the CBBC.

In the early days of the launch of CBBCs, many investors failed to distinguish between stock warrants and CBBCs, and from time to time CBBCs were called, they learned that it was not the warrants but the CBBCs.

1) CBBCs are leveraged products that trade in the direction of the underlying stock, and the ** change ratio with the underlying asset is one to one, that is, the delta value is equal to one. Unlike warrants, CBBC** is generally not affected by implied volatility and time value loss, and the dispute over pricing is less severe than that of warrants.

2) CBBC has a call price, while warrants do not have a call price, only time cost. With the underlying stock price unchanged, the longer you hold the warrant, the lower the warrant will be. CBBCs are accompanied by a mandatory ** mechanism, and each CBBC has a ** price.

If the underlying asset reaches the ** price before expiry, the CBBC will cease trading and be called immediately, and the issuer will return the residual value to investors.

3) Underlying stock**, bull contract**; Underlying Stocks**, Bull Contracts**; Underlying Stocks**, Bear Contracts**; Underlying Stocks**, Bear Contracts**;

4) When the underlying stock hits the price of the CBBC before expiration, the issuer must immediately withdraw and terminate the trading of the CBBC, which means that the CBBC will suddenly become waste paper.

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CBBCs and warrants actually have many similarities, such as issuers, pricing mechanisms, trading platforms, etc., and more importantly, neither is a long-term investment product.

CBBCs are relatively unaffected by the time value, but the relevant consideration is taken into account.

Since the CBBC does not have implied volatility, the fluctuation of the underlying stock will not have much impact on the CBBC**, the underlying stock will rise in a straight line, but the warrant will rise in a straight line, that is, it can rise more sharply than the underlying stock, and on the contrary, it will fall more sharply than the underlying stock.

The bid-ask spread of CBBCs is generally wider than that of warrants, so it is not very attractive to those who like to speculate on the same day, but for those medium- and long-term investors who are accustomed to holding warrants for a period of time, CBBCs will be a more suitable choice.

Details can be found at Golden Equator Investment Company in Hong Kong.

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