How to literally understand in the money warrants out of the money warrants. Why is it called that

In-the-money means that there is value, and out-of-the-money means that the value is negative and worthless.

Theoretical value of call warrant = (underlying stock** strike price) conversion ratio.

The theoretical value of the put warrant = (strike price underlying stock**) conversion ratio, as can be seen from the above two formulas:

For call warrants, when the underlying stock ** is higher than the exercise**, the subtraction result is greater than 0, and the theoretical value is also greater than zero, then it is called an in-the-money warrant;

When the subtraction result is less than 0, the theoretical value is also less than zero, which is called an out-of-the-money warrant.

The same goes for put warrants.

Hello, in-the-money warrants refer to call warrants in which the sum of the warrant exercise fee and the exercise fee is lower than the underlying settlement when the warrant holder exercises the warrant; or a put warrant where the sum of the exercise fee and the underlying settlement is lower than the exercise of the warrant. Otherwise, it is called out-of-the-money warrants (most of the warrants currently traded in our market are out-of-the-money warrants).

There is no question of whether there is net worth on the surface.

Youyou Mathematics School Tips: Interest is the teacher of learning, 80% of students have poor grades, it is a lack of interest in learning, and 99% of the reason for lack of interest in learning is the lack of a good teacher, from today onwards, don't blame the child for not being careful, because of poor grades, the child is the most painful. lichao

It is the question of whether there is net worth on the surface.

Hello insight, the in-the-money warrant refers to the call warrant when the warrant is exercised by the Luzhou people, and the sum of the warrant exercise fee is lower than the underlying settlement **; or a put warrant where the sum of the exercise fee and the underlying settlement is lower than the exercise of the warrant. Otherwise, it is called out-of-the-money warrants (most of the warrants currently traded in our market are off-the-money warrants). Now the sum of the underlying stock and the warrant** is at parity.

Refer to the strike price and the proportion of the line and segment. If the sum of the underlying stock and the warrant** is equal to the current hold, it is at parity. Discounted is in-the-money...

The premium is out-of-the-money. For example, the underlying stock is now $10.

Exercise **8 yuan. The warrant price is 2 yuan. Scale 1:

1.。It's a cheap match. The warrant is higher than $2 premium.

Less than $2 discount.

According to the relationship between the exercise price of the warrant and the positive market, the warrants can be divided into three categories: in-the-money warrants, out-of-the-money warrants and at-the-money warrants.

For call warrants: if the market of the underlying stock is higher than the exercise of the warrant, it is an in-the-money warrant;

If the market of the underlying stock is lower than the exercise of the warrant, it is an out-of-the-money warrant.

The opposite is true for put warrants: if the market** of the underlying stock is higher than the strike price of the warrant, it is an out-of-the-money warrant;

If the market price of the underlying stock is lower than the strike price of the warrant, it is an in-the-money warrant.

Regardless of whether it is a call warrant or a put warrant, if the positive price is just equal to the exercise price of the warrant, it is an at-the-money warrant.

Since the underlying stock** is always volatile, strict at-the-money warrants are rare. Usually warrants are always either in-the-money or out-of-the-money.

The intrinsic value is the difference between the underlying ** and the exercise price, that is, the value of the immediate exercise of the right.

Intrinsic value of call warrants = max [underlying stock price - strike price, 0] Intrinsic value of put warrants = max [strike price - underlying stock price, 0] In-the-money warrants have a certain intrinsic value, while out-of-the-money warrants have zero intrinsic value. In general, in-the-money warrants are more likely to have exercisable value at expiration, while out-of-the-money warrants are likely to expire at zero. Especially for some deeply out-of-the-money warrants, the possibility of zeroing out at maturity is very high, so the risk is extremely high.

On the other hand, call warrants that are deeply in-the-money are much less risky. Out-of-the-money warrants are riskier than in-the-money warrants, and prudent investors should choose in-the-money warrants or some slightly out-of-the-money warrants for deployment. When looking at the direction of the market, out-of-the-money warrants are usually more likely to magnify returns than in-the-money warrants.

Investors with risk appetite can choose some out-of-the-money warrants for short-term deployment if they have a clear directional judgment on the market outlook, but investors should try to avoid some deep out-of-the-money warrants, especially those that are about to expire.

The in-the-money early verification warrant refers to the call warrant in which the sum of the warrant exercise fee and the exercise fee is lower than the underlying settlement when the warrant holder exercises the warrant; or the sum of the exercise fee and the underlying settlement gap ** is lower than the put warrant exercise**.