If you have the warrant of 100 A shares, the exercise date is August 1. The exercise price is 5 yuan. That is to say, by August 1, you will be eligible to buy 100 shares at the price of 5 yuan/share.

If on this day, the market price of the stock is 8 yuan, and others buy 100 shares and spend 800 yuan, you can buy 100 shares with 500 yuan on this day. If you buy warrants at a price of 0.50 yuan per share, then you have spent 550 yuan, and you must get a good deal. If you really buy it, this behavior is called exercise.

But if on this day, the market price of the stock is 4 yuan, and you will definitely not buy it at the price of 5 yuan/share, then the 100 warrant in your hand is waste paper. You must have chosen to give up the right to exercise.

Put warrant

Put warrants are the opposite. They give you the right to sell shares at a certain price that day. For example, your warrant stipulates that you can sell 10 yuan/share on the same day. If the market price of the stock on that day is 7 yuan, and others sell 100 shares to get 700 yuan, and you sell 1000 shares to get 1000 yuan, you will certainly be happy. But if the market price of the stock on that day is 13 yuan per share, will you still sell only 10 yuan per share according to the rights given to you? Surely you can't be so stupid?

Therefore, when the exercise date is getting closer and closer, it is easy to estimate whether this warrant is waste paper or useful. Because if you don't have a warrant and want to buy a warrant, you have to spend money. You should consider whether you will buy a piece of waste paper.