After the warrant enters the transaction, investors can use the implied volatility to guide their investment. There are three main methods of use: 1. Buying and selling volatility. In addition to using the expected direction of change in the underlying stock price to buy and sell warrants, investors in warrants can also profit from changes in the fluctuation range of the stock price. Generally speaking, volatility does not rise or fall indefinitely, but fluctuates back and forth within a range. Investors can profit by buying warrants when implied volatility is low and selling warrants when it is high. 2. Compare with historical volatility to determine the timing of buying and selling. If investors have decided on the buying and selling direction, they can compare the historical volatility with the implied volatility, and buy (sell) warrants when the implied volatility is lower (higher) than the historical volatility. 3. In addition, investors can also compare warrants with different remaining times of the same underlying asset through implied volatility. The smaller the implied volatility, the cheaper the warrant, which can provide guidance for selecting the type of warrant.

The factors that affect the magnitude of implied volatility include: the historical volatility of the underlying stock; the supply and demand relationship of warrants. Generally speaking, the implied volatility of the underlying stock of warrants is generally higher than the historical volatility, and the two have a positive correlation. If the historical volatility of the underlying stock is high, the implied volatility of the related warrants is also relatively high; if the historical volatility of the underlying stock is low, the implied volatility of the related warrants is also relatively low. Especially when issuing warrants, the issuer will use the historical volatility of the underlying stock as one of the basis to determine the implied volatility of the warrant and thereby determine the warrant price. In addition, the supply and demand relationship will also affect the implied volatility, which to some extent is a reflection of the supply and demand relationship of warrants. When investors have strong demand for a certain warrant, the price of the warrant is artificially high, and the implied volatility reaches a high level, even much higher than the actual volatility of the underlying stock.