Certificate, the English name is warranty, commonly known as "turbo" in Hong Kong. The substantiation of warrants reflects a contractual relationship between the issuer and the holder. After the holder pays a certain amount of price to the warrant issuer, he obtains a right from the issuer. This right allows the holder to purchase/sell a certain amount of assets to the warrant issuer at an agreed price on a specific date or within a specific period in the future. The holder obtains a right rather than a responsibility. It has the right to decide whether to fulfill the contract, while the issuer only has the obligation to perform. Therefore, in order to obtain this right, investors need to pay a certain price (premium). The difference between warrants (actually all options) and forwards or futures is that what the holder of the former obtains is not a responsibility, but a right. The holder of the latter is responsible for executing the purchase and sale contract signed by both parties, that is, he must Trade the specified underlying asset at a specified price and at a specified future time. Classification of warrants: Warrants include warrants, rights warrants, covered warrants and convertible debentures. Warrants are divided into two types: subscription and put. In layman's terms, subscription warrants are similar to bicycle tickets and TV tickets in the early days of reform and opening up. With the tickets, you can purchase corresponding commodities with cash. If goods are in short supply and prices continue to rise, tickets will also skyrocket. On the contrary, if the supply of goods is abundant and prices continue to fall, tickets are like waste paper. As for put warrants, which are tickets for sale, they are more difficult for ordinary people to access in real life, but the principle is similar. Therefore, the investment value of warrants is entirely based on the expectation of the corresponding stock price trend. If the stock is bullish, the call warrant will rise and the put warrant will fall. If the stock is bearish, the call warrant will fall and the put warrant will rise. However, the volatility of warrants is relatively strong, with the characteristics of small and large, and the speculative nature is between stocks and futures. The first issuance of warrants in my country's securities market was in June 1992. There was a sharp rise and fall, and finally warrant trading was suspended in June 1996. At present, warrants have returned to the securities market as a form of consideration for share reform. As a scarce species, in accordance with the practice of "speculating on new stocks", they were enthusiastically sought after by the market in the second half of last year. According to the relevant regulations of the exchange, the underlying stocks for which listing warrants are issued should meet the following conditions: the market value of the circulating shares in the last 20 trading days is not less than 3 billion yuan; the cumulative turnover rate of stock transactions in the last 60 trading days is above 25%; The share capital shall not be less than 300 million shares. The threshold for listed companies to issue warrants is relatively high, so warrants will still maintain the characteristics of small varieties and are often subject to hot money. At present, the nine warrants listed on my country's securities market are all warrants. Five are in the Shanghai stock market and four are in the Shenzhen stock market. Six put warrants and three call warrants. According to the Hong Kong Securities and Futures Commission’s research report on “The Proportion of Derivative Warrants that are In-the-Money and Out-of-the-Money at Expiration”, 55.4% of warrants turned into waste paper on the expiration date. Judging from this, it is estimated that half of the warrants in the mainland stock market will be exercised on the expiration date, and the market price of half will tend to zero, which will become waste paper. The historical mission of Half Warrants is to provide a speculative variety. According to the direction of exercise of rights, warrants can be divided into call warrants and put warrants. Call warrants are "call options" among options, and put warrants are "put options". Let’s take a case of subscription warrants (see Table 1). The investor's purchase of 10,000 shares of this warrant means that by paying 360 yuan, he can buy 10,000 shares of SSE 50ETF at a price of 0.78 yuan on any trading day between June 16 and September 16. Because of this warrant It is settled in cash, so investors are not required to spend money to purchase the ETF when the option is exercised. Instead, the price difference is settled based on the price of the ETF at the time of exercise and the exercise price. Generally speaking, when the SSE 50 ETF is lower than 0.78 yuan, investors will not propose to exercise their rights; only when the SSE 50 ETF is higher than 0.78 yuan, investors will propose to exercise their rights.