Chinese Warrants Market, The Creation Of The Cancellation Of Institutional Research

It has been making great improvement in financial market of China over the past two decades, especially in its capital market. At the same time, there are many unsolvable problems in Chinese financial market comparing to the developed financial market. With the entry into WTO, it is necessary for China to build up an open financial market with reasonable structure and various products, so as to deal with the opportunity and challenge. Further financial innovation is in need for Chinese financial market.In recent years, a number of different warrants of the put option had been insanely traded, and it had been almost infinitely created and wrote off. And to be affected the pricing of the warrant greatly. It has decreased sharply the financing efficiency of the capital market and declined the inspirited mechanism of the capital market and lessened the hedged function of the market's risk.To begin with, the problem of put option was brought by between the creating and writing-off In Chinese financial market. The paper will analyze firstly the mechanism of both creating and writing-off of warrant for the overseas financial market. Finally, by contrast with the mechanism of both creating and writing-off of the Chinese warrant, we will make policy suggestions.Besides, we analyze the effect of the interest of the investment bank and investor and stockholder in the Chinese financial market, and find that the current stockholder's value of the stock reforming has been declined and that the interest of the middling-small stockholder has been infracted seriously by the creating behavior of the investment bank. The mechanism of warrant's creating and write-off have not adapted to the developing need of the Chinese financial market.Moreover, by the Black-Scholes' model of option price-fixed, we calculated the theoretic value of the warrant of China Southern AIRLINES. By comparison with the real market's pricing, we find that the creating and write-off of warrant neither can restrain the pricing, nor solve the problem of the Chinese market's liquidity.In the end, we summarized the paper and indicated the disadvantages of the thesis.We simply discussed the relation of both created– write off and the theory of Warrant, we did not look for the function of many influencing factors. There are the important significance of both the theory and the real life to unveil the action of both investment and financing for everybody.