Covered Warrants Operation: An Empirical Study In Hong Kong And The Mainland Program Design

Covered Warrant is a kind of special call option. Its characteristics include plain infrastructure,easy operation,mature theory,etc. At present covered warrant has been applied widely by many countries as a financial derivative tool. In a effective marcket price is a synthetical result of many factors,so this paper focuses on price to research the operation of covered warrant in Hongkong and to find the best model for Hongkong. By analyzing the development,operation,management,pricing model in Hongkong,this paper designs and adjusts details of operation for covered warrant in mainland. Finally this paper offers a solution using covered warrant to implement the circulation of non-circulation share and demostrates the method to calculate parameters via two samples.The conclusions of this paper are listed as follows:The operation of covered warrant in Hongkong is successful generally. Historical volatility Black-Scholes model with price factor is a better pricing model.Covered warrant is a good tool for junior derivative securities business such as mainland security marcket. By adjusting parameters,covered warrant can be a effective tool to implement the circulation of non-circulation share.