Exploration Of Issues Of Chinese Warrants Market

In the beginning of the20th century,the warrant appeared in the USA.Along with thedevelopment of financial market,warrant transactions flourished increasingly.InAsia-Pacific area,the warrant has become a popular derivate financial instrument.The firstproper warrant once appeared in China was of subscription right,but the warrant marketclosed soon because of inordinate speculation and unsubstantial function.In Augues22,2005,Baogang warrant came into the market as a derivate of the capital market whicharms at resolving stock ownership distribution in Chinese stock market.Baogang warrantbecame the first warrant in our securities market after9years.This paper specifies thewarrant’s development around the world,discusses emphatically warrant’s application as ashare right incentive measure and consideration in the reformation about resolving stockownership distribution,analyzes the particularity of market environment in which Baogangwarrant was situated and stockjobber’s behavior under the warrant creation system,alsolooks into our current warrant market from intrinsic value,implied volatility,premium rateand turnover rate,comparision between call warrants and put warrants.In the end of thepaper,there are several advices about warrants market.