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Today is the lasting trading day for both Wulangye put and call warrants, or “Z Wuliangye YGP” and “Z Wuliangye YGC”. The Shenzhen Stock Exchange hereby issued a notice, warning of the trading and holding risks concerned on the last trading day and requiring all member institutions to get fully prepared for the exercise of the call warrants.
According to the notice, all the exchange members are required to take practical measures to reinforce risk monitoring and supervision on the last trading day of Wuliangye put warrants, and remind investors of the related trading and holding risks by all means and via all the available channels. In addition, member institutions need to enhance real-time monitoring over trading of the put warrants, send timely reminders and alerts to customers, esp. those who have never dealt in warrant transactions, and strengthen regulation and management of customers’ trading activities in order to warn against and prevent any activities causing severe warrant price fluctuations.
The two types of Wuliangye warrants are scheduled to be exercised between Mar. 27 and Apr. 2. As a deep-in-the-money option, the call warrants might cause investors heavy losses if not exercised duly. As at Mar. 20, a total of 3.69 million units of Wuliangye call warrants have never been changed hands since listing, involving around 3600 accounts. The put warrants, as a deep-out-of-the-money option, also involve potential risks if mistakenly exercised and might incur unnecessary losses to investors.
The Shenzhen bourse also released a risk alert today on the last trading day for “Z Wuliangye YGP” warrants, reminding the investing public, esp. retail investors of potential trading risks, as the warrant holders will see its value drop to “zero” after market closing.
