Guide for Beginners

In the main board trading system of Hong Kong, whether it is for stocks or other listed products, the minimum price for trading is $0.01.

When a warrant becomes extremely out-of-the-money or extremely short term, the theoretical value of the warrant price may be lower than $0.01. However, the minimum price that can be displayed on the ticker or trading system is $0.01. In such situations, it is not that the warrant issuer did not want to provide quotes. The fact is that the warrant price is lower than $0.01, and quotes cannot be provided.

Because the minimum price that can be displayed on the ticker is $0.01, some investors may believe that if they buy a warrant priced at $0.01, they can at least sell their holdings at the price of $0.01 if they have made the wrong decision. But in fact that is not the case.

The fact is that the value of the warrant purchased by the investor at the bid price of $0.01 has dropped to below $0.01. If the warrant issuer still cannot provide quotes after accepting the market’s orders, and the order quantity is insufficient, the investor may lose all his principal.

Because the warrant issuer is obliged to provide quotes for warrants with a theoretical value of $0.01 or above, you should keep an eye on the orders of the warrant issuer and confirm the product’s spot price before you start trading, in order to avoid buying products which value is less than $0.01 at the price of $0.01.