In a first for the Hong Kong warrants market, J.P. Morgan has issued derivative warrants linked to the Standard and Poor’s 500 Index (S&P 500), one of the major benchmarks of the U.S. stock market. The new derivative warrants will begin trading on the Hong Kong Exchange on September 2, offering investors broader investment opportunities to gain exposure to the U.S. market during local trading hours.
“Volatility has risen significantly since the beginning of the year and investors are always looking for opportunities to diversify their portfolios. The debut of the S&P 500 warrants, together with the Nasdaq warrants we just launched last week, provide local eligible investors another alternative to gain exposure to the volatility in the world’s largest stock market,” said Cedric Cheung, Head of Listed Structured Products Sales for Asia at J.P. Morgan.
The newly-issued warrants will be linked to the movements of E-mini S&P 500 Futures, covering the full trading hours of the Hong Kong market.
“As the leading issuer of derivatives warrants in Hong Kong, we are committed to providing investors with wider variety of instruments for different market conditions and risk appetites,” said Cheung.
J.P. Morgan is the No. 1* player in cumulative sales of warrants for seven consecutive years in Hong Kong. The firm expects to introduce at least 15 U.S. indices-linked warrants on the Hong Kong Exchange this year.
For more information, please visit www.jpmhkwarrants.com.
* Calculation is based on the net sold notional amount by each issuer over the period of 2013-2019. Source: Bloomberg and HKEX
Net sold notional amount = (No. of warrants net sold or net bought / divisor) x underlying closing price x FX (if applicable)
Structured Products are non-collateralised products. If the Issuer and its guarantor are insolvent or default, investors may not recover part or all of the amount due. This information provided by J.P. Morgan Securities (Asia Pacific) Limited (“J.P. Morgan”) is for information and discussion purposes only and is not intended as an offer, invitation, inducement, advice, recommendation or solicitation for the purchase or sale of any financial instrument nor does it constitute a commitment by J.P. Morgan or its affiliates to enter into any transaction. Past performance is not indicative of future results. The price of the structured products may fall in value as rapidly as it may rise and investors may sustain a total loss of their principal invested. Callable bull/bear contracts have a mandatory call feature and may be terminated early, in such case, (i) an investor of category N callable bull/bear contracts will not receive any cash payment; (ii) the residual value for category R callable bull/bear contracts may be zero. Inline warrants have been newly introduced to the market since July 2019 and no similar products are listed on the Stock Exchange for comparison. Investors must make their own risk assessment and where necessary, seek professional advice. Investor should not invest in these structured products unless they have carefully read and understand the terms and conditions, risk factors and other information as set out in the listing documents, and fully understand and are willing to assume the risks associated with them. It is not possible to predict the liquidity in the secondary market for the Structured Products. J.P. Morgan Broking (Hong Kong) Limited is a dealer and liquidity provider for warrants, inline warrants, CBBCs and/or traded options; and may be the only liquidity provider for the Structured Products.