What risks do I need to consider when investing in warrants or bull/bear contracts?-FTFT International Securities and Futures Official Website - Hong Kong Stock Account Opening

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What risks do I need to consider when investing in warrants or bull/bear contracts?

Structured products are not suitable for all investors. Wolun and bull/bear contracts involve high risks, and you should be aware of these risks before investing. Among them, the two main risks are:

♦ Leverage risk

Usually, the price fluctuations of warrants or bull/bear contracts far exceed those of their related assets. Its potential returns may be higher than those of the related assets, but in the worst case, its value may even drop to zero.

♦ time decay

If other factors remain constant, the time value of the portfolio or the cost of funding for the bull/bear contract will decrease over time until it reaches zero at the maturity date. Therefore, general warrants or bull/bear contracts should be considered as relatively short-term investment products.
For bull and bear contracts, you also need to pay special attention to the risk of mandatory buyback events. In addition, you can learn more about the relevant risks through the risk factors section in the listing documents of warrants or bull/bear contracts.

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