TY - JOUR T1 - The Derivative Warrant Market in Hong Kong JF - The Journal of Derivatives SP - 72 LP - 84 DO - 10.3905/jod.2001.319164 VL - 8 IS - 4 AU - Paul Draper AU - Billy S.C. Mak AU - Gordon Y.N. Tang Y1 - 2001/05/31 UR - https://pm-research.com/content/8/4/72.abstract N2 - “The impact of option introduction on the market for the underlying stock has been studied at length in the U.S. In Hong Kong, trading in standard option contracts was preceded by trading in equity warrants issued by third parties, typically banks. These securities differ from exchange-traded options, and also from warrants issued by the underlying firms themselves. For example, unlike exchange-traded options, there is a large and fixed supply of the warrants in the market from day 1, but unlike warrants issued by the underlying firms, the issuing bank may need to purchase shares in the open market to fulfill its obligations should the contracts be exercised. Draper, Mak, and Tang describe the particular features of the Hong Kong derivative warrant market, and examine the impact on the price, volatility, and trading volume of the underlying shares when new warrants are introduced and when outstanding warrant issues expire. Several interesting differences emerge from what has been found for option introduction in the U.S.” ER -