How to invest in Forex Warrants?

After understanding the relationship between the appreciation and depreciation of a currency pair, the next step is to understand how to use warrants to capture investment opportunities.

A foreign exchange (FX) warrant’s underlying asset is a pair of currencies, such as "Japanese yen against Hong Kong dollar" and "Chinese Renminbi traded outside Chinese Mainland (Offshore Chinese Renminbi/CNH) against Hong Kong dollar". The warrant’s name is displayed using the abbreviation of the underlying asset.

For example, a "CNHHK Call warrants", that is, a CNH/HKD Call warrants implies confidence in the Offshore Chinese Renminbi increasing while expecting a decrease in the Hong Kong dollar.

If the value of the Offshore Chinese Renminbi rises from 1.07 to 1.1, against the Hong Kong dollar, it means you can convert 0.03 more Hong Kong dollars for 1 Offshore Chinese Renminbi. If the Offshore Chinese Renminbi appreciates against the Hong Kong dollar, the theoretical price of this call warrants will rise.

Call Warrants Put Warrants
Offshore Chinese Renminbi against Hong Kong Dollar CNHHK Call CNHHK Put
Japanese Yen(100) against Hong Kong Dollar YENHK Call YENHK Put
Pound against Hong Kong Dollar GBPHK Call GBPHK Put
Euro against Hong Kong Dollar EURHK Call EURHK Put
Australian Dollar against Hong Kong Dollar AUSHK Call AUSHK Put
New Zealand Dollar against Hong Kong Dollar NZDHK Call NZDHK Put
Canadian Dollar against Hong Kong Dollar CADHK Call CADHK Put

The above 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 above-mentioned listed structured products or financial instruments nor does it constitute a commitment by J.P. Morgan or its affiliates ("J.P. Morgan Group") to enter into any transaction. Past performance is not indicative of future results. There can be no assurance that future results or events will be consistent with any opinions, forecasts or estimates herein.
FX warrants (or currency warrants) are non-collateralised structured products. 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. J.P. Morgan does not act as a fiduciary for or an advisor to any investor and is not responsible for determining the legality and suitability of an investment in any products or financial instruments by any prospective purchaser or existing holders. Investors must make their own risk assessment and where necessary, seek professional advises. Investor should not invest in these structured products unless they carefully read and understand the terms and conditions, risk factors and other information as set out in the relevant listing documents, and fully understand the features of the structured products and are willing to assume the risks associated with them.