Insight & Analysis

Press release: J.P. Morgan launches Hong Kong dollar pair foreign exchange warrants

Published: Nov 2023

20th November 2023J.P. Morgan today announced the launch of new Hong Kong dollar pair FX Warrants in the Hong Kong market, making it the first issuer in Asia to introduce FX Warrants with CNH/HKD (Chinese Renminbi traded outside Mainland China / Hong Kong dollar) and JPY/HKD (Japanese Yen / Hong Kong dollar) as underlying currencies pairs. The new FX Warrants will begin trading on the Hong Kong Stock Exchange on November 23, 2023.

Press release news paper

“The introduction of HKD pair FX Warrants in Hong Kong complements J.P. Morgan’s existing offering of a wide range of equity-linked warrants, providing investors with an alternative investment tool to diversify their portfolio. As FX Warrants are linked to currency movements, they typically have lower implied volatility, resulting in a more cost-effective buying option. Additionally, the FX Warrants also offer investors an efficient way to hedge their currency exposure,” said Yowjie Chien, global head of Warrants and Options Electronic Client Solutions at J.P. Morgan. “The launch of new HKD pair FX Warrants reinforces J.P. Morgan’s commitment as a leading issuer of derivative products in Hong Kong. We are continuously innovating to meet the evolving needs of investors in changing market conditions, and to expand their investment options.”

J.P. Morgan’s new FX Warrants linked to currency pairs with foreign currencies as the base currency and HKD as the quote currency, align with growing investor demand. This convention not only supports investors’ ability to analyze currency movements but also empowers them to capitalize on directional views. These FX Warrants also enable investors with overseas assets to easily manage foreign exchange risk and hedge against currency fluctuations.

J.P. Morgan also plans to issue five additional currency pairs in the coming months.

“FX Warrants as a hedging instrument on currency risk are flexible and they do not require any collateral or margin requirements. The downside risk is limited to the Warrants premium whereas the upside potential can be captured. This makes FX Warrants an attractive and convenient solution for investors looking to mitigate against currency fluctuations and optimize their global asset allocation,” said Cedric Cheung, head of Listed Structured Products Sales for Asia at J.P. Morgan.

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