Payoff of Inline Warrants at expiry

At expiry, the investor will receive a pre-determined fixed payout, depending on the settlement price of the underlying asset vs. the Upper and Lower Strikes. Maximum upside and downside are known at the time of investment. When Inline Warrants are "In-The-Range" at expiry, the amount payable per Inline Warrant is HK$1. When Inline Warrants are "Out-Of-The-Range" at expiry, the amount payable per Inline Warrants is HK$0.25.

In addition, as the payout of Inline Warrants is capped at a fixed amount of HK$1 per Inline Warrant, Inline Warrants are usually traded at a price which is lower than the maximum payout of HK$1. Therefore, any trade on Inline Warrants executed above HK$1 will not be recognized and will be cancelled automatically by the Hong Kong Stock Exchange (HKEX). Due to the minimum fixed payment at expiry, Inline Warrants are expected to trade at or above HK$0.25.

The payout and maximum profit & loss at expiry are summarized in the table below:

*Transaction costs (such as broker fees) are not included. The underlying price or level may trade outside the Upper and Lower Strikes before expiry. In such case, the trading price of Inline Warrants will be affected but not the payoff at expiry.