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Leapmotor vs. Li Auto: Both surged nearly 10% in a single day—which one offers more deployable warrant terms?

Today, new energy vehicle stocks showed clear strength, with Leapmotor $LEAPMOTOR (09863.HK)$ and Li Auto $LI AUTO-W (02015.HK)$ both rose by nearly 10%:

Both stocks are strong performers, but the difficulty of warrant deployment actually differs significantly.

First, consider price action: Leapmotor is stronger, yet closer to resistance.

Leapmotor’s upside probability score reached 94.5 points, the highest among all screened stocks. Its 5-day gain reached 26.06%, its short-term momentum is clearly stronger than that of Li Auto.

However, Leapmotor closed at HK$42.18, with its first resistance at HK$42.30—almost overlapping. This means that after today's sharp rally, it has already reached a key short-term level.

Li Auto closed at HK$54.60, with its first resistance at HK$55.60, still about 1.8% away; its first support is at HK$47.32, approximately 13.3% below the current price.

Comparing the two:

– Leapmotor’s upward move is sharper, requiring a higher breakout threshold;

– Li Auto’s uptrend is slightly more moderate, but its technical room is relatively clearer.

Looking further at product availability: Leapmotor only has call warrants, while Li Auto offers a more complete set of two-way instruments.

In the product overview:

– Leapmotor only has 3 call warrants

– Li Auto has 8 representative products, including call warrants, put warrants, bull certificates, and bear certificates

This has already directly affected trading strategies.

At this stage, Leapmotor can essentially only express bullish views via call warrants; there is a lack of equally comprehensive options for implementing pullback protection, bearish positions, or using bull/bear certificates.

Li Auto, on the other hand, allows switching between instruments based on different market conditions—whether betting on breakouts, retracements, or using knock-out products—with more terms available for comparison.

Leapmotor call warrants: 32.5% to 58.2% out-of-the-money; terms are not cheap

The exercise prices of the three Leapmotor call warrants are approximately:

– HK$55.88, out-of-the-money 32.5%

– HK$56.99, out-of-the-money 35.1%

– HK$66.716, out-of-the-money 58.2%

Implied volatility is approximately 73.91% to 77.99%, at a relatively high level.

Among these, the nearer strike price product at HK$55.88:

– Effective leverage of approximately 2.8 times

– Delta of approximately 46.79%

– Premium around 48.96%

Product with a strike price of HK$56.99:

– Effective leverage of approximately 4.8x

– Delta of approximately 29.71%

– Daily time value decay of approximately 1.54%

In other words, although Leapmotor's underlying stock has risen strongly, the warrant terms are not particularly favorable. High implied volatility, high premium, and deeper out-of-the-money positioning mean investors need the underlying stock to keep rising rapidly for the warrant to perform well.

Especially since the stock price is already approaching the resistance level at HK$42.3, if it pauses in the short term, call warrants could face more pronounced time decay pressure than the underlying stock.

Ideal call warrants: 6.5% out-of-the-money options with relatively high delta

Li Auto's call warrants offer more tiered strike structures:

– Strike price at HK$58.15, out-of-the-money 6.5%

– Strike price at HK$68.8, out-of-the-money 26%

– Strike price at HK$72.015, out-of-the-money 31.9%

The hedge ratio of the product with a strike price of RMB 58.15 is approximately 56.75%, the highest among the three, with an effective leverage of approximately 3x. Although the leverage isn't particularly high, its price will respond more directly to movements in the underlying stock.

In comparison, the products with strike prices of RMB 68.8 and RMB 72.015 have hedge ratios of approximately 39% to 40%, and are also significantly more out-of-the-money.

The implied volatility of Li Auto's call warrants is approximately 63% to 67%, which, although still high, is lower than Leapmotor’s 74% to 78%.

Therefore, judging solely by product efficiency, it is clearly easier to find Li Auto call warrants closer to the current stock price with higher hedge ratios.

Regarding callable bull/bear contracts (CBBCs), the terms for Li Auto are relatively conservative.

For Li Auto, the bull contract’s call price is at 45 yuan, approximately 17.58% away from current price, leverage of about 3.8x。

This distance is relatively wide, implying lower call risk but also lower leverage. It is more suitable for investors who wish to avoid the risk of being close to the call price and are willing to hold with lower leverage.

As for bear contracts, the representative call prices are around HK$79 and HK$160, which are very far from the current price, resulting in limited sensitivity—these are not typical high-leverage short-term bearish instruments.

Which stock is more worth deploying via warrants?

If considering only the underlying stock’s momentum, Leapmotor currently appears stronger; however, when factoring in the product terms as well, the answer may differ.

Leapmotor

Advantages:

– Highest upside potential

– Stronger 5-day and 10-day momentum

– Today’s fund flows and volume ratio are supportive

Limitations:

– Most call warrants are deeply out-of-the-money

– Implied volatility as high as approximately 74% to 78%

– Lack of both put warrants and bull/bear certificates for two-way trading

– Stock price is already approaching the resistance level at HK$42.3

Li Auto

Advantages:

– Upside leverage ratio is also close to 90x

– Call warrants available with 6.5% out-of-the-money strike and delta around 57%

– Relatively comprehensive product selection

– Implied volatility relatively lower than Leapmotor's

Limitations:

– Some call warrants are still 26% to 32% out-of-the-money

– Bull warrant leverage is only around 3.8x

– The underlying stock is also nearing the resistance level at HK$55.6

Our view is:Li Auto has a stronger underlying stock story, and its warrant terms are more favorable and easier to trade.

If investors are purely chasing momentum in the underlying stock, Li Auto is more attractive; however, when deploying via warrants, it's easier to find Li Auto products with reasonable out-of-the-money levels and higher delta.

When selecting warrants, would you prioritize the strongest underlying stock, or prefer instruments with more manageable terms?

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