Run out of time better go straight to the point.

Recently, I follow several threads n the i3 and I learn that there are easily more than 30% i3 readers have exposure to Hangseng (HSI) derrivative products namely call and put warrants. What hit my mind is a newbie like me should understand more on the general HSI matters in order to excute BUY/SELL. I always respect and enjoy very much in any discussion no matter the forumer is from which stream (TA/FA/Intergrated/Psychology Market etc) because just like all religions lead us to he right way so the streams are also lead us to the final destination (Bank- to deposit our gain). These days I receive a lot of question from emails and I try my best to discuss some over here .

Disclaimer: I AM JUST LIKE ANYONE UTILISE THIS PLATFORM TO LEARN AND AT THE SAME TIME TO SHARE OUT TO THE COMMUNITY FOR BETTER LEARNING OUTCOME.

1) What is the first thing when we look at call warrant trade?
    Firstly, no matter we hook in what derrivative products we must always check whether our potential counter is in OFM,ATM or ITM. When approaching the expiry date ITM will "normally" give us better Margin of Safety as well as risk reward ratio. Of course with skill one can also benefit from ITM and ATM as long they trade at the right timing.

For example,
If Hangseng index: 19000 pts  ;

If trade HSI-Call warrant C22 and STRIKE/COVERSION at 20000 -  OUT THE MONEY (OTM)
If trade HSI-Call warrant C23 and STRIKE/COVERSION at 15000 - IN THE MONEY (ITM)
If trade HSI-Call warrant C24 and STRIKE/COVERSION at 19000 - AT THE MONEY (ATM)

2) Why the premium and gearing do not exhibit exact price action among the warrants?
    There is no rules or regulations that market maker or warrant issuer must transact the bid and ask price in actual implied price. Due to the time factor the warrants will not be priced at rational value.

3) Why and what happen if the buy queue or sell queue disappear suddenly?
    The HSI call and put warrants in KLSE platform usually will have market maker in control from 9:15AM to 4:15PM. You will see both large lots (5000 lots/2000 lots/3480 lots/1000 lots etc) from buy and sell queue will be cancelled at 12PM when Hangseng break for 1st session. Same goes to re-entry of the queus when approaching 2:30PM but not 2 to 2:26PM (safety check). Another critical time is at 3:59PM when market maker disappear and wait for Europe opening index. Important note here is not to panic when you see BUY queue disappear or notice big lots of transaction suddenly. The queuing on both side (Top1&2 BUY and Top1&2 SELL) will have significant signal to tell you if change to (Top2&3 and Top1&3). Explore yourself for some trading tips.

4) "Faster BUY, shark come in to buy" ------   How true is it?
     My sincere advice please filter all the comments from forum as you do not know who will tell you the truth. Some people are very sincere but might be wrongly intepreted the price action. If you got chance may be can consult your friend who execute the computer to auto-pilot trade the warrants in the investment bank. Market makers are equipped with first hand information and they have a team to feed them on market development, hourly volatility score from in house experts, the best is they have well established algorithm to excecute the bid and ask prices to make "projected" spread for products margin. Every investment bank and all market maker team has their pricing policy and they will review the volatility terms from time to time. They calculate the bid and ask prices from the underlying security's volatility terms and ALL IS WELL COMPUTERISED.  The implicit volatility of the prices of analogous on the market will serve as a forecast reference to the market makers. Because they are professionals group who deal with intelligent financial info so they know how to mark up, in or der to compensate the retail price of whosale volatility on professional markets.
Therefore, dont ever bluff the newbie how big the sharks are already in this warrant as we are fighting with a bunch of computers.

5) Is there any factors affect the price action?
    There are of coure. Global market sentiments from plicy makers, regional issues, geopolitic etc are also key factors of the enlarged or reduced volatility target. Learn more from volatility to know more tricks to read the market outlook of the particular trading day.

I am still new in stock market and always looking forward to hearing from your view. Hope we can learn and grow together.