Posted by Blacksails > Mar 29, 2017 06:45 PM | Report Abuse KC Chong, What is your opinion on Maybank-C24? Would you say call warrants are used by seasoned traders/ investors as an "insurance cover" in certain cases, if you know what I mean.
Writing, or selling an option, or call warrant is more for investment banks here, not traders/investors like those markets with matured option market.
The writer of options would have the underlying shares for those "covered warrants".
Posted by Blacksails > Mar 29, 2017 08:46 PM | Report Abuse If I'm not wrong, the first covered warrants were issued by PNB, and they were all blue clip counters. Believed PNB made a big loss in the end.
If PNB had hedged, or covered those written call warrants, they shouldn't be losing big.
They appeared to become speculators rather than as hedgers.
Fake accountant claimed to be better than fake accountants? Stockmanmy, you are making fun of yourself. What a JOKE of the day.
Posted by stockmanmy > Mar 29, 2017 06:35 PM | Report Abuse kc, I am certainly better than those who spread fake news and accuse others of being fake accountants.
Wrong. Choose your Warrants wisely as per KC. Otherwise your CW will be like old man tak boleh naik (due to high premium and low gearing)
Trading Volume is secondary. My Airasia C27 rose from 21 sen to 67 sen but all this while thinly traded
Don't believe me ? Go check the chart
manmy always think he very intelligent and made sweeping statement . He can bluff others, but cannot bluff old dogs like me and KC
Posted by stockmanmy > Mar 27, 2017 05:29 PM | Report Abuse
buying the c with the largest volume has a lot of advantages, the most important is that it will response quickly to market conditions..you do not want to buy a c that is half dead and shows no response.
But I bought not much. Only one twentieth of my mother share exposure. Instead I punt big on mother shares. The percentage return lower, but I can punt real big. You can't do that for Call Warrants. It is madness to put 40% (lets say) of your portfolio in an instrument that will expire in few months
I would also like to take the opportunity to touch on the topic of sailang promoted by manmy. No body really sailang by betting big big on a particular stock. The process is gradual. You starts small, and as more info trickle in and things seemed to evolve in positive direction , you scale up your exposure (sometime drastically)
When visibility is really really good and risk very favorable, you execute the final "sailang" jump
You sprinkle it on your portfolio like you add spice to cooking. (Nobody cook and eat a whole pot of spice)
It will make your food super extra delicious
For example : Affin at 2.20 is cheap but not entirely sexy. But if you come up with some money to add some Affin CW to your exposure (let's say 10% of mother share value), the whole picture changes
Affin went up to 2.80 only recently but CW has gone from 11 sen to 70 sen+
So the return becomes very attractive
Posted by insulter > Mar 28, 2017 10:53 AM | Report Abuse
it is not a right thing to teach retail call warrant... most of the people lose until underwear lose...
Icon, your education is always very good... may i know on low premium selection, how do you judge low premium? Do you set a target like below 10% or 20% or 30% is ok?
low premium means it is going to expire soon....simple as that. forget about premiums, just buy those with the highest volume. At least you have plenty of smarter people with you.
wiki123 > Mar 30, 2017 09:31 AM | Report Abuse
Icon, your education is always very good... may i know on low premium selection, how do you judge low premium? Do you set a target like below 10% or 20% or 30% is ok?
The reason I participant in this thread is to say......precisely this...that people like you are focusing on the wrong thing.
wiki123 > Mar 30, 2017 09:31 AM | Report Abuse
Icon, your education is always very good... may i know on low premium selection, how do you judge low premium? Do you set a target like below 10% or 20% or 30% is ok?
Manmy, i dont think this is relevant to company issued warrants. Even more so for penny warrants. Structured warrants and company warrants behave very differently. Co warrants practically mirrors the mother share whereas SWs has the speculative element in them.
Premiums and gearing are just risk management mechanisms in place to reduce speculative risk in selecting SWs.
Posted by stockmanmy > Mar 30, 2017 09:42 AM | Report Abuse
icon
the theory of gearing and premium is not very sound.
Gamuda W and Genting W has high gearing but low premiums and long periods....and stays like that forever.
A better theory is penny warrants.....penny warrants always has very high premiums and next to zero gearing and way way out of money.
Gearing or leverage....means how many times u get to borrow loh....!! If the gearing is 10x....means if u put 10%...u can borrow 90% using warrant as a means of funding....instead of borrowing from the bank loh.......!!
wiki, as a rule of thumb, for normal warrants with lets say 2 years life, I prefer premium lerss than 25%
for call warrants, prefer zero to 5% premium
if you want to buy high premium CW, you need to be careful of IB issuing additional new Warrants (all of them have the right to do so, you know ? just check any of the CW term sheet, it is a standard term). Anytime IB issue additional new call warrants, the existing Call Warrants will experience dramatic premium evaporation as people has the impression that the IB is going to dump the new warrants on them (which is not the case. It is a long story, sigh). If your premium is low, your CW will not be affected. If your premium is high, you can kiss goodbye to your money as you can expect the premium to disappear overnight
Posted by wiki123 > Mar 30, 2017 09:31 AM | Report Abuse
Icon, your education is always very good... may i know on low premium selection, how do you judge low premium? Do you set a target like below 10% or 20% or 30% is ok?
Yes it mean sensitivity also loh...but on crude ways....for layman..it means how many time can borrow loh....!! A high leverage means....very sensitive loh.....bcos borrowing alot mah......!!
Bros & sis here, Would you give EG-wc a punt ? It is now at a merely 13% @$0.520 45 months to expiry. Consider getting less as it is in the semicon field.
KC Chong, About a decade has past since PNB first issued those covered warrants in Bursa. Do you think the current issuers like IBs hedged all their call warrants?
Posted by Blacksails > Mar 30, 2017 12:10 PM | Report Abuse KC Chong, About a decade has past since PNB first issued those covered warrants in Bursa. Do you think the current issuers like IBs hedged all their call warrants?
If IBs do not have the underlying share before issuing those call warrants, those warrants are "naked" warrants, not termed as "covered" warrants.
If IB has the underlying shares before writing those call warrants, then the rise/fall of the underlying shares/warrants do not matter that much, as warrant price moves in tandem with the underlying shares. The loss in warrants is compensated with the rise of the underlying shares it possesses, and if the hedging is done correctly.
Posted by stockmanmy > Mar 30, 2017 11:11 AM | Report Abuse Just focus on the mother share movements and buy the highest volume warrants if you want more andrenaline......nothing else matters.
Posted by stockmanmy > Mar 30, 2017 02:17 PM | Report Abuse Air Asia, they give you many CW to choose. Is this real choice or Hobson's choice? You think you are so smart you can choose the one cW that will make you money while the rest will lose you money? is that arrogance, ignorance or stupidity? it is just marketing gimmick to suck you in.....like a supermarket with many choices of cigarettes. I think a little knowledge is a dangerous thing. your task is not to choose the one CW that will make you money. Your task is to read the Air Asia trend correctly.
This article has shown you, with numbers, that precisely by choosing the call warrants with low premium, high gearing yields you the best returns such as C34, +43.5%, C35 at +25.2%, against C40, the highest volume? that incurred total loss.
So please show your records, with numbers on the statement as claimed by you, to justify that you are not "arrogance, ignorance or stupidity.
Posted by stockmanmy > Mar 30, 2017 04:38 PM | Report Abuse kc you mislead people You compile a table of warrants and profit and loss at expiry dates. of course, there will be some in the money, some out of money at expiry date because all of them were issued with different terms....... you have shown nothing meaningful.
I misleading people? where and how?
Table 1 in this article clearly shows that C34 and C35 with zero premiums, expire with cash settlement of a gain of 43.5% and 25.2% respectively after two months as shown in table 2.
Table 1 also shows C40 with a premium of 36.6% two months earlier, and with the same expiry date as C34, expires with total loss as shown in Table 2.
Isn't that very clear a call warrant with low premium with a better outcome at expiry?
Volume was never talked about volume in the article. It was not that relevant for me.
You are the one who say again and again and again that the call warrant with the highest volume is the best. So, show us, which warrant has the highest volume and has it got a better outcome?
Shows numbers, evidence, proof etc, and not simply bark!
In an efficient market , it should be indifferent whether it is c1, c2, c3 or c4.
Its an interplay between low premiums, high gearings and long periods.
Depends what you want.
In an inefficient market, sometimes you can have lower premiums even for different call warrants with the same period and gearing even for the same stock.
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Posted by Blacksails > 2017-03-29 21:03 | Report Abuse
blue chips counters like Maxis, Tenaga and Maybank.