Posted by kcchongnz > 2012-09-16 14:13 | Report Abuse

Dialog CL closed 1.5 sen or 60% higher from 2.5 sen to 4.0 sen while the underlying share closed 8 sen up, or 3.5% from RM2.30 to RM2.38 on 16 September 2012. The exaggerated gain was because of the highly leverage option instrument with a gearing of 20 times and an effective leverage of 9 times. CL has an exercise price of RM2.50 and a conversion ratio of 3:1, with a expiry date of 5 more months to go on 28/2/2013 . The warrant is hence out-of-the-money with zero intrinsic value. At 4.0 sen, CL is trading at a premium of 10%, meaning that punter loses money if Dialog share does not move up from now to 10% above RM2.50 on expiry of this call warrant. The attraction of CL lies on its relatively long expiry date and its high leverage and a low implied volatility of only 24% from option pricing model compared to the historical volatility of Dialog of 29%. If Dialog rises up to the average target price of RM2.90 given by all the analysts before the expiry of CL, punters buying CL now at 4 sen can make 233% return. This means that this call warrant still offers some excitement for punters as there is an opportunity of making exaggerated return punting on it.

Posted by kcchongnz > 2012-10-10 11:11 | Report Abuse

Which call warrant of Dialog is the best punt?
Dialog is trading at 2.38 now. Its call warrants are as follows:
Warrant Price Expiry date Premium Gearing
CI 0.175 24/10/2012 0.3% 5.0
CJ 0.050 24/10/2012 1.3% 13.1
CK 0.050 8/01/2013 14.7% 15.9
CL 0.035 28/02/2013 9.5% 22.7
CM 0.145 2/04/2013 8.6% 5.5
Premium wise, both CI and CJ are the lowest at 0.3% and 1.3% respectively. However, they will expire in two weeks time and it is unlikely Dialog can swing that much for the warrants to make significant profit when they are cash settled. Of the remainder warrants, CM has the longest expiry time left and it has the lowest premium. However, its gearing is the lowest at 5.5 times, not very great for punting compared with CK and CL. Compared with CK, CL is obviously has better value than CK as it has a lower premium (9.5%), the longer expiry time and larger gearing at 22.7 times. If you are bullish about Dialog, its call warrant CL may offer a better punt due to its high gearing.

Posted by kcchongnz > 2012-11-07 13:55 | Report Abuse

Dialog closed up 5 sen, from 2.46 to 2.51, or 2% this morning. Its call warrant CL closed up 1 sen from 3.5 sen to 4.5 sen, or 30%, 15 times more. See what I meant by exciting punt. If you are really bullish about Dialog, go for its call warrants; and CL is the best value at 5% premium and leverage at 19 times.

Posted by kcchongnz > 2012-11-19 12:04 | Report Abuse

Is dialog CL on sale again?

Posted by Mat Cendana > 2012-11-19 12:49 | Report Abuse

I'm in this one (CL), at 0.03. Betting that the mother will test and exceed 2.50 again within the next three months. I believe there's a fighting chance,

Posted by kcchongnz > 2012-11-19 12:54 | Report Abuse

Mat Cendana, I think you have made a great punt. Read my posts above. Aiseh, all the posting were done by me only. Nobody gives some feedback or different opinion. Like that ah? Not sure if I am right or not.

Posted by Mat Cendana > 2012-11-19 14:24 | Report Abuse

Actually I had bought it after reading your comments above:-) I'm trying this strategy with a few different warrants - a mixture of fundamentals, TA and a dose of risk-taking:

1) The mother must be a company that's fundamentally sound.

2) Generally, it is on an uptrend. The time to buy is when there's a dip or correction.

3) The CW comes with an attractive premium and gearing, plus with reasonable time remaining to its expiry. This one I define by "at least three months". With Dialog-CL, I feel the ex price is within range, and the gearing is worth the risk.

I'm spreading out my tradings among a few CWs, aiming for one to really `meletup' (like SKPetro-CA). One big winner is often enough to cover the losers should there be any.

Posted by kcchongnz > 2012-11-19 14:53 | Report Abuse

Mat Cendana, good strategy. This one must learn from you. Good luck.