Guys, do you all read the details in recent company announcement? Ageson will test sand shipment using 2 ship. Later announcement may update on the test shipment commencement.
OK me first, A Structured Warrant (SW) is a security that gives the holder the right but not the obligation to buy or sell a specific underlying asset at an agreed price (strike price) on the expiry date. As an investment tool, it provides investors’ exposure to an underlying asset for a fraction of the price. On the Bursa Malaysia, warrants are currently available over shares and indices.
1.Call Warrants: if the settlement price of the underlying is above the strike price at expiry, the call warrant is deemed to be “in-the-money” and the holder will receive a cash payment. Otherwise the warrant will expire worthless.
2.Put Warrants: if the settlement price of the underlying is below the strike price at expiry, the put warrant is deemed to be “in-the-money” and the holder will receive a cash payment. Otherwise the warrant will expire worthless.
If its Single stock warrants: for warrants over shares, the settlement price of a Macquarie warrant is calculated by using the average closing price of the shares for the five (5) Market Days prior to the expiry date.
Or if its Index warrants: for warrants over indices, the settlement price of a warrant is calculated by using the final settlement price of the relevant spot-month index futures contract on the expiry date.
Kingsley No, warrants are not a ‘zero sum game’. The aim of the issuer is to make a profit on the risk management of the warrants sold, in doing so they also take on risk. When issuers sell warrants, they will normally buy shares or other derivatives to ‘hedge’ their positions and attempt to capture a margin whether the share price goes up or down.
For example, when an issuer sells a call warrant they will usually go into the underlying market and buy the shares to hedge themselves. Thus, if the share price increases, and investors profit on their call warrants, the issuer will also gain on their shareholding.
It is a common misunderstanding that issuers want investors to lose money. In fact, it is quite the opposite. If investors lose money, they will likely not trade warrants again, whereas if they profit from trading warrants they are more likely to continue trading and the market will grow.
GoodieTwoShoe , Every warrant issuer must appoint a market maker (MM). It is the MM’s role to provide continuous bid and offer prices in the warrant so that there is sufficient liquidity for investors to enter and exit their trade. The MM will also assist in price discovery, and will often be the primary influence in determining the market price for the warrant. Welcome
Morning USHER, Price changes in listed securities are commonly published on a “daily price change” basis, which are derived using the difference between the current traded price and the closing price of the previous day. However, using this same method to track the performance of a warrant is often inaccurate, as warrants do not trade as often as shares. The previous closing price for a warrant may relate to a trade done the previous morning, or even days or weeks ago.
The best way to track the performance of a warrant is to look at the change in its bid price over the period, and compare this to the price change in the underlying stock (over the same corresponding period of time). The warrant bid price is the price at which investors can sell their warrant and thus is the best reference for the value of a warrant at any point in time.
O'Brian! The live matrix has a direct feed to market making system, showing investors exactly where the market maker’s current bid and offer price in the warrant will be, for various levels in the stock.
The live matrix is a very useful tool for two reasons. Firstly, it allows investors to see how the warrant price will move in line with movements in the underlying stock or index, providing transparency and also better understanding. Secondly, it allows investors to see whether it is maintaining a tight spread in our bid and offer quotes.
There are a few instances where a market maker may widen their spread for a warrant, such as when the delta of the warrant becomes very high or low, or when the issuer sells out of inventory. Investors should take great caution when buying warrants that are on a wide spread, however this is not always visible as other investors’ orders can make the warrant appear as if it is on a tight spread. Now with the live matrix, investors can see exactly where bids and offer prices are and whether we are keeping tight spreads.
I am 菜鸟, morning LV! The exercise ratio is the number of warrants needed to exchange for one underlying share or index futures at expiry. The sole purpose of the exercise ratio is to break down the warrant into smaller units, so a warrant which is priced at RM1.00 would then be worth RM0.50 with an exercise ratio of 2.
The sensitivity of a warrant price to the changes in the underlying price can be estimated by “delta per warrant”.
A warrant with smaller exercise ratio is more expensive, but will have higher delta per warrant. While a warrant with higher exercise ratio is cheaper but will have lower delta per warrant. If all else is equal, both warrants would give you the same return in percentage terms. Therefore, the exercise ratio should not be a major differentiating factor in the process of choosing a warrant.
菜鸟KennyDowJones I understand that changes in the implied volatility levels can sometimes affect warrant prices. How can I know if the volatility level is reasonable?
LV! The implied volatility (“IV”) for a warrant reflects the comparative price versus other similar warrants. You can compare the IV of a warrant against similar warrants over the same underlying only. If the warrant in question has a much higher IV than others, it may be that this warrant is relatively overpriced.
Sometimes the IV of a warrant can change and effect the warrant price. This is usually due to the supply/demand for the warrant, or because there is a change in the volatility of the underlying share or index. An increase in IV will cause an increase in the warrant price, where a fall will cause the warrant price to decrease.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Kingsley
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Posted by Kingsley > 2020-06-23 13:48 | Report Abuse
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