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Warrant STi1800PW090303
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mimi08
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10-Nov-2008 09:33
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I have just cut lost and move on. Heavy losses on my part. Couldn't sleep well the whole of last week and last weekend. To those out there, be careful when you play with warrants, learn from my lessons. I have paid for a painful lesson. :( |
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CWQuah
Master |
10-Nov-2008 08:36
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Good pts brought up by Elf. On the pt that mkt makers establish the prices of warrants, it's better to observe HOW they make the prices for warrants in response to underlying movement b4 deciding to touch warrants too. Some mkt makers adjust the spreads as the underlying moves, such that the bid-ask spread actually widens to 2 or more bids despite the underlying moving in one's favour. Some maintain an almost constant one-bid spread throughout underlying movement range. As such, the trading odds are still skewed in favour of the mkt maker for warrants that exhibit the widening spread phenomenon (buyer ends up paying higher price without a commensurate increase in the selling price). So choose the warrants very carefully. It's possible to have 2 warrants of exactly the same strike price and expiry date by 2 different companies with 2 different bid-ask spread behaviour. |
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elfinchilde
Elite |
10-Nov-2008 00:04
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to add in to CWQuah's posts: (believe you mean the 1800 bnpepw 090330 warrant?): not necessarily "should have made" even if the STI moves in your expected direction: time decay is one factor, although your warrant is a longer dated warrant, so less of that factor. the main thing to note is that warrant prices are set by the market makers. in this case, your market maker is BNP--ie, Banque Nationale de Paris /Paribas. If you go to sgwarrants and calculate prices of the warrant at certain strikes and dates, what you'll realise is that the warrant early on had factored in the drop already. ie, when you buy it at 40c, it had in effect priced in a dip to approx 1680 already. which is why even if the STI opens down, the warrant may not go up. You need to check always that the warrant px correlates with the STI (more precisely STI futures) current reading. Avoid buying warrants that have priced in market movements. Generally, for newbies, i'd say to avoid warrants altogether. they are complicated instruments which are suitable only for those with good technical skills and/or large capital. as for your current warrant, elfie can't tell you what to do, but i can tell you though, that barring any major news shakeup, the bias is for the STI to be on either consolidation or uptrend mode for this coming week. so do take care. 
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mimi08
Member |
08-Nov-2008 17:10
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Thank you for your advise. |
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CWQuah
Master |
08-Nov-2008 11:47
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You can find it on the SGX website http://esite.sgx.com/live/dt/DTFuture.asp?SGFE. Take the most recent month's pricing (Nov 08). On another note, do understand warrants pricing is affected by at least 5 different factors. http://sg.warrants.com/singapore/home4/basic/handbook05.html Best to be very clear on the rules of the game before even touching them.
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mimi08
Member |
07-Nov-2008 17:50
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Where can i get this MSCI STI futures reading? | ||
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CWQuah
Master |
07-Nov-2008 17:28
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Mimi08, Warrants depreciate with time. Since this was bought last Fri, you are incurring the time decay loss. Also, strictly speaking, warrant price correlation is to the MSCI STI futures, NOT STI. So even if STI opened at 1722, if STI futures were more bullish, you'd clock losses from the time decay + STI futures. |
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mimi08
Member |
07-Nov-2008 16:17
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I mean based on morning 1722 open sti, should have made isn;t it? | ||
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kawaiiboi
Member |
07-Nov-2008 16:07
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ok .. you should know that today market drives warrent.. so more ppl expect STI to rebound.. so you value is now worth lesser as now its more than 1800 | ||
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mimi08
Member |
07-Nov-2008 15:58
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I am stuck...and confused. I bought my STI put warrant last friday at around sti 1771 at 40cents but then this morning when it open at 1711, it opens at 0.39. Can anyone advise? sob sob... | ||
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