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Put Warrants For Short Term Bearish View?
03 Jul 09

Overnight, the Dow and the S&P 500 tumbled almost 3% after a wrose than projected decrease in jobs added to concern that rising unemployment will prolong the recession. The unemployment rate rose to the highest in almost 26 years…

The following put warrants have exercise prices close to their respective last traded underlying share prices:

CapitalanMBLePW091204 (H7FW) exercise price $3.70.*

DBS MBL ePW091001 (H2RW) exercise price $10.80.*

OCBC Bk MBLePW091102 (H2UW) exercise price $6.40.*

UOB MBL ePW091102 (H2TW) exercise price $13.50.*

HSI16600MBLePW090828 (H9PW) exercise level 16,600 index points.*

HSI18000MBLePW090828 (H9RW) exercise level 18,000 index points.*


U.S equity markets plunged on weak jobs data
Overnight, the Dow and the S&P 500 tumbled almost 3% after a wrose than projected decrease in jobs added to concern that rising unemployment will prolong the recession. The unemployment rate rose to 9.5%, the highest in almost 26 years, prompting President Obama to call the report “sobering news” and commented that it would take “more than a few months” to turn the economy around (Bloomberg).


What are Put Warrants?
A put warrant gives the holder the right (but not the obligation) to sell the underlying share for a fixed price (the exercise price) at a specific future date (the expiry date).

Put warrants allow investors to potentially earn a profit when an underlying share price falls. Unlike call warrants whose prices tend to move in the same direction as the underlying share price, put warrants will tend to move in the opposite direction to the underlying share price, increasing in value as the underlying share price falls and decreasing in value as the underlying share price rises.


Why can’t I just short a call warrant?
Some investors prefer to ‘short sell’ a call warrant (ie. sell a warrant that they do not own and try to buy it back at a lower price for a profit) instead of buying a put. The risks with this strategy are firstly that you must close your position by the end of day or you will be subject to a forced buy-in by the exchange at the settlement date and a stiff penalty with a minimum fine of $1,000.

Secondly, your potential losses can be unlimited. If you buy a put warrant at $0.20, your maximum loss is $0.20, whereas if you short sell a call warrant at $0.20, your maximum loss could potentially be significantly higher as the price of the call could keep rising indefinitely if the underlying shares go for a rally.


Macquarie Capitaland Warrants
Trading Call Warrants (Short term bullish view)
CapitalanMBLeCW90909 (HI5W) exercise price $1.99.*
CapitalanMBLeCW91102 (HR2W) exercise price $2.388.*
CapitalanMBLeCW91203 (HT0W) exercise price $2.885.*
CapitalanMBLeCW91002 (HW7W) exercise price $3.283.*
CapitalanMBLeCW91103 (H6ZW) exercise price $3.80.*
CapitalanMBLeCW091202 (H7ZW) exercise price $4.40.*

Trading Put Warrants (Short term bearish view)
CapitalanMBLePW91002 (HW8W) exercise price $2.587.*
CapitalanMBLePW91202 (HQ7W) exercise price $1.99.*
CapitalanMBLePW091204 (H7FW) exercise price $3.70.*

Long Dated Warrants (Long term bullish view)
CapitalanMBLeC110103 (G9YW) exercise price $2.678.*
CapitalanMBLiC100401 (G9KW) exercise price $1.813.*


Macquarie DBS Warrants
Trading Call Warrants (Short term bullish view)
DBS MBL eCW090902 (HJ4W) exercise price $7.40.*
DBS MBL eCW091102 (HR1W) exercise price $9.30.*
DBS MBL eCW091002 (HX2W) exercise price $10.20.*
DBS MBL eCW091001 (H2QW) exercise price $11.60.*
DBS MBL eCW091202 (H8AW) exercise price $12.90.*

Trading Put Warrants (Short term bearish view)
DBS MBL ePW091001 (H2RW) exercise price $10.80.*
DBS MBLePW091002 (HX3W) exercise price $8.88.*
DBS MBL ePW091102 (HQ8W) exercise price $7.50.*

Long Dated Warrants (Long term bullish view)
DBS MBL eCW110404 (HJ6W) exercise price $7.50.*
DBS MBL eCW110103 (G9WW) exercise price $9.50.*
DBS MBL eCW110502 (H3IW) exercise price $13.00.*
DBS MBL iCW100401 (G9LW) exercise price $6.80.*


Macquarie OCBC
Trading Call Warrants (Short term bullish view)
OCBC Bk MBLeCWQ091203 (HS9W) exercise price $5.50.*

Trading Put Warrants (Short term bearish view)
OCBC Bk MBLePW091102 (H2UW) exercise price $6.40.*
OCBC Bk MBLePW091002 (HX4W) exercise price $5.00.*


Macquarie UOB Warrants
Trading Call Warrants (Short term bullish view)
UOB MBL eCW090902 (HI4W) exercise price $9.80.*
UOB MBL eCW091005 (H1KW) exercise price $11.50.*
UOB MBL eCW091102 (H2SW) exercise price $13.80.*
UOB MBL eCW091203 (H8VW) exercise price $15.90.*

Trading Put Warrants (Short term bearish view)
UOB MBL ePW091102 (H2TW) exercise price $13.50.*
UOB MBL ePW091005 (H1LW) exercise price $10.50.*

Long Dated Warrants (Long term bullish view)
UOB MBL eCW110404 (HJ7W) exercise price $10.00.*


August Trading Call Warrants (Short term bullish view)
HSI17400MBLeCW090828 (H9OW) exercise level 17,400 index points.*

HSI18800MBLeCW090828 (H9QW) exercise level 18,800 index points.*

August Trading Put Warrants (Short term bearish view)
HSI16600MBLePW090828 (H9PW) exercise level 16,600 index points.*

HSI18000MBLePW090828 (H9RW) exercise level 18,000 index points.*

 

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