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Online Share Trading

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Trading Warrants - Waves

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Gugu
Occasional Contributor
Fellow traders, does anyone have any information on how to assess whether it is time to enter or exit wave calls or puts, particularly those issued by Deutsche Bank? Is there a reliable way to predict the direction of market movement?
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32 REPLIES 32
Rovert
Super Contributor
Tip 1 : Avoid Warrants period
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Gugu
Occasional Contributor
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barry_1
Super Contributor
As Rovert says warrants are not for beginners....U might be interested to track the direction of the market by adding TOPSKN and TOPSKQ to a watchlist....Since Sept N has advanced by 40% and Q has retreated by 38%...,Do attend a warrant course from SBK if possible....also do read the on-line course....Set up a watch list of trades u would have made,then check your results,do not trade live,rather buy small caps to get the feel of trading first.
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Gugu
Occasional Contributor
Thanks Barry. Very helpful indeed.
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BC02
Super Contributor
I remember reading from a trading book, where an experience trader said "Warrants/Options has been the only instrument that he traded where his call was right and he still lost money."
They are a very different beast.
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SimonB. Do you agree? Remember back in the good old days @ FIN24. You used to issue weekly TA updates and recommend the associated Warrant. By then, CFDs and SSfs were the things of institutional investors. Not available for Joe bloggs on Online share tradings.
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I made good money on warrants, onto CFD's these days
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I made good money on warrants, onto CFD's these days
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Joch. And how is your new experience with CFDs compared to warrants? Any improvement beside higher levels of gearing? How about if your position on the underlying share is opposite?
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Russ
Super Contributor
With warrants you have to beat the spread,costs and time decay.Not for beginners.
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Preston
Super Contributor
Benefits of warrants vs CFD's and SSF, is that your loss is limited.
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I have been trading warrants for a while now. I wanna try CFDs. However, I do not like the idea that if I put in say a R1000 into the market and my position is wrong (for whatever reasons like Greece debt woes), my looses have a way of eating into my balances of say R5000. Is that how the CFDs work? For example: with warrants, if the underlying share drops by say 10% and the warrant's gearing is 5 on an exposure of R1000. My account balances will still remain R5000 and my warrant holdings would be somewhere in the region of R500 with -R500 (loses)
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From my experience with warrants, there are two dominating factors. 1) Time decay (2/3 down the live of the warrant. Generally around 90 days before expiry = disaster). 2) Liquidity. So far warrants are not that liquid like shares (particularly some other bank issuers)
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I am not sure but OST website they say "Risk profile: CFD = High risk; SSF = High risk and Warrants = High risk but limited to premium Paid."
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Gugu
Occasional Contributor
Thanks BCO2 Much appreciated.
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Gugu
Occasional Contributor
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Gugu
Occasional Contributor
Nice to see someone positive about Warrants. Obviously you found some method/strategy that worked for you. I also beleive that with a bit of luck, patience and all the necessary info. one could make warrants work. What was your method?
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The idea is that you NOT, I repeat, you are NOT trading the warrant. But you are trading the underlying instrument (share, index, etc). This is a similar process as the SSF or CFDs. The trick with warrants is the chosen warrant.
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I only used warrants with 120+ days left, then used my entry and exit strategy which I still use on CFD's..same principal apply
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