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?
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.
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.
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.
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)
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)
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?
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.