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Online Share Trading

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Warrants

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Not applicable
Hi Guys Does anyone trade warrants? They grow exponentially fast but its so difficult to sell off then.. Any thoughts guys?
15 REPLIES 15
Russ
Super Contributor
Spread, time decay, costs, gearing. Difficult to make money unless you are already a good trader. Easy to lose money. Just my opinion.
Not applicable
Hmm..you adequately summarized that! Had a bad experience..due to lack of experience :(
SimonPB
Valued Contributor
how much different is that from CFDs or futures ??
Russ
Super Contributor
He didn't ask about cfds or futures.
Rams
Super Contributor
Not applicable
Rovert
Super Contributor
Warrants suck. i'd say the time decay loss with warrants is worse than interest paid on CFD's ..my opinion
Russ
Super Contributor
Hands up anyone who has made money on warrants. There, I don't see any hands.
kwagga
Super Contributor
Stay away from warrants. You are dependent on a market maker and time decay is something else you can't control. High risk low reward instruments if you ask me.
THRESHOLD
Super Contributor
Warrants... an instrument for those who have lost all respect for their money. They have a place as short-term hedge instruments IMO - and that is about it. I would far rather trade CFD's and manage my margin properly if I was inclined to take the risk.
SimonPB
Valued Contributor
overt, diff is interest is liner, time decay is not and is very aggressive towards the end
SimonPB
Valued Contributor
i made monet for years off warrants, and the reason I don't trade them any mores is same reason I don't trade CFDs any more .. I don't trade shares at all .. trick with warrants is that if you get the trade right but pick the wrong one you lose, most pick teh wrong one
koos2
Super Contributor
Why do i wanna trade it after all of the above?, i can get no satisfaction.
Rams
Super Contributor
i never traded warrants because i never understood them. But is not less of a risk than futures or CFDs as you cant lose more than your "margin", like on a day when the markets sell off 10-20%.
THRESHOLD
Super Contributor
CFD's track "true" to the underlying share. Warrants are useless as soon as the price drifts more than a certain amount away from the strike - or if volatility picks up or... Iin no time at all - the warrant is so "out of the money" that you are left with a "stub" that represents an "interest packet" and nothing much more. So - the money that you put in is more at risk. A very professional instrument - that needs to be used mindfully as part of a portfolio. Trading then "naked" is a mug's game (or a genius's.)