Posted by kcchongnz > 2012-10-07 17:37 | Report Abuse

Just read this article by cpteh, good one. As I myself have been writing about punting (yes punt, not invest)call warrants in i3investor, I think I need to remind readers about this educational piece. Yes, without proper knowledge about call warrants, you are extremely likely sent to Holland. Read the following research finding:
[In their 2009 paper on “option trading and individual investor performance” , Rob Bauer, Mathijs Casemans and Piet Eichholtz examine the performance and persistence of individual investors trading at a Dutch online broker. Using a database consisting of more than 68,000 accounts and eight million trades in stocks during January 2000 to March 2006, they find that the bottom tenth of performance lose more than 90% of value!]
Punting call warrant which is a form of option has more disadvantages in Bursa because SC won't protect small retailers. Market makers, insiders and big time speculators control and manipulate the market. Do you know that every time maker makers issue new call warrants, they are selling them at extremely high price (or high volatility)? They control the bid-ask spread, the settlement price by pressing down the underlying share price at expiry of the call warrants etc. But that doesn't mean one has no chance to beat them. To do that one must know this instrument well, understand your risks, and win against the emotion of the market participants, etc.
Yeah, without arming with all the above, stay far far away from call warrants.

Posted by passerby > 2012-10-08 09:30 | Report Abuse

very educative.normally if you warn those not well equip to stay away, they die die also will enter the war zone.