Yeah, this warrant should be doing well since the Market is on a downturn. We can but this put warrants for 2 purposes. The first purpose would be to hedge your portfolio against losses in a downturn. For example, if you are holding a basket of stocks (for example: 5 stocks from the index) and the market is going down which results in your portfolio in going down. But you dont want to sell those 5 stocks which you are holding since you believe in its fundamentals. Hence, to prevent from any further losses in the short-term, you could buy this put warrant which acts as a hedge against the index. Every time the index drops, this warrant should increase in price. Hence you are offsetting your losses from holding those 5 stocks with this put warrants increase in price. (Put warrants increase in price when the index drops, Call warrants increase in price when the index goes up).
The second use of this warrant would be to purely speculate on the market. You could buy this put warrant as a bet that the KLCI is going down. (Which most likely is going down). That is what im doing.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
ZEPAN
606 posts
Posted by ZEPAN > 2018-12-20 08:17 | Report Abuse
WE BUY, YOU SELL, HAHAHA