Understanding the 4 Key Factors that may affect the Warrant Prices!
In the previous lesson, we delved into the world of Warrants & CBBCs (Introduction), exploring how to profit from trading them and the key differences between the Warrants and CBBCs.
Today, we will go on diving deeper into the world of Warrants & CBBCs, exploring their features and using them to enhance your trading strategies.
How to Pick the Right Warrants?
When choosing a warrant, we suggest that investors consider the following 4 steps:
Step 1: View on Underlying Share/Index
Firstly, consider the market view on the underlying share/index and select call warrants for bullish views and put warrants for bearish views. Additionally, have a target price in mind to align the warrant selection with desired profit potential.
Step 2: Timeframe
Secondly, consider the timeframe and match it with the warrant's expiry date to manage risk and leverage.
Step 3: Gearing Level
Thirdly, evaluate the effective gearing level to understand how the warrant price moves relative to the underlying asset's price
Step 4: Implied Volatility
Finally, assess the implied volatility and prefer warrants with lower implied volatility, all other factors being equal.
How to Read Warrant Quotes?
4 Key Factors Affecting the Warrant Price
To discover how they can provide you with unique opportunities to maximize your returns and achieve your financial goals,
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