Tuesday, October 28, 2008

Gut feel and analysis was right after all !

Friday's recommendation (24th Oct 2008)
Buy STI 1800BNPeCW090330 at 0.245 ( selling price in market)

Tuesday's Morning ( 28th Oct 2008 9.49AM )
STI 1800BNPeCW090330 (buying price in market = 0.18 )
There paper loss of 26.5% !!

Tuesday Close ( 28th Oct 2008 5pm)
STI 1800BNPeCW090330 at 0.275
Paper profit of 12.2% !!

Hence my gut feeling together with the technical analysis done on friday was right! And if you actually follow through and had faith to hold till the end of the day, you would have made a profit of 12.2% !!

This maybe purely conincidental, but I believe technical anaylsis will give you a higher chance to be correct, thought its not always 100% right.

*Disclaimer : What ever appears on the blog is for your own reference only. It is not an investment/trading advice. It is always best to consult your personal financial adviser before parting with your money.


vincent said...


i like your blog.

btw, i'm new to warrants here. warrants closer to the exercise date, tend to lose their value. thus, if u happen to hold warrants but would like to get rid of them? how liquid is that?

ntuchartist said...

Hi, thanks!

Frankly, I do not trade much in warrants and I dun look very much into how warrant prices are meant to be calculated, cos I got a feeling that the issuer do not really follow closely to those rules.( things like volatility is subjective)

Actually, I realized though in theory warrants are suppose to lose their value near their exercise date, some might actually rise. An example would be a put warrant. The underlying stock might be rising for a while, and the week before the exercise date, the market suddenly goes into turmoil, and the value of the stock drops so fast, that there is a HIGH chance that by the exercise date, your put warrant might be worth quite a lot. This is contrary to the warrant should lose its value nearer the exercise date. I.e. when the warrant has a more predictable price nearing the exercise date, it might cause the price to rise..

As for how liquid, nearing the exercise date..I dun suggest keeping it all the way because usually nearing the exercise date, it does get quite illiquid and the spread might be very big. Apparently I heard from forums that 'BNP" , the issuer, has a very bad reputation..

I suggest paper trading in warrants before actually trading them, because they do not really follow what books describe them to be..