I always believe that 5% of your capital should be set aside for some more exciting activities. Warrant is one. PetroChina (857) need no introduction. In the past 6 months, the stock price went up and down between HKD 8.2-ish and 10.4-ish. The price was closed at 8.96 today. Is this a good price? Well, the lower the better. The price has been below all moving averages and, again, the basic stuff - RSI - loiters in the middle line. It does not seem to be particularly attractive - yet. But we should pay attention to it. Not the stock but a call warrant - 17308 Rabobank - PetroChina call, expiring 28 July 2010 with leverage ratio of 8.1x.
17308 closing at HKD 0.048, yes, 4.8 cents. Using the simple calculator provided by BNP Paribas, if 859 goes up back to 9.99, 17308 will reach 0.104, up 116.7%, with certain assumptions of implied volatility, leverage, etc. 9.99 is not an unachievable price. But you need not be that greedy as if 859 goes down back to 8.20, you will lose 50% of capital. We can wait and should act swiftly. I believe if 17308 comes down to around 0.035 or 0.03 (the underlying stock at 8.50), there is a fair chance that we can make some profit.
Please bear in mind, though, that this is a call warrant which means you can lose 100% of your capital. Therefore 5% of your capital is adequate unless you're very familiar with warrant/option trading.
Happy Investing!
17308 closing at HKD 0.048, yes, 4.8 cents. Using the simple calculator provided by BNP Paribas, if 859 goes up back to 9.99, 17308 will reach 0.104, up 116.7%, with certain assumptions of implied volatility, leverage, etc. 9.99 is not an unachievable price. But you need not be that greedy as if 859 goes down back to 8.20, you will lose 50% of capital. We can wait and should act swiftly. I believe if 17308 comes down to around 0.035 or 0.03 (the underlying stock at 8.50), there is a fair chance that we can make some profit.
Please bear in mind, though, that this is a call warrant which means you can lose 100% of your capital. Therefore 5% of your capital is adequate unless you're very familiar with warrant/option trading.
Happy Investing!
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