ETO & Warrant hedging, page-2

  1. 5,822 Posts.
    re: ETO & Warrant hedging ... debono Hi debono, haven't heard that one ... lol

    IMHO the main issues are more likely to be a combination of reduced Warrant Premium revenue due largely to traders deserting the market generally and excessive ETO 'spreads'.

    Commsec recently introduced 'real time' data and OCH are working hard towards 'online trading' which has been postponed a couple of times and lastest hints suggest early next year...

    In recent times, ETO Bid/Ask 'spreads' have become excessive, allowing Warrant Issuer's with 'sharp pencils' to trim I/Volatility in the hope of attracting ETO business.

    Parity has attempted this strategy but more to enable an edge of competing Issuers with similiar Warrant offerings. Warrant traders due to forums such as this are far more savvy and shop for I/Volatility as part of the exercise.

    I have highlighted a number of examples here in recent times where the Warrant was 'better value' than the ETO counterpart.

    This was to bring to attention of traders this fact and to dispel the myth that Warrants are not good value ... e.g. "Warrants are for mugs" was one thread I slipped into.

    Commsec is playing 'hard-ball' on ETO Brokerage but I expect to see some movement here as the 'game' hots up. Commsec ETO is working hard to attract players without having to trade-off the inherent risks.

    For many derivative traders ... the combination of 'instant online trading' and discount Brokerage is mega green.

    Cheers ...


    This is only my view ... read the red stuff.

 
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