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Phillip-Macquarie Warrant Challenge: Fortnight 3 Winners
We’ve past the halfway mark for the Phillip-Macquarie Warrant Challange with only 3 more fortnights to go! As fortnight 4 gets underway, let us hear what the fortnight 3 winners had to share in this interview. Congratulations to all winners for the third Fortnight of the Phillip-Macquarie Warrant Challenge! 1. Koh Pee Hoh 2. seetkl 3. Herman LeeTop performer gains from HSI call warrant
First place winner Koh Pee Hoh entered a position on HSI call warrant HSI23000 MBeCW140429 (U1OW) shortly after the competition began in March. However, the gains on his warrant came only in the last two weeks when the HSI moved up 5.3%. This allowed Pee Hoh to exit from U1OW last Thursday (10 April) with gains of more than 179%, earning himself top place on the fortnightly winners table.
During an interview with Pee Hoh, he revealed that while he had experience in trading futures, he was unfamiliar with warrants and hence held back from trading the real market. He is using the Phillip-Macquarie Warrant Challenge to gain insight into concerns he previously had about time decay and whether there would be sufficient liquidity provided by market makers. After more than a month of observing and trading warrants via the Challenge, Pee Hoh had this to say, “I realize that most of the warrants have good liquidity with the market maker providing consistent pricing. My biggest concern about trading warrants had to do with the reliability of market makers so I was comforted by what I experienced in that aspect via the Challenge and am finally confident about warrant trading.”
Market makers provide continuous buy and sell quotes in their warrants, providing investors with the liquidity to enter and exit their positions. Investors should note the important difference between “liquidity” and “volume traded” for warrants. Warrants are different from shares in that liquidity is primarily provided by the market makers. The buy and sell quotes provided by the market maker give you an indication of liquidity, while volume traded refers to the actual volume of trades that have been executed on the exchange. The quality of the market maker is one of the most important factor for investors when choosing a warrant.
First runner up also bullish on HSI
Like Pee Hoh, first runner up seetkl also made his gain trading a short dated HSI call warrant HSI23800 MBeCW140429 (U1MW). Seetkl entered his position on the afternoon of 31 March when the underlying HSI April futures were trading at 22,040. The HSI moved sharply higher over the next few trading days on the back of positive economic data from China. The call warrant U1MW gained more than 144% over the next three days as the underlying HSI April futures advanced 3%.Second runner up gain from single stock warrant
Herman Lee came in third place in this fortnight’s Challenge. As an Indonesian national, Herman took a personal interest in Indonesian stocks listed in Singapore, particularly those in the agricultural sector. He felt that IndoFood Agri, a palm oil company, was trading “too cheap” and thus bought a call warrant over Indofood Agri, IndoAgriMBeCW140401 (T1PW) in March. Less than a month later, IndoAgri shares began a rally to trade above the $1 mark for the first time in 10 months after the company announced fourth quarter results which topped analysts’ expectations. In the last two weeks alone, Indofood Agri was 4.5% higher while call warrant T1PW gained 140% over the same period.
For someone who has never traded in real life, Herman was hoping to find a platform that will simulate trading and is glad he came across one with the Warrant Challenge. “The Warrant Challenge on TradeHero feels very real-life,” says Herman. Without any prior warrants trading experience, he also referred to the educational videos available on the TradeHero app to find out more about the instrument and how he could increase his virtual dollars.
Investors who are interested in finding out more about the trades executed by these top performers may follow them on Trade Hero. Macquarie Investor Academy provides useful in-depth information about warrants trading. Investors who are new to warrants may use these educational videos to get a better understanding about warrants trading.