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Your One-Stop Warrants Resource |
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Trading 101: Going Back to Basics |  | TK Yap, CFA, Executive Director, OCBC Securities
Trading in structured warrants has surged to a monthly turnover of about $1.5 billion from almost nothing in mid-2004 and currently accounts for nearly 8 percent of SGX turnover and over 30 percent of SGX volumes. Veteran stockbroker, TK Yap, CFA, who is also the Executive Director at OCBC Securities overseeing its Alternative Products business, offers some words of wisdom for those looking to trade in structured warrants. He shared his views with Vasu Menon, a member of the Pulses Advisory Board.
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How demand and supply of the underlying affects the warrant price |  | Sandra Lee, Vice President, Deutsche Bank
The demand and supply of warrants should not typically have a material impact on the warrant price. The theoretical warrant price is based on the widely used Black and Scholes option pricing model and deviation from the theoretical price should lead to increase demand (with market maker or investors buying the warrants) or supply (by the issuance of additional warrants or market maker and warrant holders selling their warrants) which should bring the warrant price back to its theoretical level.
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