Hi slash, the more I look into it the more these warrants seem to be effective as a vehicle for leverage rather than for insurance. They provide almost the same protection as a basic stop-loss order at a fixed trigger price - except that the trigger prices is set by citi, whereas with a stop-loss order I can name my trigger price. The one advantage the warrant has is in the case where the price gaps down past the stop-loss price, where the warrant effectively gets you out at the stop-loss price whereas you stop-loss order will either not execute or will sell you out at the opening price depending on how you set it. I never use stop-loss orders either.
I have looked at CFDs before but haven't gone to the trouble of setting them up on my SMSF. In the end, I think they also are best for leverage rather than insurance. I can't actually figure a way to use either product to give me better downside protection than simply reducing my holding of the base shares.
- Forums
- ASX - By Stock
- SRX
- Downside protection
Downside protection, page-6
-
- There are more pages in this discussion • 13 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)