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| Copyright 2002.
Information below are provided by SG Securities (HK)
Limited. All Rights Reserved. |  |
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| Leverage
Play into Hang Seng Index |
Warrants on the Hang Seng
Index are flexible instruments which give the
investor the ability to take a bullish or bearish
view on the market as a whole. They are also ideal
vehicles for aggressive players of the Hang Seng
Index since they offer a high degree of gearing.
On 19 May 2000, the Hang Seng Index closes
at 14,478. An investor has a bullish view on the
index over the short term. Instead of buying the
HSI futures on margin, the investor could buy call
warrant 9904.HK on the HSI. |
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| Buy the Call Warrant on
HSI and Sell 3 weeks later |
| On 19 May 2000, while the
HSI closed at 14,478, the call warrant 9904.HK
closed at HKD 0.117. If the investor bought
100,000 warrants, the cash required would be HKD
11,700.00 (100,000 warrants x HKD 0.117). On 8 Jun
2000, the HSI rose 9.7% to close at 15,876. The
call warrant on the same day closed at HKD 0.172
rising 47% from the original purchase
price. |
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| Buy the HSI Call
Warrant and Hold until maturity |
| Example: |
| Call warrants on Hang
Seng Index |
| (stock code:
9904.HK) |
| Terms and conditions
as of launch date (16 Mar 2000): |
Maturity
date
| 28 Sept 2000 |
Type
| European-style call warrants |
Underlying
| Hang Seng Index |
| Strike price | 14,800 |
| Converting ratio | 12,000 warrants for 1 index unit
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If however the investor decided to
hold the call warrants to maturity then the
potential profit and loss would be like diagram 4.
The break-even point for the call warrant would be
at 16,204 HSI level (HKD 0.117 x 12,000 + strike
price of 14,800). In other words, the Hang Seng
Index must rise above this level before the
position on the warrant makes money at the
maturity date.
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| Information and services in this
section are offered only to Hong Kong residents. For the full
terms and conditions, please click
here
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| The above hyperlinks may take you to websites published or operated by third parties not affiliated with Hang Seng Bank Limited ("the Bank"). The third party websites accessed through these hyperlinks may not provide you with any regulatory protections. The Bank is not liable for your use of the hyperlinked websites. |
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Information (the "information") which is "Powered By" BNP Paribas Hong Kong Branch, Credit Suisse (Hong Kong) Limited, ET Net Limited, Macquarie Capital Securities Limited, SG Securities (HK) Limited, The Hongkong and Shanghai Banking Corporation Limited and UBS AG London Branch re-transmitted by the Bank in the ordinary course of business to you for general information and reference purpose only. The Bank, its officers, employees and agents did not devise, select, add to, modify or otherwise exercise control over the Information, do not take responsibility for the Information nor do they endorse the accuracy of it.
The prices of securities fluctuate, sometimes dramatically. The price of a security may move up or down,
and may become valueless. It is as likely that losses will be incurred rather than profit made as a result of buying
and selling securities.
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Disclaimer |
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