Friday, June 22, 2007

CWs for HK shares

Recently, there was a spate of CWs issued for foreign underlying shares, traded on the HKEx and SGX. I have posted on the issuance of these CWs as well as highlighting the potential of 2 such CWs, i.e. HKEX-C1 & CHMOBIL-C3. To help in your short-term investment or trading, I have prepared a table valuing all the CWs for underlying stocks traded on HKEx, except the zero-strike CWs. From this table, you can see why HKEX-C1 & CHMOBIL-C3 are doing so well lately. One other CW that may do well soon maybe HSBC-C1.

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2 comments:

  1. myfivesenMonday, June 25, 2007 9:29:00 AM

    Hi Alex,

    I was wondering how to trade these tracking instruments? Whenever there is an arbitrage/mispricing between the underlying and the tracker (due to market inefficiency)? This is also assuming there is volume in the market to support these instruments.

    Thanks,

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  2. Alex LuMonday, June 25, 2007 8:21:00 PM

    I have a client who has a fairly good system of trading these CWs. He will track the underlying share price closely & if the CW price movement lags behind that of the underlying share (after the latter has made a significant move), he will buy into the CW. So far, he has done quite well.

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