Feeling Bearish? Try FBMKLCI Puts

As at 12:00pm, FBMKLCI was trading at 1598. This means that it is barely hanging onto the psychological 1600 level.If this support is violated, then FBMKLCI may decline to the next support at 1550-1560.


Chart 1: FBMKLCI's daily chart as at Sep 29, 2015_12.00am (Source: ShareInvestor.com)

Despite crawling back some lost ground yesterday, MYR is again weakening. It traded at 4.443 against USD or 3.115 against SGD. If the MYR were to weaken any further, the floodgate will open.

 
Chart 2: USD-MYR & SGD-MYR's daily chart as at Sep 29, 2015_11.00am (Source: XE.com)

In the face of these negative outlook, some may consider buying insurance to protect their portfolio. This insurance comes in the form of put option (or we call them put warrants). If the market drops, your stock portfolio would lose value but the put warrant will rise to reduce the loss. Below is the list of FBMKLCI put warrants for your consideration.

You should aim to buy put warrants with lower premium & longer expiry dates. I have highlighted in bold 4 put warrants that are not too exorbitantly priced. They are FBMKLCI-H1, FBMKLCI-H19, FBMKLCI-H3 and FBMKLCI-HK.


Table: FBMKLCI Put Warrants' Valuation as at Sept 29, 2015 (10.15am)

Just a word of caution for traders. Put warrants - like every other structured warrant - are leveraged instruments. They magnified your gains as well as your losses. Use them carefully! Good luck! 

Note: 
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, any of the above-mentioned instruments.