Tuesday, May 24, 2011

A interesting DAX call

This Call would hit my strategy if the DAX would turn upwards again above 6800 points.
For entry points benith the 6800 in the worst case i would recomment a warrant with a lower break-even.
This one is between the most traded ones at the Euwax so no worries about the money-flow.
Just notice the loss yesterday of more than 9% while the underlaying itself lost only 2%-a leverage of 4.5 while the Omega is even 5.2!
In good times this warrant moves the same speed in the other direction and makes as displayed in the long term chart 50% jumps in a couple of weeks.This is in fact a quite defensive one because he is still "in the money"and a bit close to"at the money"(Never buy anything else),means in this case above his break-even at 6900.The tiny Spread of 1ct. is also a plus factor for this financial instrument.
The warrant is losing 1% per week(Theta)if the quote remains unchanged and the same while he's moving.Never keep warrants for that matter to long because of the loss of time value,which is even incresing as closer the warrant comes to his expirering.

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