All about Bursa Malaysia Structured Warrants by Isabelle Zhen and Jason Wong at ShareInvestor Malaysia
Today Shareinvestor Malaysia organized a talk on Malaysia structured warrants at Bursa Malaysia. 2 speakers were invited, Isabelle Zhen and Jason Wong. Isabelle Zhen is a VP at Kenanga Investment while Jason Wong is a full time trader. The talk was held at Bursa Malaysia building. This free seminar was also used to promote Bursa Malaysia's trading software Bursa Station.
The 1st half of the day was done be Isabelle Zhen. She is currently employed at Kenanga Investment Bank and used to be a PDT (Proprietary Day Trader). A PDT is basically a trader employed by banks to invest bank's excess funds.
Links related to the talk
Isabelle introduced 2 free tools which Kenanga is offering, ESTI and Live Matrix on its website nagawarrants.
ESTI is basically a warrant scanner. This tool can be used by traders to filter out warrants based on specific criterias.
ESTI stands for :
E -High Effective Gearing
S - Few Ticks Sensitivity
T - Sufficient time to maturity
I - Trustworthy Issuer
Live Matrix is a position entering and exit decision making tool. It is used for placing orders and setting stop losses. One unique characteristic of Kenanga's Live Matrix is the traffic light system on the Live Matrix which indicates whether the warrant is safe to trade or not.
Some facts Isabella gave was the volume of structured warrants have overtaken the ACE market. People are focusing on quality stocks using structured warrants as a leverage to enter at a lower price into a stock.
Isabelle mentioned that structured warrants have a stamp duty exemption making it quite an attractive trading instrument.
 |
| Live Matrix |
- Warrants are short term instruments, they are not family heirloom
- Warrants is like a double edge sword, losses and profits are magnified
Overall Isabelle's talk was informative but a little bit hard to understand for simple share traders like me. It probably can't be help due to the complexity of warrants. The talk was quite interesting as Isabelle articulates herself very well and has a sense of humor.
I also realize Isabelle's talks can be found at Youtube on Kenanga's channel, the content is quite the same so it's good to revisit it a few times to really understand about structured warrants.
After the 1st talk, there was a short break for food. Noodles and Ayam masak merah was served together with tea and coffee.
The 2nd half of the day was done by Jason Wong, the speaker introduced Jason as a trader who uses Elliot Wave patterns for trading. His talk was focus on sharing his trading strategies. Jason first spoke about that trading is real work, not a place to play. The message he tried to send out was a trader needs to have commitment and seriousness in trading.
Generally Jason's talk was more towards basic trader mindset and trading as a profession. He mentioned that traders need not have ego, have to admit mistakes and move ahead.
Jason went on to explain about a general top trader's path. From incompetence to competence. His story also similar to many professional traders, lost a lot of money 1st before realizing did not focus on methodology. I think he didn't mention that most traders don't even reach the eureka moment phase.
Jason went on about basic trading strategy explaining about the need to have a statistical edge in trading. Only trade stuff that will profit 2x and set stop loss at 1x where x is the multiplier.
Jason also explained how on his favourite trading patterns - Breakout method
Then Jason talked about the characteristics of a good trading plan.
Overall Jason's talk was quite basic and more geared for beginners. I get a sense he's quite a discipline and defensive trader based on the way his talk was presented. He has got a telegram stock sharing group it should be @KLSETA.
Links related to the talk
Disclaimer: I do not trade warrants as I'm not familiar with them, there seems to be too many variables (gearing, strike price, sensitivity etc) to consider in trading a warrant. I am currently doing some research on warrants and do intend to try to trade them, hopefully I will get better and will start this new journey of trading warrants.
Note :
I did some research and found that these structured warrants are typically issued at very high premiums to the mother share, means that generally the warrants will end up out of money and the issuer pockets the amount that was raised during the launch. Traders will only profit from the difference between the buy and sell prices in between. Understanding issuer (warrant) 's motivation is also key to understanding structured warrants, it is also a money making instrument for issuers.
Structured warrant issuers like Kenanga and Macquarie are currently providing a lot of education (online, seminars) and scanning tools (live matrix) for traders to make better decisions is meant to help traders profit from the volitility between the launch of the structured warrant and expiry of the structured warrant. Warrant issuers then profit from the monies received from lanching the structured warrant upon the warrant expiry. It is highly unlikely the warrant will expire in the money and the warrant issuers (Kenanga and Macquarie) have to pay back the traders.
Note :
I did some research and found that these structured warrants are typically issued at very high premiums to the mother share, means that generally the warrants will end up out of money and the issuer pockets the amount that was raised during the launch. Traders will only profit from the difference between the buy and sell prices in between. Understanding issuer (warrant) 's motivation is also key to understanding structured warrants, it is also a money making instrument for issuers.
Structured warrant issuers like Kenanga and Macquarie are currently providing a lot of education (online, seminars) and scanning tools (live matrix) for traders to make better decisions is meant to help traders profit from the volitility between the launch of the structured warrant and expiry of the structured warrant. Warrant issuers then profit from the monies received from lanching the structured warrant upon the warrant expiry. It is highly unlikely the warrant will expire in the money and the warrant issuers (Kenanga and Macquarie) have to pay back the traders.