Wave warrants

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debono

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Post Number: 6
Registered: 01-2004

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Sunday, January 18, 2004 - 02:20 pm:

Hi everyone,

I am just starting to look at these for the first time and am curious as to whether any others have done any investigation.
At first glance they appear to offer a better alternative than normal trading warrants.Below is quoted from dbwarrants
in regards to cfd's comparrison. I have not viewed the daily movements yet as I have just started the exercise of research this weekend. The biggest risk appears to be loss of your capital if something unexpected happens such as a major tank like AMP. However you can only lose your outlay.
The 1 for 1 delta appears attractive?}}

http://www.dbwarrants.com/index_aus_frame.html?/maincontent/sc21_waves/content_w aves.html&maincontent

CFD's, as they are more commonly referred to, are an agreement between two parties, the investor and the CFD provider (usually a broker), that at the close of the contract they will settle the difference between the opening price of a contract and the closing price.

Instead of physically buying and holding a particular share, the CFD holder gets indirect access to its price movements. CFDs are 'margin trades'- you pay a margin or deposit of around 10 per cent of the contract value.

WAVEs™ differ from CFDs in several ways.

WAVEs™ are listed and trade on the ASX, unlike CFD's. Therefore, WAVEs™ are easy to trade on the ASX through a broker, just like shares.
WAVEs™, when purchased through the ASX, have no minimum investment amount.
WAVEs™ can be exercised on expiry and be converted into shares if the investor pays the agreed strike price.
With CFD's, the broker continues to have full recourse to the investor as the counterparty to the trade, whereas with WAVEs™, Deutsche Bank has no further recourse to the investor for the remainder of the share price. Therefore investors risk losing a greater amount than their initial investment if the share price was to fall rapidly with CFD's, because an investment in CFDs requires the investor to continue paying additional cash (margins) as the share or index moves against them.

With WAVEs™, you place at risk only the amount of premium that you pay up front. If the share price falls by this amount or more, then the WAVEs™ will 'knock-out' as the barrier will be triggered Therefore, should the market run contrary to your expectations, the built-in knock-out function of WAVEs™ will protect investors from additional losses.

cheers

debono

cheers

debono

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