The correction on the stock markets that began at Easter has made investors more cautious. In trading with leverage products, speculation on falling prices has increased recently. In the case of investment certificates, products with risk buffers were in demand.
25. April 2024. FRANKFURT (Börse Frankfurt). At the start of the reporting season, the typical dominance of the major share indices in the ranking of the most popular underlyings has been broken. “Interest is clearly moving towards individual stocks,” explains Patrick Kesselhut from Société Générale. Customers are speculating on rising prices, particularly for Nvidia (DE000SN84GJ2 and DE000SB01V92) and Rheinmetall (DE000SH3N4C1) with highly leveraged factor long certificates. The certificate specialist describes the fact that Rheinmetall is a German company in the top 5 underlyings as a “novelty”.
Price setbacks and new figures set the pace
In HSBC's certificate trading, Julius Weiß also recognizes continued strong demand for long products for Nvidia. Open-end turbos with high leverage (for example DE000HS4ZUG4) are particularly popular, which indicates very active and short-term traders. Leveraged products on ASML, SAP and Tesla were also heavily traded. “After the presentation of quarterly figures, there is always something going on with the corresponding shares,” the HSBC expert adds by way of explanation. There was great interest around the Bitcoin halving in a call warrant on Coinbase (DE000HS3PSZ1).
With regard to the stock indices, Kesselhut sees the “bears on the advance” in terms of trading activity. More Unlimited Turbo Puts were ordered for both the DAX (DE000SV6LEY8) and the Nasdaq 100 (DE000SU7A125). Markus Königer from ICF Bank confirms this trend: “The DAX was traded more on the short side”. The top five DAX securities traded include four securities that profit from falling prices. In addition to classic turbo short products (e.g. DE000DQ2C5M4), there is also a reverse capped bonus certificate on the DAX (DE000HS5V9V8). This offers a profit of around 19 percent if the index never reaches the 21,000 point mark by shortly before Christmas 2024.
Fast profits with capped bonus certificates
In the investment certificate segment, investors are focusing on products with an attractive sideways yield. In the case of Société Générale, capped bonus certificates with a very short term of only around two months are preferred. ThyssenKrupp combines a risk buffer of around 10 percent with a return opportunity of 5.9 percent (DE000SU9MUX9), while SMA Solar offers a 34 percent buffer with a 6.7 percent return opportunity (DE000SU1CZH9). However, this share is also trading at a high premium of 31%, which means that disproportionately high losses will be incurred if the barrier (EUR 32) is breached.
HSBC's clientele tends to favor products with somewhat longer maturities. A capped bonus certificate on Siemens Energy with a 36 percent buffer and 19 percent profit opportunity until June 2025 (DE000HS4UGN0) and a reverse convertible on Rheinmetall with a coupon of 11.75 percent and a strike price that is a good 13 percent below the share price are being heavily traded. This bond, which is quoted slightly below par, can generate a return of more than 12% until April 2025 if the shares of the defense technology group end up above the strike price (450 euros) (DE000HS5YKP6).
Crypto baskets remain in high demand
The crypto sector continues to be played at ICF Bank. The two most traded certificates are still the trackers issued by Leonteq on two crypto baskets. The tracker product on Der Aktionär Krypto TSI (CH1171791515) more than doubled in just a few months from the fall, but corrected by a good 20 percent in the first half of April. The tracker certificate on Börse Online Best of Krypto (CH1171793321), which had performed even better during the upswing, is in a similar situation. Königer also sees brisk trading in a discount certificate on Infineon, which, with a cap of 30 euros (three percent below the share price), enables a good 12 percent profit by the end of 2024 (DE000DW8PD11).
From Thomas Koch, 25 April 2024 © Deutsche Börse AG
Thomas Koch is a CEFA investment analyst, investment specialist for structured products and a certified certificate consultant. He has been a freelance journalist covering events on the capital markets since the beginning of 2006.
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