Only the beginning or has it already gone too far? As far as Nvidia is concerned, positions on even higher prices predominate in certificate trading, as is the case with Apple. The situation is different for the DAX and Nasdaq.
7 June 2023. FRANKFURT (Börse Frankfurt). The sideways movement on the stock exchanges continues - despite resolution of the U.S. debt dispute previously weighing on the markets. Discount certificates therefore remain popular in trading, as they can be used to profit from a sideways movement. However, leveraged products on DAX & Co. and on individual stocks, this time especially tech stocks such as Nvidia, Amazon and Apple, are also in high demand. "The topic of artificial intelligence was strongly in focus," reports Simon Görich, certificate trader at Baader Bank. On some days, products on Nvidia were even top sellers, he said. Patrick Kesselhut from Société Générale can only confirm this: "On some days, Nvidia certificates were at the top in terms of turnover."
However, the most traded underlyings at Société Générale in the past four weeks were DAX, Dow Jones, Nasdaq, gold and the currency pair euro/US dollar, as Kesselhut reports. At ICF Bank, Nvidia still occupies the fourth place, only DAX, Nasdaq, Dow Jones were more popular as underlyings, as Markus Königer notes.
Bet on rising and falling DAX prices
In investment product trading, discount certificates on the DAX and Nasdaq are in particular demand, especially those with short maturities, according to Kesselhut. "Investors are uncertain about what will happen next." For example, a discount certificate on the DAX with a cap of 13,000 points and maturity until June (<DE000SF5BXB9>) and one on the Nasdaq with a cap of 10,500 points and maturity until December (<DE000SN4S966>) are doing well.
The DAX is also the dominant underlying for leveraged products. "Knock-outs (<DE000SV2ESP0>) are highly leveraged on rising prices, while call warrants are sometimes on rising prices (<DE000SH8EL05>), sometimes on falling prices (<DE000SH8VC96>)," notes Kesselhut. At ICF, bullish DAX positions predominate: High turnovers show, for example, knock-out calls (<DE000DW90949>). As far as Nasdaq certificates are concerned, however, there is a lot of betting on falling prices, for example with open-end knock-out puts (<DE000HG0RTT8>).
Nvidia: Main beneficiary of the AI boom
The most popular individual stocks at Société Générale are Deutsche Bank, ThyssenKrupp, Commerzbank and Amazon. At ICF, it's Nvidia, Apple, Tesla, Rheinmetall, Amazon, Infineon and Bayer. "In the field of artificial intelligence, everything from software providers such as Microsoft to hardware providers is traded up rather than down," explains Görich, citing a call warrant on Nvidia (DE000KH3BK76) as an example. At ICF, too, investors are primarily betting on even higher Nvidia prices, for example with call warrants (DE000HG9ED33). Kesselhut reports a high trading volume for call warrants (DE000SH79WS2), open-end knock-out calls (DE000SQ8LSC7), but also factor short warrants with leverage 2 (DE000SD5J1X6).
After the announcement of the quarterly figures two weeks ago, the Nvidia share price (US67066G1040) rose by 25 percent within one day, and has more than doubled since the beginning of the year. For a short time, the semiconductor company even broke the sound barrier of $1 trillion on the stock market. "Nvidia is not only the main beneficiary of the AI boom, the group had already benefited from the crypto boom," Königer notes. "In addition, the auto industry needs the powerful chips for automated driving."
Much confidence regarding Apple
Most investors also remain optimistic about Apple and are betting on even higher prices, as Königer reports, especially with call warrants (<DE000TT44T52>). "Apple has entered the computer glasses business. The model just presented is extremely expensive, but is very well received by experts."
Somewhat more conservative investors* picked up certificates on shares in the luxury sector, Görich reports, such as a discount certificate on LVMH (<DE000SQ8W2M9>). "That's probably along the lines of 'luxury always goes.'"
"Usual ground noise in gold certificates".
Business with certificates on gold and oil is inconspicuous. "With gold, it's the usual background noise," says Kesselhut. He sees brisk turnover in one silver certificate, namely the factor short warrant with leverage 10 (DE000SQ6E0D6). This tracks the inverse daily development of the silver price, leveraged by a factor of 10.
Investors at Société Générale usually bet on oil with open-end knock-out puts on Brent (<DE000SV5ASQ9>). The gold price is weaker after the rise to 2,059 U.S. dollars at the beginning of May, currently the troy ounce costs 1,963 U.S. dollars. The Brent price has been fluctuating around 75 U.S. dollars for several weeks, currently it is 76 U.S. dollars.
Crypto products: Trading in the doldrums
As far as crypto certificates are concerned, it is still quiet. Some turnover at ICF is at most in the tracker product on Der Aktionär Krypto TSI (CH1171791515) and in the tracker certificate on Börse Online Best of Krypto (CH1171793321) - both crypto baskets. "We hardly see certificates on individual currencies anymore," Königer notes. The most important cryptocurrency, bitcoin, had briefly risen above $30,000 in mid-April; it is currently at $26,790. The all-time high in November 2021 was almost 69,000 US dollars.
by: Anna-Maria Borse, 7 June 2023, © Deutsche Börse
Anna-Maria Borse is a finance and economics editor specializing in financial markets/stock markets and economic topics.
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