Certificate trading is dominated by the reporting season. But IPOs, takeover bids and the crypto comeback are also prompting investors to take action.
15. Febuary 2024. FRANKFURT (Börse Frankfurt). Although many share indices have reached new all-time highs, trading in leveraged products and investment certificates is largely focused on individual stocks. Markus Königer from ICF Bank can currently only find one DAX product among the 30 most frequently traded derivatives. "That is very rare," the trader states, especially as it is also a (very highly leveraged) short product (DE000HS0MTR9).
Technology stocks in the focus of bulls
The list of top leveraged products is dominated by call warrants on US technology stocks. According to the derivatives specialist, the AI euphoria and the published quarterly reports are arousing the interest of customers. Calls on Apple (DE000HG3S465), Amazon (DE000HG605S4), Alphabet (DE000HG80RX5), Microsoft (DE000TT9SFV3) and Nvidia (DE000HS1NYX3) are traded very frequently.
In certificate trading at Société Générale, Patrick Kesselhut also reports "an unusually high number of individual stocks among the top underlyings" in the Turbo segment. Two moderately leveraged Best Unlimited Turbo Puts on Schneider Electric shares (DE000SV835X5) and (DE000SU27FQ3) stand out. The share price of the French electrical engineering group had risen significantly in the run-up to the quarterly figures published today. Following a 40% rise in the share price since the end of October, there was increased speculation of a countermovement.
Short-term traders use the momentum
However, the DAX is also being diligently traded by short-term oriented clients. In HSBC's derivatives trading, Julius Weiß recognizes a rather pro-cyclical behaviour in knock-out products on the German benchmark index: "When prices go down, short products are often used to take advantage of the short-term momentum". Otherwise, the reporting season also arouses "lively interest in leverage products on the respective individual stocks". Overall, the derivatives specialist speaks of a "good upturn in business" in recent weeks.
In the investment certificate segment, special events such as the planned takeover of Morphosys by the Swiss pharmaceutical giant Novartis are playing a major role. After the biotech specialist's shares had already been "very actively traded", some investors have now taken profits, according to the HSBC expert. For example, in a call warrant (DE000HG2UAP6) that expires in June, which "ran into the money" at a strike price of 55 euros due to the jump in the share price and has therefore more than doubled in value in recent days.
Stock market newcomer gets off to a flying start
There was also strong demand for leveraged long products on the stock market newcomer Renk. The share got off to a brilliant start, quadrupling the price of an open-end turbo on the share (DE000HS4RWW4) issued shortly after the IPO. The HSBC specialist registered "dozens of trades every day" in this and other leverage products on the armored gear manufacturer.
Discounters on selected individual stocks are also in focus. "Many investors are aiming for an attractive sideways return with these products," explains Königer. A certificate on Airbus (DE000DJ7C982) issued by DZ Bank is "very often bought" by ICF Bank customers. With a cap of 140 euros, the security offers a risk buffer of around seven percent and a good nine percent profit opportunity until mid-December. An Nvidia discounter (DE000HS4S4H4) with a cap of 650 dollars (11% below the share price) and a profit opportunity of around 17% is "well traded" by HSBC.
Tracker certificate on CO² price now "bid only"
ICF Bank recorded the most trades in recent weeks in the Leonteq Securities tracker certificate on the DER AKTIONÄR crypto TSI basket (CH1171791515), which has doubled in value over the past five months. In Société Générale trading, the best-selling product was the now sold-out Unlimited Tracker Certificate on carbon dioxide (DE000CU3RPS9). As a result of the fall in the price of CO², its price has halved over the year. This automatically created leverage in the product, meaning that the classic one-to-one participation no longer exists.
For this reason, the certificate was initially set to 'bid only'. This means that the issuer is currently not releasing any further shares to the market. Sales of existing positions are still possible regardless of this. There is also a two-sided tradable alternative on carbon dioxide (DE000SH755G8), which works in a similar way to a factor certificate and therefore has no leverage effect.
By Thomas Koch, 15. Febuary 2024 © Deutsche Börse AG
Thomas Koch ist CEFA-Investmentanalyst, Investmentspezialist für strukturierte Produkte und geprüfter Zertifikateberater. Seit Anfang 2006 beschäftigt er sich als freier Journalist mit dem Geschehen an den Kapitalmärkten.
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