Trading in leveraged products and investment certificates on the Frankfurt Stock Exchange picked up significantly at the turn of the year. In addition to the major share indices, the focus was on volatility indices, exciting individual shares and cryptocurrencies.
11 January 2024. FRANKFURT (Börse Frankfurt). "There was increased volume, partly because many investors rolled or restructured their positions," reports Simon Görich from Baader Bank. According to the trader, one of the most traded products in recent days was, for example, a ten times leveraged factor long certificate on the DAX (DE000KE2FFU3) from Citigroup. The security almost quadrupled in value during the bull market phase from the end of October to mid-December and, after a temporary correction, has been on an upward trend again since the beginning of the year.
DAX bears in the majority
In certificate trading at Société Générale, a product on the DAX is also at the top of the turnover list for factor certificates, according to Patrick Kesselhut. This even profits from rising index prices with leverage of 14 (DE000SN3JEK8). Otherwise, however, securities with which customers speculate on falling prices of the price barometer dominate. For example, a factor short certificate with a leverage of 12 (DE000SV7RR22) or a Best Unlimited Turbo Put warrant (DE000SV6MNQ3), which currently has a good triple leverage.
The certificate expert also sees further surprises among the most traded leverage products. For example, many investors have recently bet on an increase in the US volatility index VIX. Two factor certificates with a leverage of 2 each (DE000SV9LUM3 and DE000SU16JX4) were used for this purpose. "That is quite unusual," explains Kesselhut. However, the speculation has not paid off so far. Such indices usually rise when there are major setbacks on the stock markets. These have so far failed to materialize in the USA.
Kesselhut
Car manufacturers, tech companies and an ailing aircraft manufacturer
Turnover in leverage products on individual stocks at Société Générale is currently dominated by BMW and Meta. The majority of speculation is on rising prices for the car manufacturer (DE000SQ1CHG5) and falling prices for the Facebook parent company (DE000SU0N016). Markus Königer from ICF Bank, on the other hand, reports "strong interest in Apple calls". He sees high turnover, for example, in a call issued by HSBC with a slightly out-of-the-money strike price of 200 US dollars and a term until December 2025 (DE000HS2R0Y0).
At HSBC itself, Julius Weiß sees increased interest in securities on the US aircraft manufacturer Boeing at the start of the year alongside the usual favorites from the tech sector (especially Amazon, Apple and Nvidia). Boeing recently hit the headlines again following the emergency landing of one of its planes. "As soon as there is news, leveraged products are immediately sought," reports the certificate specialist. In the case of Boeing, more puts are currently being bought, in particular a 15-fold leveraged open-end turbo (DE000HS432K6) on the share. During the current earnings season, Weiß expects even more momentum in the corresponding individual stocks. "The wide range of leverage products - whether long or short - always offers opportunities to react".
Crypto assets in demand ahead of SEC decision
In the investment certificate segment, HBSC is increasingly buying products "as a substitute for interest". Particularly popular here are comparatively defensive discount certificates on the major share indices. Such as a discount certificate on the Euro Stoxx 50 (DE000HG7NUE2), which combines a risk buffer of around 24% with a yield opportunity of up to 4.7% p.a. thanks to a cap of 3,400 points until December 2024. In addition, reverse capped bonus certificates on the DAX are also currently being traded relatively frequently. "Here, customers benefit from sideways movements or price declines in the index," says the HSBC expert, referring for example to a certificate that runs until June with a barrier of 19,000 DAX points (DE000HG9TBK2).
Certificates that track the price movements of crypto assets have also been traded frequently in recent weeks. Two crypto basket trackers from Leonteq (CH1171791515 and CH1171793321) were particularly popular in ICF Bank's certificate trading. "There was very strong buying here," explains Königer, who points to the fact that the Bitcoin spot ETFs have now been approved by the US supervisory authority SEV. The conspicuously high transactions in a tracker certificate on the cryptocurrency Solana (CH0596616612) also fit in with this.
by Thomas Koch, 11 January 2024 © Deutsche Börse AG
Thomas Koch is a CEFA investment analyst, investment specialist for structured products and certified certificate advisor. Since the beginning of 2006, he has been covering events on the capital markets as a freelance journalist.
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