Discount Certificates

[ichew]

some points from tat seminar

- it is like a short put option
- it is the listed version of ELN (equity linked notes)
- i think it wont pick up unless they increase the premium
- market-maker is barclays. selling thru retail banks. this round is thru std chartered
- min amt = $50k.
- Shares delivered will be held by SCB custodian. Need to sell thru them or pay CDP txf fee $30.
- only Genting SP available (for a start)
- eg
on book building day, Genting trading $2.26
Strike will be set $2.147
price set at $2.112
no brokerage buy/sell charges if buy via book-building & held to maturity

my take:
- cannot do unless they have more stocks, & premiums r higher
- can look into ELN instead as it is more customisable but min amt is $200k.

[kennynah]

thanks for the update ichew..

what is the premium for that Short Put strike $2.147 and what is that Option period? 1 month, 60 days? is it eurporean or american style option?

Thanks for the info...

[ichew]

thanks for the update ichew..

what is the premium for that Short Put strike $2.147 and what is that Option period? 1 month, 60 days? is it eurporean or american style option?

Thanks for the info...

shld be 30 days
european-style. u can buy/sell in the mkt thru ur fav broker as it will be listed.
premium = 2.147 - 2.112 = $0.035

* disclaimer => figures were given to me on the spot. actual pricing etc may differ. but i tink shld be around there la.

[kennynah]

i think....buy toto better

[ichew]

i think....buy toto better

haha
4D la ... tink toto harder to win?

i doubt any retail will bite
so prob left to the bank's priviledged banking customers
but i sometimes wonder how "priviledged" are they if their bankers r to push such pdts to them

as my fren pointed out, the bank will hedge this pdt by buying in the mkt at the start
if stk chiong, bank gives u 1% and pocket the profits
if stk tanks, bank gives u the stk and so no risk to balance sheet