Daily options trading small tips

Ken Low wrote a column · Jan 15 15:21

Bloomberg source: MYEG warrant as of 14 Jan 2025

$MYEG (0138.MY)$ MYEG warrants were actively traded on BURSA yesterday. Based on the table, $MYEG-C7C (MAYBANK INVESTMENT BANK BHD) (01387C.MY)$ MYEG-C7Z (stock code: 01387Z) issued by MAYBANK (market maker) closed at 0.060 with volume 102.464 million changed hand. This was actively traded.

Structured warrants are exchanged-traded option issued by banks and market made by maker makers. These warrants are same as normal vanilla stock options. The main differences are cash settled if the options are in the money and they have ratio, rather than multiplier. It means when you trade warrants, you trade fractional option (=1/ratio); when you trade stock options, you trade on 1 contract (= x 100 options).

At expiration,

call warrant settlement price = max [ (underlying price - strike price), 0] / ratio

Put warrant settlement price = max [ (strike price - underlying price), 0] / ratio

The underlying price can be closing price, VWAP, average 5 days of closing price or average 5 days of VWAP, depending on market makers.

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Ken Low

Head of Dealing, Moomoo Malaysia

Experienced trader at bank, covering equity, FX, commodity & derivatives. Specialize in market making & flow trading.

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